MCCF
Impact Investing – READI 2.0
I attended the introductory meeting on READI 2.0 presented by South Bend – Elkhart Regional Partnership (SEBERP) at the Rees Theater yesterday. Honestly, attendance was pretty poor, but there was some good information. READI 2.0 is a refined repeat of the original READI (1.0) program which was a refined repeat of the Regional Cities Initiative. In various forms, these programs have been designed to incentivize municipal and private investment in statewide goals. As with the past programs, READI 2.0 offers the carrot of up to 20% project investment matched by 20% local government investment and 60% private investment. Whether the entire 20% is granted depends on the quality of the project, its merit for meeting goals and its ranking among other submissions.
Sand Hill Farm Apartments was awarded Regional Cities Initiative (RCI) dollars. Those funds, though only 7% of the project cost, provided some incentive to move the project forward when Culver‘s first Stellar application was unsuccessful. The project was initially to be the LIHTC portion of Culver’s Stellar application. When that wasn’t successful, the RCI funds helped make the project viable as market rate housing. Moving this project forward has been noted as instrumental in Culver’s success with their second Stellar application. Unfortunately, Culver did not follow through on their commitment, so some of those funds never were disbursed by RCI and those that were got redirected to reimbursements in lieu of benefiting the project.
Culver Sand Hill Farm was awarded READI 1.0 dollars for Water Street Townhomes. This is a mixed use building with 11 two-bedroom townhouses, 2 one-bedroom apartments and a corner commercial space. We are still working with the City of Plymouth to create the structure to put those dollars to work. SEBERP awarded less than the initial request, but Plymouth is following through with their entire match in order to make this project possible.
Culver Sand Hill Farm also submitted a townhouse project for Culver, Spirit Townhomes, which was named in the READI 1.0 Strategic Investment Plan. Unfortunately, after the fact, Culver chose to partner with a different developer on the much larger and more controversial project, The Dunes. (Discussed here.) C’est la vie! Sometimes you reap what you sow.
SBERP will be putting in an application for READI 2.0 funds for our region after the first of the year. Yesterday’s meeting was one of several where they are soliciting input on what goals of the SEBERP region fit within the stated READI 2.0 goals. This will help them refine their application. They feel confident that their track record managing the Regional Cities Initiative and READI 1.0 funds put them in a good position to receive the maximum award from READI 2.0. The handout to the right was provided at the meeting, showing some of the impact these investments have had. $878 Million in project investment through those two programs, which is 9.5 times the investment from the State. (See the backside of the flyer here.)
There is a rural component to READI 2.0, directing that 25% should go to rural areas. Of the three counties in SBERP (St. Joseph, Elkhart and Marshall), only Marshall County is designated at rural. That doesn’t mean that Marshall County doesn’t have to have competitive projects, but it gives a 25% set-aside leg up. L:ast time, READI 1.0 projects were rewarded on population, which put Marshall County at a disadvantage.
One of the interesting changes in the program is the option for receiving a loan in lieu of a grant from the program. The funds could be loaned out at a reduced interest rate, with the funds paid back to SBERP for future reinvestment in the region. While the concept is a good one, the implementation appears to be flawed, from my perspective. As it currently stands, the loan would be capped at the same 20% level as the grants. While both a grant and a loan could be awarded, they cannot total more than 20% of the project. I will need to hear more about this, but my initial impression is that there is not much incentive to take the loan in lieu of the grant, but I may be missing nuances here. It would make some sense to see loan amounts allowed to be larger percentages since the money will be recirculated. Then there would be more incentive to take that option.
An interesting sidebar – not only did I sit with Linda Yoder, Executive Director of the Marshall County Community Foundation (MCCF), at the READI 2.0 meeting, I also followed that up with an MCCF meeting at her office to hear from MCCF’s financial advisor on impact investing options for the newly formed Roger Umbaugh Local Impact Investing fund. (More on this in a future post.)
Impact Investing seems to be a great way to influence desired outcomes. Great projects that are good for the community often flounder because the investor ROI isn’t there. If Impact Investing can influence that through grants, loans and other creative means, then it benefits everyone.
I don’t yet know if or how Easterday Construction Co., Inc. (ECC) or Culver Sand Hill Farm LLC (SHF) will participate in READI 2.0. The experience with READI 1.0 hasn’t been bad, but there have been a lot of strings attached to it after the award that weren’t factored into the original project. I’ve been approached about several projects that would fit under the READI 2.0 umbrella. I’ll continue to monitor this and continue to be part of the discussion. Whether ECC or SHF participate or not, it seems that it’s another great opportunity for Marshall County and Marshall County communities.
The Roger Umbaugh Impact Investing Fund
A little history…
I’ve talked about my friend, Roger Umbaugh, a couple of times here. Roger was a past board member of on the Marshall County Community Foundation (MCCF). While on that board, he was also on the MCCF Investment Committee. When I joined the MCCF board, I also joined the MCCF Investment Committee.
