Yahoo News - July 17, 2009The South's First Double Bottom Line Private
Equity Real Estate Fund Launched in
Shreveport, Louisiana
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URL: http://finance.yahoo.com/
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SHREVEPORT, LA - Northwest Louisiana Community Development Fund I ("the Fund") -- the first double bottom line private equity real estate fund in the Southern US, and the first in the nation created to serve a small, regional market -- today announced that it will make its inaugural investment in Louisiana's first mixed-use, mixed-income "smart growth" development project in a low income neighborhood.
The $40 million Fund is focused on real estate projects in the 10 parish region of Northwest Louisiana. Its mission is to achieve double bottom line goals in terms of market-rate financial returns for investors (first bottom line) and measurable jobs, income, wealth and community revitalization for residents of low income neighborhoods (second bottom line). The Fund's initial investment is in Riverscape Parkway -- Northwest Louisiana's first-of-its-kind mixed-use, mixedincome development.
The Fund was structured, developed and assisted in its capitalization by Los Angeles-based Strategic Development Solutions (SDS) and Boston-based Economic Innovation International. Oakland, California-based Sustainable Systems, Inc. spearheaded development of the local community and business stakeholder effort behind the Fund and the Riverscape project. These three national firms were joined for today's announcement by the Fund Sponsor -- Northwest Louisiana Strategic Action Council ("the SAC") and the Fund Manager -- Kennedy Wilson.
The process leading up to today's announced investment began in 2003, when Economic Innovation International was retained by seven leading business and civic organizations in Northwest Louisiana to undertake a comprehensive review of the region's capacity to compete in the global, technology-based economy. From that review came a recommendation to create the Northwest Louisiana Strategic Action Council (SAC), comprised of business leaders and civic organizations committed to ensuring the region's economic competitiveness and integration of its low income neighborhoods into a healthy regional economy.
The SAC then employed Economic Innovation International and Strategic Development Solutions to design the fund, assist in selecting a fund manager and build the $40 million capitalization. Sustainable Systems was employed to help guide the SAC's efforts and identify projects such as Riverscape Parkway that are consistent with the Fund's double bottom line goals. All three national firms continue to play a central role in capitalizing the Fund, organizing the local investor group and building the Fund's double bottom line deal pipeline. In addition, JPMorgan Chase Bank and TIAA-CREF have each committed up to $10 million as the lead investors, and have been joined by such leading national foundations as W.K. Kellogg and F. B. Heron.
As the Fund's inaugural investment, the RiverScape Parkway project is structured as a unique joint venture between the Fund and a separate venture comprised of a leading local real estate developer -- Vintage Realty Company -- and a major African-American faith-based community development corporation -- non-profit Trinity One Corp., which is affiliated with Tabernacle Baptist Church.
The 50-acre Riverscape project is characteristic of the "smart growth," new urbanism-style projects prevalent on the East and West Coasts, but uncommon in the South. It will be built in phases, which may include development of an additional 30 acres. Plans call for a town center with mixed retail and commercial uses; walkable neighborhoods with multi-family rental and for-sale units; single family affordable and market-rate homes; and pocket parks and green spaces.
"When it comes to such investments, there is no second bottom line without a strong first bottom line," said Deborah La Franchi, president and CEO of Strategic Development Solutions. "We interviewed dozens of the very best private equity real estate funds from across the country in order to find a partner for this watershed project. From those most qualified, Kennedy Wilson was chosen by the SAC based on its demonstrated capacity to work well with community groups and to deliver on both bottom lines."
Belden Daniles, CEO of Economic Innovation International, commented, "All of the capital behind the Riverscape Parkway project was committed after the national economy entered the current deep recession. Major national investors came on board because the uniquely diverse Local Investor Group committed first. The large investors found the Fund's commitment to the financial bottom line, as well as to the community's economic development, very compelling."
The Local Investor Group (LIG) is comprised of a diverse group of investors that include Red River Bank, Beaird Properties, Galilee Baptist Church, First Baptist Church of Shreveport, Praise Temple Full Gospel Baptist Cathedral, the Community Foundation of Shreveport-Bossier, Centenary College and several prominent families. Along with Kennedy Wilson, these investors have contributed more than $15 million for the Fund, which will continue to hold subsequent closings for the rest of the year until it reaches its target of $40 million.
"Without this local commitment, the national investors would never have believed in the soundness of such an undertaking in this small Louisiana market," added Daniels. Joseph Gross, CEO of Sustainable Systems, commented, "Riverscape provides a model for similar projects nationwide because it demonstrates how a top-of-the-line developer like Vintage can form an effective partnership with a faith-based community development corporation such as Trinity One of Tabernacle Baptist Church. The key is their mutual commitment to mixed-income, mixed-use, mixed-race, smart growth development that employs qualified minority contractors and developers."
Double bottom line private equity real estate funds employ an investment strategy built on "Profits and People." These innovative funds, which supply equity capital to real estate developers, are intended to do "well" and do "good." Strategic Development Solutions and Economic Innovation International have built more than $2 billion in such funds. With their leadership, the double and triple bottom line private equity fund industry has grown to more than $20 billion in managed capital over the last decade.
For more information about Northwest Louisiana Community Development Fund I ("the Fund"),
please visit http://www.kennedywilson.com/investments.php?id=34.
More information about the firms that helped structure, develop and capitalize the Fund is available
at:
-- Strategic Development Solutions -- http://www.SDSGroup.com
-- Economic Innovation International -- http://www.economic-innovation.com
-- Sustainable Systems, Inc. -- http://www.economic-innovation.com