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PARTNERINVESTGROW

2013 ANNUAL REPORT

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ECONOMIC DEVELOPMENT PRINCIPLESFinance Fund supports the work of city, state and federal leaders in creating funding vehicles that encourage private sector investment in community-building assets.

Finance Fund sees and acts on potential. We are a statewide, nonprofit financial intermediary that operates as a social entrepreneur to move public and private capital into Ohio’s most at-risk communities. Our goal is to unlock the potential in people and communities to achieve sweeping, long-term change and create permanent, high-quality jobs.

Finance Fund knows that locally originated solutions are most effective. We provide grants and loans to develop locally originated and owned projects that keep locally earned revenue circulating within the community to serve the needs of residents and businesses.

Finance Fund sees people as initiators and activists on their own behalf and for the benefit of their communities. We come alongside lawmakers and project champions to provide financing for locally originated projects that build and sustain assets within communities.

Finance Fund helps dysfunctional economies get “unstuck” by providing access to funding for much-needed fundamental community assets such as: fresh food grocery stores, health and wellness centers, schools, community facilities, small businesses, commercial real estate and affordable housing. These assets open up new pathways for marginalized and disadvantaged people to create a better quality of life.

Finance Fund is a statewide nonprofit financial intermediary, focused on developing healthy, sustainable economies in low-income, at-risk rural and urban communities throughout Ohio. Our work is guided by our Mission, Vision and Economic Development Principles.

MISSIONFinance Fund builds bridges between resources and the low-income community to improve the quality of life for people.

VISIONFinance Fund will be a leading partner in empowering the low-income community.

In AppreciationFinance Fund thanks our accounting, auditing and tax advisor CohnReznick for sponsoring production of this annual report.

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Dear Friends:

We have a new corporate identity and theme.

Partner. Invest. Grow. is our new theme to accompany our new logo. The words tell the story of what Finance Fund does as well as why we do it.

Finance Fund helps develop healthy, sustainable economies in low-income, at-risk rural and urban communities throughout Ohio. We do this by partnering with public and private entities to make capital investment in areas that are often overlooked or unqualified for traditional financing.

As a result, economies stabilize and revive—and communities grow.

And we all know that growing communities fueled by locally owned and operated businesses and organizations provide people with better places to live, work, learn, worship, play and raise a family.

In this annual report we bring you project stories that demonstrate how partnership, investment and growth have changed lives, economies and entire communities for the better. Thank you for supporting our mission and for making our important work successful. We value your partnership and look forward to continued

innovation and high performance in the year ahead.

Sincerely,

James R. KleinPresident and CEO

FROM THE PRESIDENT AND CEO Dear Economic Development Champions:

It’s been a year of innovation at Finance Fund. We continue to restructure internally to strengthen the organization. This year, we created an Advisory Council to support our leadership team with additional resources, connections and expertise across many areas. We will build membership on this Council from among business, economic development, finance and marketing professionals.

In addition, Finance Fund Capital Corporation (FCAP), our statewide Community Development Financial Institution (CDFI) certified lender, is now an affiliate company alongside Finance Fund. FCAP will continue to promote economic revitalization and community development by providing access to capital. FCAP’s portfolio of loan products includes the SBA Community Advantage program, Small Business Loan Fund, and the Community Health Loan Fund aimed at expanding health and wellness services in disadvantaged communities.

Finance Fund also made three additions to our senior leadership team to strengthen our work in legal, strategic initiatives and communications and development.

Please enjoy all the client stories presented herein, and visit our website (www.financefund.org) to learn more about how we put our Mission into action. You can keep current on our work by following our blog, also found on our website.

If you have a project idea or would like to support our work through a contribution, sponsorship, partnership or investment arrangement, we’d like to talk with you.

Sincerely,

Randy RunyonOhio Association of Community Health CentersChair, Finance Fund Board of Directors

FROM THE BOARD CHAIR

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NEW MARKETS TAX CREDIT LOAN FUNDFinance Fund has received eight federal New Markets Tax Credit allocations since the program was launched in 2004, totaling $240 million. By the close of 2013, NMTC financing has leveraged $501 million on an investment of $221 million for 48 projects. These projects have provided 621 units of housing, created 7,763 direct jobs and served 536 children.

ECONOMIC DEVELOPMENT GRANT Since 1997, the Economic Development Grant has leveraged $147 million on an investment of $6.6 million for 76 projects and created 3,818 direct jobs.

