Oct. 18, 2004
|Photo courtesy of The Low Income Investment Fund
This former warehouse in Brooklyn is now a facility to assist the homeless.
By Linda Bloom*
YORK (UMNS) - In Brooklyn, United Methodist investments have helped
convert an unused warehouse into a 400-bed shelter designed to assist
the homeless in becoming self-sufficient.
In San Francisco, the church’s financial commitment is aiding construction of a "healing center" for Native Americans.
Fort Worth, Texas, United Methodists helped fund the conversion of a
former convent into affordable housing units and arts-related space.
advocacy work is being conducted through the United Methodist Board of
Pension and Health Benefits’ affordable housing and community
development program. From an initial investment of $25 million in 1990,
the program’s commitments have grown to more than $900 million, with
some $600 million invested as of last June.
goal is to make a "positive social impact" while still earning
financial returns equal to the risk, according to Michael Lohmeier, the
program’s investment manager.
that means is this should be comparable to any other investment that we
make on behalf of our participants," he told United Methodist News
date, the program has seen a 7.5 percent return on the total
investment, with loan defaults at less than one-tenth of 1 percent.
the program began in 1990, affordable housing was seen as a primary
need across the United States, Lohmeier said. In the past four years,
the Board of Pensions decided to broaden its program to include other
aspects of community development. "We’ve been adding on a
project-by-project basis," he said.
the project in Brooklyn, the pension and health benefits board
purchased a $15.78 million portion of a $22.15 million permanent loan to
finance the Peter J. Sharpe Center for Opportunity. The facility,
opened last December, is part of the "Ready, Willing and Able" program
of the Doe Fund Inc. Through a variety of strategies, the program has
helped more than 1,100 men and women become drug-free and find full-time
employment and housing.
McDonald, founder of the Doe Fund, told United Methodist News Service
that the fund would never have received the construction loan for the
center without the guarantee of permanent funding. Participation of the
Board of Pension "was a critical piece to the financing of the project
right from the beginning," he said.
in partnership with the city of New York, the Peter J. Sharpe Center
has a security system that allows residents only onto the floors they
live on, a food service that is "the best of any facility in the city,"
classroom space and a medical suite, he noted.
array of amenities and services offered at the center "raises the level
of respect that we, as a city, show for people who are indigent and in
need of help," McDonald said. Because of that, he added, "those folks
treat the facility with respect."
the Peter J. Sharpe Center project, the Board of Pension purchased its
portion of the loan under a special financing structure through the Low
Income Investment Fund. This 20-year-old community development financial
institution has partnered with the Board of Pension before, acting as
an "intermediary" on projects.
role of the intermediary is to help us screen investments," Lohmeier
explained. Intermediaries also help share the risk of investments by
offering first-loss protection and providing loan servicing and
spread the risk, the board tries to co-invest with other institutions
when possible. JPMorganChase Bank was co-investor on the Doe Fund loan,
and its $5 million "participation interest" was used for construction
financing, he said.
development projects include the rehabilitation of 29 single-occupancy
rooms into the Margaret J. Bennett House in Baltimore in 2001. Financing
for the house, designed for low-income women recovering from alcohol
and substance abuse, cost about $9 million. The Board of Pension
provided a $2.8 million bridge loan.
$4.5 million permanent mortgage loan was provided to Woodland City, a
rehabilitated family garden apartment complex in Dallas. A
community-based nonprofit, committed to housing development and social
services for low-income families, led the rehabilitation project.
Fort Worth, Texas, project resulted in the rehabilitation of a former
convent, located in a low-income neighborhood, into more than 40
affordable housing units, along with an arts studio, art gallery,
performance space and theater. The Board of Pension committed $2.7
million to the $6.4 million project.
is intrigued by the construction of an 80-bed residential alcohol and
substance abuse treatment facility, called Friendship House Healing
Center, for homeless Native Americans in San Francisco. The board has
committed $1.8 million to the project. "They’re going to use Native
American and modern medicine to help cure those people of their abuses,"
who has a background in public policy, believes that linking
institutions and their investment dollars to such projects is an
important way to address needs in U.S. society. "There are trillions of
dollars in pension funds that potentially could be directed toward these
social projects," he said.
expressed pride in being part of a longstanding commitment that has
exceeded the expectations of both the Board of Pension and other
investors. "On a personal level, obviously, it’s very rewarding to come
in to work every day knowing you’re going to be able to help people," he
in the United Methodist pension plan who learn of the housing and
development program often want to know how it could impact their own
communities. Lohmeier said he is happy to have conversations with such
participants and help them get in contact with intermediaries "who are
better able to provide the technical assistance than we are."
The Board of Pension has a video available about the program, Sharing The Dream: A Place To Call Home, which can be ordered online by clicking on resources at www.gbophb.org, the board’s Web site.
*Bloom is a United Methodist News Service news writer based in New York.
News media contact: Linda Bloom, New York, (646) 369-3759 or firstname.lastname@example.org.