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Spark Capital
1111 N. 13th St., #311 Omaha, NE 68102
Same
www.sparkcdi.org
https://www.facebook.com/SparkCDIOmaha, https://linkedin.com/company/sparkcdi
Jamie Berglund
Executive Director
jamie@sparkcdi.org
+1 (402) 819-4885
Yes
Spark has 10 FTE, two boards of directors, an advisory board, and two contracted consultants that collectively support the creation, implementation, and evaluation of our technical assistance services, lending programs, advocacy, and projects.
Spark is a nonprofit community development intermediary, working in Omaha since 2016 to profoundly transform disinvested neighborhoods into prosperous and thriving communities. In 2019, Spark created a real estate lending program to support quality development in Omaha, including housing, commercial, and community facilities. Additionally, we provide real estate development technical assistance services primarily focused on individuals who identify as BIPOC (Black, Indigenous, People of Color) and women. This is delivered through a comprehensive educational, relationship building program called the Developer Academy. We have completed four cohorts to date with 62 graduates (see attachment). We have made three loans totaling nearly $1 million in acquisition and construction financing and are in the process of closing on two more acquisition loans totaling $725,000. All loans have been made to create or maintain affordable housing in Omaha. Our technical assistance services have reached more than 200 individuals in 2022, with over 25 emerging developers actively engaged in real estate development totaling more than $105,668,600 in economic activity. 95% of the developers we support identify as people of color and/or women.
East Omaha Development Fund
35150000.0
32749997.0
Combination of capital project and service/program
Spark Capital is seeking funds to grow our loan fund to support ARPA-eligible real estate projects in qualified census tracts in East Omaha and provide enhanced real estate development technical assistance services to emerging real estate developers, property owners, and landlords, with priority to those who identify as Black, Indigenous, People of Color (BIPOC) and/or women.
July 1, 2023 – Receive funds and begin issuing predevelopment and acquisition grants, and construction and permanent loans. Hire two FTE to support grant and loan fund deployment and provide enhanced technical assistance services December 31, 2023 – Aim to have deployed at least 16% of predevelopment and acquisition grants, and 10% of construction and permanent loans July 1, 2024 - Aim to have deployed at least 33% of predevelopment and acquisition grants, and 14% of construction and permanent loans December 31, 2024 - Aim to have deployed at least 50% of predevelopment and acquisition grants, and 20% of construction and permanent loans July 1, 2025 - Aim to have deployed 67% of predevelopment and acquisition grants, and 30% of construction and permanent loans December 31, 2025 - Aim to have deployed 84% of predevelopment and acquisition grants, and 40% of construction and permanent loans July 1, 2026 - Aim to have deployed 100% of predevelopment and acquisition grants, and 50% of construction and permanent loans The result at the end of July 2026 is as follows: • $8.5M deployed over 3 years in the form of predevelopment and acquisition grants • $11.25M deployed over 3 years in the form of construction loans (12-24 month term with 4% interest rate) and permanent financing (20-30 year term with 2% interest rate) • $1.5M spent on operations over 3 years • $21.25M/$32.75M
0.65
Fundamental Change (i.e., a proposal that will continue to elevate North or South Omaha's presence and perception within the region, significantly improving the lives of area residents through physical development) Long-Lasting Economic Growth (i.e., a proposal that will foster gainful employment opportunities and financial investment in the area, leading to the creation of generational wealth and widespread economic vitality in North and South Omaha) Transformational (i.e., a proposal that will help energize, recharge, or spur significant and favorable advancements in North or South Omaha's function or appearance)
Other Infrastructure (i.e., develop or improve broadband, business districts, roadways, sewer, etc.) Policy (i.e., develop or improve context-sensitive education, finance, health, training, zoning, etc.) Quality of Life (i.e., create or enhance natural spaces, mixed uses, parks, safety, etc.) Sustainable Community (i.e., create or enhance housing, services, education, civic uses, recreation, etc.)
Predevelopment and acquisition grants and construction and permanent financing address sustainable community, other infrastructure, quality of life and policy needs by providing critical funds for project conceptualization and design, and financing to support project construction and operation. The funds will increase the pipeline, diversity, and capacity of emerging real estate developers and property owners and create wealth-building for their families and future generations. Additionally, their developments within qualified census tracts will promote housing security and healthy communities. Ultimately, as a revolving loan fund, we will be able to recycle this funding to support future developments for years to come, and a way to ensure that holistic development continues to occur beyond 2026.
Describe how the proposal aligns with the findings in the Visioning Workshop Summary and identify the specific gaps or other community needs that your proposal addresses. This proposal capitalizes upon and addresses numerous strengths, weaknesses, opportunities, threats, and critical needs in South and North Omaha. Through grants, loans, and intense technical assistance, Spark Capital will support emerging developers of color and women to envision, develop, own, and directly benefit from real estate development in their community. This strategy directly invests in the culture, character, physical assets, and residents of North and South Omaha, maximizes and provides a means for infill development, preservation, and infrastructure improvements to support more density, housing, commercial spaces, and economic activity, and enhances the sense of place and positive identities of East Omaha neighborhoods.