Since 1987, Finance Fund and its affiliates have invested more than $296.4 million in small businesses, community facilities, health care centers, housing and commercial development projects throughout Ohio, leveraging more than $1.2 billion.

This investment was accomplished through 2,950 awards to community-based organizations throughout the state. Finance Fund provides debt and equity to our clients through the management of 22 entities totaling $220 million.

Partnerships have enabled low-income people access to 21,147 direct jobs and 15,750 units of affordable housing. In addition, partnerships have created, 3,036 early care and education classrooms for 69,497 children.

2013 REPORT TO THE COMMUNITY

FCAP is the lending affiliate of Finance Fund. It made its first loan in 2006 and has leveraged $46.4 million on an investment of $17.6 million to 24 borrowers. FCAP has provided 22 housing units and helped create or retain 772 direct jobs.

Capital Corporation

PREDEVELOPMENT GRANT The Predevelopment Grant has leveraged $87.2 million on an investment of $6.9 million for 517 projects. Grants have provided 7,427 housing units and created 7,490 direct jobs since 1992.

SMALL BUSINESS LOAN FUND Through the Small Business Loan Fund, Finance Fund has leveraged $36.5 million on an investment of $11.7 million to 22 small businesses, which provided 22 housing units and created or retained 442 direct jobs since 2006.

7,763 621 536

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3,818

7,490 7,427 442 22

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Two of Finance Fund’s client projects won major awards in 2013 for excellence in economic development.

Kent State Hotel & Conference Center in Kent, Ohio won the Council of Development Finance Agencies (CDFA) Excellence in Tax Credit Finance Award given for innovative development finance programs, agencies, leaders, projects and success stories nationally. Finance Fund provided $8 million in NMTC financing.

GE Aviation EPISCENTER in Dayton, Ohio was named the Ohio Economic Development Association’s (OEDA) Best Economic Development Project in the State for economic and business development that retains or generates jobs and investment. Finance Fund provided $7.5 million in NMTC financing for this project.

Deployed over $36 million in financing and grants for 103 community-based projects that will generate 1,234 full-time jobs and 1,486 construction jobs.

Allied with healthy food coalitions across Ohio and the nation to study best practices in expanding healthy food access in low-income communities and determine next steps for Ohio.

Worked alongside U.S. Representatives Steve Stivers and Mike Michaud to encourage bipartisan support for a letter to House Ways and Means Chair David Camp supporting New Markets Tax Credit renewal and permanency.

Partnered with public and private entities to establish the $6.5 million Community Health Loan Fund to provide financing for health and wellness-related projects serving disadvantaged clients in low-income rural and urban communities.

Developed a contemporary logo and theme to reflect Finance Fund’s work and evolution.

Closed on our first SBA Community Advantage 7(a) loan for $175,000 for A Colorful World Learning Center in Columbus to expand quality child care services to low-and-moderate-income families.

Continued to strengthen our executive leadership team with the addition of Andrew Swary, Esq. as EVP General Counsel; Mark Barbash as EVP Strategic Initiatives; and Kimberly Scher, APR, as EVP Communications and Development.

FINANCE FUND

2013 HIGHLIGHTS1,234 1,486

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Located at the mouth of the Maumee River, the largest river that flows into the Great Lakes, the Port of Toledo is part of the St. Lawrence Seaway System. Toledo is within a 500-mile radius of 43 percent of the US and 47 percent of the Canadian population. Toledo is closer to many major ports in Europe than US East Coast and Gulf Coast ports.

More than 15,000 linear feet of rail now connects the Port to the nearby Norfolk Southern rail line.

A multimodal delivery system includes a new, 19,000-sq.ft. warehouse, currently under construction, which will house two rail spurs and an overhead crane.

The Port of Toledo has expanded operations and increased material handling service via an $18 million, multi-phased redevelopment project at its 180-acre Ironville Terminal site in east Toledo. The expansion is bringing jobs and greater economic development not only to Toledo, but to the entire Midwest which is served by the international freight that flows through the Toledo Shipyard on Lake Erie.

Owned by Toledo-Lucas County Port Authority (TLCPA), and operated by Midwest Terminals of Toledo, Inc., the Ironville site was redeveloped with a combination of public and private financing that included $15.36 million in federal and state New Markets Tax Credits (NMTC) from Finance Fund. PNC New Markets Investment Partners, LLC, the investor, provided an additional $2.5 million in federal allocation.