One of Roger’s goals was to get MCCF into a better home. While the generosity of Key Bank was always appreciated, it was not always the best solution. On top of that, the Community Foundation had grown and needed more space than was available at Key Bank. When financing for the community pool project was under discussion, Roger found a way to finance it using New Market Tax Credits and to put MCCF in a position to facilitate this while also getting a new home as part of the deal.
Another of Roger’s goals was to see some of MCCF’s investment funds invested back into the community. He always thought it would serve two purposes… providing some income and doing good in the community. At the start, he didn’t know that there was a name for this: Impact Investing.
When the New Market Tax Credit project needed additional funding, Roger broached the subject of MCCF providing the funding gap as a loan. This resulted in $500k of Community Foundation funds be loaned to the project. This was a win-win for MCCF and project.
After Roger’s passing, I wanted to carry this forward for him. In his name, I championed designating the $500k as the start of an Impact Investing Fund. I also suggested that the fund be named the Roger Umbaugh Impact Investing Fund. The board voted to approve both measures. I have the feeling that this will be a draw to a different kind of donor for the Community Foundation. Another win-win.
This is still new. I have sat in on a seminar on Impact Investing. I have done a little research. There appears to be a lot of different ways we could approach this. At the last MCCF board meeting, I suggested that we should start this process by setting some goals which we’ll be doing in a future meeting. This seems to range from self-run scenarios to hands-off options where 95% of the heavy lifting is done using outside financial institutions.
So… I’m throwing this out here to see if there is any input from followers. This is your chance to add suggestions on how this new venture should be structured. Any ideas? Contact me by email (mail@easterdayconstruction.com) or feel free to use the comments.
Roger Umbaugh
Easterday Construction lost another good friend last week. Roger Umbaugh passed away Thursday evening, August 5th. (Obituary here.) We completed several projects for Roger at his home on 12th Road, including a re-siding project with Mary Ellen Rudisell. That was one of those projects that could have become contentious as it seemed that every day we would find a new underlying problem that we couldn’t foresee. The home was a RT house that Roger’s father had constructed and that designer/builder had a reputation that his homes were guaranteed to leak. It was a cool home though! Roger and Carol took the odd construction discoveries and issues in stride.
Personally, I really became friends with Roger when we were tapped to start the Marshall County Economic Development Corporation (MCEDC) in 2007. Roger was asked to do this by Kevin Overmyer as a representative of Marshall County. I represented the town of Culver. At first meeting of the group, Roger forgot to invite me! He followed up, apologized, and we went out to dinner with our wives, Carol & Becky, so he could bring me up to speed. That went so well and we all got along so well, that it became a regular thing. We rarely went more than a month without a night out together and one year we vacationed with them at their cabin in Pagosa Springs, CO.
Roger and I shared a sense of pragmatism and impatience that fortunately wasn’t turned against each other too often. (No relationship is perfect, ha!) We both were officers for MCEDC nearly our whole tenure there. For better or worse, we went through 4 executive directors. In the end, the issues caused by the last one under our tenure became too stressful for Roger and he had to step down. I had stepped down a couple months prior to that and Roger said that played into his decision as it wasn’t as much fun without us there together.
Roger helped make this building possible.
Roger left a legacy at MCEDC as a founding member, but at times that legacy was as much in his support role as when he was out in front. He was my vice chair when I chaired the organization. When I wanted to gather the communities together to foster better understanding and cooperation, he worked behind the scenes to help me. That became the quarterly County Development for the Future (CDFF) meetings, which made Culver Stellar designation and Marshall County Stellar designation possible. I don’t know that I could have made those county meetings happen without his help. He was also the one that made the New Market Tax Credit project happen. Without him, the financing of the pool and the new building for the Marshall County Community Foundation (MCCF) would never have happened. It was his knowledge and contacts with the State that made it viable. These are just a couple of the things that I was closely tied with and can relate. I know there are many others. But Roger wasn’t one to want credit. He was just happy to see the groups he supported succeed.
We remained friends after MCEDC, kabitzing from the sidelines. We also served on the MCCF Investment Committee together, so our civic service together continued to the end. We continued to have nights out together though the last couple of years they were fewer due to Covid and Roger’s health issues. Both of these fueled his impatience. He never liked dealing with things he couldn’t affect!
Thanks for all the great times, wonderful support and unending wisdom, Roger!
Kevin
Marshall County Crossroads Presentation at the Statehouse
Tuesday morning I braved the elements to head to Indianapolis to support the Marshall County Crossroads team for their Stellar Presentation. This was their last effort and last chance to make an impression on the State officials that would be judging the competition this year. This was Marshall County’s second attempt at Stellar Region Designation. The experience they gained last year showed.
I had attended the workshops at Swan Lake, served on the housing committee and helped with the LIHTC portion of the application, so I was familiar with the goals and the changes from last year. I think this year’s application was much stronger than the year before. It was obvious that community engagement was better and the initial partnerships had grown. There was a lot more buy-in from community groups. An example of these expanded buy-in was through the Marshall County Community Foundation (MCCF). They purposefully reviewed the grants in their Fall round for projects that enhanced not just the Stellar application, but the overall Quality of Life plan. Linda Yoder, MCCF Executive Director, was one of the presenters.