The proposed East Omaha Development Fund project aligns with all LB1024’s strategic priorities. Real estate development is a transformational change to a neighborhood that provides long-lasting fundamental change through the physical creation of housing, commercial and community spaces. Furthermore, the process of development offers great immediate economic growth through the employment of area residents in all aspects of the construction, and long-lasting economic growth, through the transition of vacant and unused spaces into thriving businesses, residences, and public spaces. Our proposal seeks to maximize the use of these once-in-a-lifetime funds, to ensure that the opportunity they offer continues to develop North and South Omaha beyond 2026.
All jobs created will comply with Davis-Bacon wage requirements. Below is our best estimated job creation overview based upon the job production of developments currently in our loan fund portfolio.
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In addition to the emerging real estate developers who reside or work in the QCTs, our current and future programming will continue to make direct connections and build business relationships between emerging developers and neighborhood/QCT-based allied professionals and contractors in the real estate development industry.
A diverse workforce can capture a greater share of the consumer market. By bringing together individuals from different backgrounds and experiences, i.e., architects, engineers, builders, city staff, etc.) business can more effectively market to consumers from different racial and ethnic backgrounds. Working together with developers by providing access to lower than market interest rate funds to develop real estate, will diversify the economy, rebuild communities, and bring families back into the North and South Omaha areas. These developments will then help support improvements to education, public health, transportation, and recreation, through an increased tax base. Our proposal will help to develop real estate, utilizing funds to help developers acquire the land that in many cases are abandoned and vacant properties. This will help to revitalize vacant, and abandoned properties and to bring equity into the community. By giving loans and grants to developers who live and work in the community to develop affordable housing and to develop small business that will benefit the community with their services, it will build wealth within the developers, and generational wealth those who will buy the homes.
At Spark, we believe in the power of community. By engaging stakeholders, we listen to their priorities to drive the focus of holistic community development and provide capacity-building opportunities to strengthen their ecosystem of local decision-makers and enhance their skills in real estate and community development. The neighborhood residents should have the foundational assets necessary to thrive and prosper – and we provide those assets. Spark Capital works to provide intentional capacity-building experiences for emerging developers that encourage community sustainability and leadership. Individuals who have a stake in their community stay in their community. With a combination of financial and sweat equity, our participants are reintroducing economic growth in historically disinvested areas. Be it a community center, single-family home, or multi-family complex, our emerging developers, many times with the assistance of Spark Capital, further identify the needs of North and South Omaha residents and create concrete plans. Our proposal aligns directly with these efforts, as our loan and grant products, in conjunction with our hands-on programming, can and will positively impact communities for years to come -- from beautifying vacant lots, providing affordable housing opportunities, to organically boosting individuals’ overall quality of life.
Omaha’s real estate development community is largely male, white, and rooted in generations of wealth and privilege. Investing in people of color and women to develop real estate in our community is innovative and equitable. Spark Capital’s loan fund and unique technical assistance services are the first of its kind in Omaha and are largely unmatched by our peers. However, the model for our work is highly successful in other communities across the country. Spark Capital partners with national consultants to ensure that the work we do is rooted in best practices across the country. From our membership with the Opportunity Finance Network to provide training and support, to our partnership with the National Development Council to provide curriculum instruction for our Developer Academy training program, we seek out experts in the field of community development finance to ensure that our work is innovative and successful.
We will measure several outcomes to ensure improved education, the quality of services, and completed developments. Our overall goal will be to expend all granted ARP funds, allowing for revolving investments by community members and the resurgence of generational legacy and wealth-building in families of color. Our proposal leads the charge of lowering the barrier of entry for real estate development by providing attainable financial options for emerging developers, which also aligns with our continued commitment to ongoing technical services, training, and one-on-one support for all participants throughout the duration of initiated projects. We anticipate 50-75 hours of assistance for each development project. With that, ongoing reflective surveys and technical check-ins with the Spark Capital team will assist in measuring progress and identifying any gaps in learning to ensure evidence of improved education. In collaboration with our community partners, including industry experts ranging from architects and city planning officials, qualified participants will be supported throughout the development process, consequently propelling them through the loan process for them to then become return borrowers for other projects within areas experiencing disinvestment. In addition, we will maintain a record of service hours, project objectives, and its economic impact including dollars cycled back into the community and the increase of BIPOC- and women-led projects.