The busy port supports Midwest routes with access to major rail systems including Norfolk-Southern and Canadian National railroads, interstate trucking (I-75/I-80/90) and air routes. With an experienced crew and heavy cranes, the terminal can lift, load, transfer and reload tonnage between rail, trucks and ships on a 24/7 fast-turn basis.

Toledo Port Expansion Opens Express Lane to the Midwest

Shoreline improvements prepared a deep-water marine dock for barges and vessels that operate on the Great Lakes and oceans.

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A Learning Center helps hundreds of dual-language learners (six years old to adult) with literacy development, job readiness and life skills development.

The project expands the Center’s capacity to meet the needs of a growing immigrant community.

Resettled Turkish immigrants will learn new job readiness skills, improve their literacy and celebrate their culture at the Ahiska Turkish American Community Center, which received a $124,117 economic development grant from Finance Fund to improve classroom and recreation space.

This grant funding is an investment in education and tools that members of the Ahiska Turkish American community can use to become productive U.S. citizens and contribute to revitalizing the greater Dayton region which has high unemployment and poverty rates.

The resettlement program was launched to end decades of suffering among Meskhetians (Ahiska Turkish citizens) living in Russia’s southern Krasnodar region. What started with only 84 Meskhetians moving to the United States has become a major resettlement effort that has assisted thousands to become new U.S. citizens.

Ahiska Turkish Refugees Revitalize Emerging Dayton Resettlement Neighborhood

INVEST The community center hosts a variety of cultural programs and activities.

Finance Fund’s economic development grant funded furniture for additional classrooms, smart boards, copiers, video equipment, and supplies/equipment for art and music as well as an air conditioning unit for the community center’s gymnasium. The grant ensures that the community center is properly equipped to serve people of all ages.

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Targeted student enrollment is 150 students for the 2013/2014 school year and will grow to more than 300 students in three years.

The project serves a neighborhood with a 29.9 percent poverty rate, 13 percent unemployment rate and median family income of 34 percent.

A new free public charter high school for at-risk inner city youth aims to graduate 80 percent of its students and provide them with life, job and relationship skills that will see them through a lifetime. Finance Fund provided $9.56 million in federal and state New Markets Tax Credits to Central Ohio Youth for Christ (COYFC) to renovate the vacant Chicago Avenue School building into Franklinton Preparatory Academy.

COYFC provides opportunities for inner city kids to build relationships by working with caring adults who they learn to trust. Because only 20 percent of area students currently graduate from high school, COYFC saw a need to grow its services to include a charter high school.

Franklinton Preparatory Academy readies students for life after graduation along four pathways: college, trade school, living wage-paying careers, or the military. The curriculum uses the blended learning model that keeps students with their class but offers computer-aided assistance in areas where they need additional academic support to catch up. This ultimately helps students discover their individual strengths and interests and develop specific academic and social goals.

Part of the Chicago School building will be used by COYFC to create spaces where kids can learn the skills that lead to careers. After-school and weekend programs include recording arts, automotive, textiles and ceramics.

New Inner City Charter High School Teaches Life and Job Skills

The addition of a charter high school creates a greater opportunity to impact students’ educational experience, including a post high school career path.

GROWCOYFC has increased the number of 15-18 year olds in school or employed by 45 percent, decreased teenage pregnancies by 8 percent and decreased drug and alcohol use by 28 percent.

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FINANCE FUND

2013 FINANCIALS

Finance Fund’s investment into infrastructure projects such as The Port of Toledo will help struggling Midwest economies grow into thriving communities.

Finance Fund raised more than $51 million in public and private investment in 2013. The total includes $48.2 million in program capital and $3.7 million in operational revenue. Program capital was derived from a $40 million federal New Markets Tax Credit (NMTC) allocation, $2 million from the Ohio NMTC program, $3 million to seed the Small Business Loan Fund, and a $1.7 million grant from Ohio Development Services Agency in addition to approval of $1.5 million from investors to conduct research around the feasibility of launching a financing program to increase access to healthy foods in Ohio’s food deserts.