Last year there was no IHCDA LIHTC project, but this year I stressed the importance of including LIHTC. This year there were two – one in LaPaz and one in Plymouth. I met with representatives of all of the communities, but only LaPaz and Plymouth felt that LIHTC was a fit for them, were able to come of with property and were willing to pass supportive resolutions. Brent Martin of SRKM Architecture also stepped up to spearhead the IHCDA Owner Occupied Housing portion of the application, so overall the housing section stood out.
While the presentation was well done, what really stood out was the Question & Answer section at the end. All the presenters were seated on the stage and the State Agency’s asked them questions about the initiatives. The answers were provided seamlessly by various representatives and without any competition for the microphone. They worked well together as a team. Some of us were in the audience as back-up if in depth questions came up. There were very few of those that the presenters couldn’t answer on their own. They were well prepared.
The team had arranged for students from some of the schools to be there. Unfortunately, due to the weather, the number of students were limited, but because of the efforts made to involve them, the attendance was appreciated. At one point, somewhat out of the blue, the INDOT representative turned to the students and asked them questions. With no preparation or expectation of this, the two students that spoke answered the questions flawlessly! Very Cool!
Overall I was impressed with Marshall County’s leadership for stepping up to this. The highest Kudos go to Ginny Munroe, Culver’s Town Council President, for stepping up to this challenge. On the heals of Culver’s Stellar Designation, this was a big undertaking. Culver has been moving their Stellar projects forward while this has been happening at the County level. Despite this, Ginny stepped up and lead our region, building on the experienced gained in Culver. I think that was key to making Marshall County competitive. If Marshall County wins, Culver’s assistance will have been a huge part of making it happen.
One Marshall County
October 16, 2023
Kevin Berger
Commentary, Culver, LaPaz, Marshall County, MCCF, MCEDC, Plymouth, READI
Community, Planning, Trends, Volunteering
Marshall County Economic Development Corporation (MCEDC) and Marshall County Crossroads started conversations earlier this year about creating an over-arching organization to coordinate efforts throughout the county. This was looked at as the next step forward for Marshall County Crossroads. (Marshall County Crossroads seems to be faltering. Their website has not been updated since 2021. This is at least partially due to a lack of funding.) They created what was called the Collaborative Council, which has adopted “One Marshall County” as the name for the new organization. I was asked to join this group late in the game as they were missing input on housing; a target on the local, regional and State level. As I understood the initial mission, there were two main goals, 1) to try and coordinate the efforts amongst the various groups to better use funds and personnel, and 2) to form a united front and coordinated funding request when READI 2.0 project requests are announced.
While I’m generally supportive of the effort, I’m feeling a bit of Deja Vu’. I helped form the Second Century Committee in Culver. This came about around Culver’s bicentennial as a collaborative planning committee to coordinate the efforts of the various clubs, organizations and the town government. In Culver’s case, it was started as a subcommittee of the Chamber of Commerce. It did a lot of good things, including helping work through a charrette and motivating a new comprehensive plan. One Marshall County has bigger plans, and is looking for funding, but I don’t know that they won’t suffer from some of the same issues that came to plague the Second Century Committee.
The Second Century Committee had a core group forming a steering committee that pushed hard to get it started. There were regular meeting, agendas and great collaboration. But when the torch was passed to new steering committee members, the passion and vision didn’t follow. Without common goals, the group meetings changed from planning meetings, to just lunches. As the direction faltered, the group meetings had less and less participation, until they ended up being just the steering committee meeting amongst themselves. Then, instead of being the planning and vision for the collaborative group, the steering committee started doing projects on their own. Some of these were great, but without the help of the larger group, funding became an issue and the steering committee members became burned out. Their efforts to be independent from the chamber lost them some of their chamber support. In the end, they could not find replacements for the steering committee and the group withered and dissolved.
One Marshall County has more grandiose plans. They are requesting funding from municipalities and are planning to solicit businesses as well. They plan on having a director to make sure things proceed. I like what they are trying to do, but there are just a few drivers of the initiative and as with the Second Century Committee, I’m concerned what happens when those drivers are ready to step aside. I am also concerned that many of the groups they hope to pull under this umbrella organization are not currently involved in the planning. They can’t just assume that they will have to fall into place. As an example, Argos is not interested in participating and plans to go their own route.
My other concern is for MCEDC. As a founding member and past board member, I know the good that MCEDC has done and the gap that would be left without them. One Marshall County is targeting the same funding sources with MCEDC slated to fall under One Marshall County. That concerns me. For those not in the loop, and that includes a lot of those funding decision makers, it is going to be hard to differentiate between the two and justify doubling their contributions. (I understand the ask to be a match of what’s being giving to MCEDC for most of those involved.)
I will continue to be involved. The idea of One Marshall County is still evolving and I think it has potential. It’s just hard not to look at this through the lens of Culver’s, now defunct, Second Century Committee…
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