In addition to the key financial indicators of success – percentage of funds deployed, number of units of housing created, and total investments leveraged by the loan fund, our proposal will implement several established methods of measurement in the realm of self-reflection, surveys, individual development plans, and intentional, progress-driven check-ins. Self-reflection helps students participate in and take ownership of their learning. Real estate development requires developers to be confident in their skillset and knowledge, therefore our goal is to assist until we are no longer needed, and we must ensure self-confidence in their practice is increasing as they continue utilizing our loan/grant programs. Surveys allow intentional feedback from students, teachers, and other involved parties to instill accountability toward desired outcomes and identify needed modifications. In conjunction with a written plan of action, we desire to check in, so funds are being spent efficiently and evidence of progress is present. Spark Capital has established several volunteer boards that oversee our programming, providing external input and perspectives. A list of both the Spark Capital Board and the Developer Academy Advisory Board are included with our organizational chart. Such boards assist in identifying our successes, areas of improvement, and future needs during our quarterly meetings as they are made up of industry partners, Developer Academy graduates, and community members. Our previously mentioned methods of measurement are shared with these boards. As the Spark team receives feedback, reflect, and revise accordingly.
All the projects funded by the proposed East Omaha Loan Fund will require secondary investment. We anticipate that in addition to the personal equity our emerging developers will bring to their real estate development projects, they will work with our banking partners to finance traditional market rate loans. If we project a modest 50% bank and personal investment ratio to the ARP funds, we can anticipate an additional $XX Million in leveraged dollars – just for the initial fund deployment. Additionally, success of the Spark Capital Loan Fund will increase the likelihood of additional funding from the Community Development Financial Institutions (CDFI) Fund through the Department of the Treasury. Spark Capital has already secured three technical assistance awards and will apply for CDFI certification in the spring of 2023. We anticipate receiving an annual award of at least $5 million in additional lending capital from the CDFI fund once we are certified, and our applications for this funding will be strengthened by a strong initial portfolio of projects.
Yes
Over the last two years, Spark Capital has secured more than $4 million in lending capital from 16 different public and private sources and secured more than $750,000 in operating and programming funds from foundations, the federal government, national lending institutions, and local corporations. Key local partners include Front Porch Investments, all our peers within the community development and housing space such as Canopy South, Seventy-Five North Revitalization Corporation and the Omaha Municipal Land Bank, more than 50 professionals from architecture, engineering, development, sales, construction and financing who partner with us to provide the technical and one-one-assistance through our Developer Academy, and most importantly, the more than 60 emerging developers we have engaged through programming and technical assistance services over the last three years. Additionally, we contract with two technical assistance resources, the National Development Council, and the Impact Development Fund, to assist with the implementation of our development services and the underwriting and servicing of our loan fund.
Impact Development Fund and National Development Council
No
The rationale for the dollar amount requested is to create a grant program to fund emerging developers' predevelopment and acquisition expenses and grow the Spark Capital loan fund to meet projected future construction and permanent financing needs. Interest rates hikes combined with less willingness from banks to take risks is resulting in limited and expensive institutional lending. By growing our construction financing and creating a modest permanent financing program, Spark Capital can be an accessible source of financing for emerging developers and projects in economically struggling neighborhoods in QCTs.
$8.5M deployed between July 2023 and July 2026 through ~20 predevelopment and acquisition grants $13.5M deployed between July 2023 and December 2026 in ~15 construction and permanent loans, the remaining $9M to be deployed in 2027 and 2028 in ~10 construction and permanent loans, repayment of loans will revolve into ongoing construction and permanent loans for ARPA-eligible projects $1.75M to support operations and enhanced development services between July 2023 and December 2026
Yes
Repayment of loans will provide a source of revolving lending capital for future projects. Interest and fee income earned from loan origination and loan servicing, and fundraising, will provide funding to support our development services and program operations.
See attachments.
e have secured $125,000 from the CDFI fund for operations in 2023, along with $136,775 from Front Porch Investments and $20,000 from the Nebraska Affordable Housing Trust Fund to support a Spanish-language Developer Academy in 2023
The funds for the permanent financing element of this proposal are vital to creating and sustaining a permanent lending. Additionally, the funds for Development Services are critical to ensure emerging developers have high-quality resources and knowledge to deliver on their projects.
Yes
This proposal is scalable; more funding could result in more grants, loans, and increased and specialized technical assistance. The proposal could be delivered in smaller components. However, grants for predevelopment and acquisition will help overcome the barrier to entry for emerging developers, permanent financing is vital to the long-term stability of a project, and funds for development services will ensure the emerging developer is set up for success.
$4.3 Million in Loan Fund Capital and $136,775 from Front Porch Investments and $20,000 from the Nebraska Affordable Housing Trust Fund to support a Spanish-language Developer Academy in 2023. See attached detail on current Loan Fund capital and operating support.
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Data table of uses (breakdown of how the requested funds will be used for your proposal) Organizational Chart Proposal Budget/Sources and Uses Schedule