The organization was successful in investing and deploying $35.3 million across three major loan programs. More than $31 million was invested through the federal and state NMTC programs for projects located in Zanesville, Cincinnati and Columbus. The Small Business Loan Fund deployed $275,000 for two projects. $3.87 million was redeployed using recycled NMTC. In addition, Finance Fund disbursed $1.1 million in grant funds leveraging over $20 million.

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COMMUNITY IMPACT AND OUTCOMES2013 Outcomes

Predevelopment Grant

Funded Projects 8

Funds Invested $174,296

Project Funding Leveraged $239,496

Direct Jobs 342

Commercial Square Footage 188,542

Economic Development Grant

Funded Projects 6


Project Funding Leveraged $19,744,840

Direct Jobs 448


New Markets Tax Credit Loan Fund

Funded Projects 6

Funds Invested $34,996,403


Housing Units Produced 232

Housing Square Footage 178,233

Direct Jobs 1,817


Small Business Loan Fund

Funded Projects 2



Direct Jobs 113


ByCar (Cars for Jobs and Diplomas)

Funded Projects 81



Individuals Impacted 188

2013 Outcome Overview

Funded Projects 103



Housing Units Produced 232

Housing Square Footage 178,233


Direct Jobs 2,720

1987-2013 Outcomes

Housing & Economic Development Projects

Funded Projects 825


Project Funding Leveraged $1,105,072,692

Housing Units Produced 15,750

Low Income Individuals Served 60,365

Direct Jobs 21,060

Square Footage 9,551,348

Early Care & Education Projects

Funded Projects 1,773



Early Care & Education Rooms 3,036

Low Income Children Served 69,497

Direct Jobs 87

Square Footage 1,309,432

ByCar Projects

Funded Projects 352



Low Income Persons Served 532

1987-2013 Outcome Overview

Funded Projects 2,950


Project Funding Leveraged $1,204,402,623

Housing Units Produced 15,750

Direct Jobs 21,147

Low Income Individuals Served 130,394

Early Care/Education Classrooms 3,036

Housing/Commercial/ Early Care Square Footage 10,860,780

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BALANCE SHEET

Cash and Cash Equivalents $13,539,323

Cash Held for Others $43,963

Restricted Cash $8,002,006

Receivables:

Notes $10,905,976

Grants $472,500

Interest $465,652

Investments $9,834,859

Certificates of Deposit $6,502,654

Prepaid Expenses and Other Assets

$3,364,628

Total Current Assets $53,131,561

Current Assets

Notes Receivable, Net of Current Portion and Provision for Loan Loss $167,604,036

Total Other Assets $167,604,036

Total Assets $220,735,597

Other Assets

Long-Term Liabilities

Accrued Lease Expense $23,745

Deferred Revenue $282,516

Loans Payable, Net of Current Portion $17,721,609

Total Long-Term Liabilities

$18,027,870

Total Liabilities $25,663,104

Net Assets

Unrestricted

Controlling Interest $14,572,169

Noncontrolling Interest $172,948,583

Temporarily Restricted $7,551,741

Total Net Assets $195,072,493

Total Liabilities and Net Assets $220,735,597

Current Liabilities

Accounts Payable $922,497

Cash Held for Others $43,963

Current Portion of Loans Payable

$6,668,774

Total Current Liabilities $7,635,234

Liabilities & Net Assets

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SOURCE OF FUNDS DISTRIBUTION OF FUNDS

Asset Management Income $650,000

Return on Investments $332,000

Grant Income $189,000

Miscellaneous Income $22,000

$1,193,000

Total $5,550,000

NMTC Income $2,587,500

Ohio Regional Convergence Partnership $55,000

Interact for Health $8,500

Appalachian Ohio Funders Group $5,000

2013 Private Investment

2013 Other Revenue

Ohio Development Services Agency $1,701,000

$1,701,000

2013 Public Investment

Economic Development $698,000

By Car $219,000

Housing $160,500

NMTC Expense $170,500

Functional Allocation $2,327,000

$3,575,000

Salaries & Fringe Benefits $2,382,500

Professional Services $131,500

Office Expense $365,000

Marketing Expense $241,000

Rent & Insurance $159,500

Interest Expense $141,500

Other $309,000

Functional Allocation ($2,327,000)

