Benefit Chicago Fund Commits $10M to Redevelop Schools as Affordable Housing
"Patient, flexible, risk-tolerant capital can fill a gap in the financing marketplace, help revitalize neighborhoods, and create opportunities for individuals and families to improve their lives,” says Benefit Chicago executive director Dr. William W. Towns.
CHICAGO, IL—Two organizations whose work will expand affordable housing options in strong Chicago neighborhoods and bring new life to closed public schools are the latest recipients of loans from Benefit Chicago—the collaboration of The Chicago Community Trust, the John D. and Catherine T. MacArthur Foundation and Calvert Impact Capital, formed to make $100 million of new capital available to promote equity and growth in Chicago neighborhoods.
Community Investment Corporation, a decades-old non-profit affordable housing finance organization, will use a $5 million loan as partial funding for a new incentive program designed to increase the supply of affordable housing in thriving or “opportunity” neighborhoods. CIC’s Opportunity Investment Fund will provide access to low-cost financing for developers that acquire existing apartment buildings, if they set aside at least 20% of the units for low-income families. CIC’s goal is to generate 300 new affordable apartments over the next two years.
“Many talk about giving low-income families greater access to communities with more amenities and resources. Benefit Chicago’s loan allows us to do it,” says CIC’s chief executive officer Jack Markowski.
While CIC will focus on increasing access to thriving neighborhoods, the Chicago Community Loan Fund will invest its loan to help revitalize communities in need of investment.
CCLF, a certified Community Development Financial Institution, will use its $5 million Benefit Chicago loan to launch the Repurpose Initiative, an effort to breathe new life into five empty former Chicago public school buildings on the South and West sides. The first redevelopment to be financed by CCLF is the conversion of the former Overton School in the Bronzeville neighborhood. The Washington Park Development Group will transform the empty structure into a business incubator, with 40 individual spaces and a multi-purpose common area. Benefit Chicago resources lent by CCLF to WPDG will provide the early money needed to secure the remaining financial resources.
“For local residents, a closed school signals distress and abandonment,” says Calvin Holmes, president, CCLF. “A revived and repurposed school is a beacon of hope for a neighborhood. It provides needed services and amenities, boosts traffic for nearby businesses, and encourages additional investment.”
Preliminary plans for transforming the other schools include creating a youth business incubator, light manufacturing work space, dormitories for City Colleges of Chicago students, affordable housing, art studios and more. By providing developers with access to low-cost capital to renovate and repurpose closed school buildings, CCLF is helping to transform symbols of loss into new opportunities for growing small businesses, employment, community activities and cohesion.
“The new loans announced today demonstrate how patient, flexible, risk-tolerant capital can fill a gap in the financing marketplace, help revitalize neighborhoods, and create opportunities for individuals and families to improve their lives,” says Benefit Chicago executive director Dr. William W. Towns.
Towns says that the successful CCLF and CIC loan applications were among dozens received and screened. Applicants must meet requirements that include serving a community of need, providing measurable outcomes, and ensuring repayment of the loan based on a sustainable revenue model. Applications are considered on an ongoing basis.
Benefit Chicago has raised $96 million toward a $100 million goal and made more than $25 million in loans.