$1,403,000

Total $4,978,000

31%

48%

21%

2013 Program Services Expense

2013 General & Administrative Expense

72%

28%$2,656,000

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SUBSIDIARIES2013 Lending

NMTC $34,996,000

FCAP $275,000

Total $35,271,000

NMTC Companies

Community Loan Fund New Markets I, LLC $3,712,000

Community Loan Fund New Markets II, LLC $11,087,000

Community Loan Fund New Markets III, LLC $9,329,000

Community Loan Fund New Markets V, LLC $15,597,000

NMTC Leveraged I, LLC $463,000

NMTC Leveraged II, LLC $7,992,000

NMTC Leveraged III, LLC $6,041,000

NMTC Leveraged IV, LLC $5,228,000

NMTC Leveraged V, LLC $10,113,000

NMTC Leveraged VI, LLC $14,934,000

NMTC Leveraged VII, LLC $17,727,000

NMTC Leveraged VIII, LLC $9,912,000

NMTC Leveraged IX, LLC $6,981,000

NMTC Leveraged X, LLC $7,428,000

NMTC Leveraged XI, LLC $10,954,000

NMTC Leveraged XIII, LLC $7,962,000

NMTC Leveraged XIV, LLC $9,159,000

NMTC Leveraged XV, LLC $12,784,000

NMTC Leveraged XVI, LLC $8,029,000

NMTC Leveraged XVII, LLC $7,016,000

NMTC Leveraged XVIII, LLC $7,001,000

Total $189,449,000

BOARD OFDIRECTORS

ADVISORY COUNCIL

Randy Runyon, Chair, Ohio Association of Community Health Centers

D.R. Gossett, Vice Chair, Ironton Lawrence County Community Action Agency

Phillip Smith, Treasurer, Youngstown Choice Homes

Vickie Eaton Johnson, Secretary, Fairfax Renaissance Development Corporation

Keith Burgess, Huntington National Bank

Mary Burke Rivers, Over-the-Rhine Community Housing

Carole Grimes, Community Representative

Jerry Katz, Huntington National Bank (Retired)

Ben Kenny, WSOS Community Action Commission

Ryan Miller, Habitat for Humanity of Ohio

Mark Barbash, Finance Fund

Keith Burgess, Huntington National Bank

Mary Burke Rivers, Over-the-Rhine Community Housing

Vickie Eaton Johnson, Fairfax Renaissance Development Corporation

D.R. Gossett, Ironton Lawrence County Community Action Agency

Suzette J. Grant, Finance Fund

Carole Grimes, Community Representative

Reginald Johnson, Columbus Metropolitan Housing Authority

Jerry Katz, Huntington National Bank (Retired)

Ben Kenny, WSOS Community Action Commission

James R. Klein, Finance Fund

Ryan Miller, Habitat for Humanity of Ohio

Randy Runyon, Ohio Association of Community Health Centers

Kimberly Scher, Finance Fund

Chris Smith, The HealthPath Foundation of Ohio

Phillip Smith, Youngstown Choice Homes

Andrew Swary, Finance Fund

Diana Turoff, Finance Fund

Kendra Vincenty, First Financial Bank

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STAFFMark Barbash

Len Barbe

Una Barbee

Mary Burke-Rivers

Christopher Burnham

Peggy Calestro

Barbara Conover-Webb

Roger Deerhake

Jeff Dolan

Stephanie Duffy

Ginny Edgington

Matt Frank

Michael Goldman

Mary Ann Grabill

Timothy Hagerty

Tamra Hall

Valerie Heiby

Steven Hines

Ben Kenny

Greg Kiger

Jerry Katz

James Klein

John Laverty

Steve Lorenz

Bruce Luecke

Larrinda Lyles

Sean McGee

Julie Nichols

Richard Omohundro

Mimi E. Rayl

Debbie Rosier

Kimberly Scher

Anne E. Schrantz

Colleen Schwarz

Meg Slifcak

Moniqua Spencer

Amanda Sprague

Andrew Swary

Katrina Thompson

Linda White

Marilyn Willhoff

DONORS AND SPONSORS

CohnReznick

The Columbus Foundation

Fairfax Renaissance Development Corporation

Freeport Press Inc.

JPMorgan Chase

Ohio Capital Impact Corporation

PNC Bank

Senior Executive TeamJames R. Klein President and Chief Executive Officer

Mark Barbash Executive Vice President Strategic Initiatives

Kimberly Scher Executive Vice President Communications and Development

Moniqua Spencer Executive Vice President Lending and Programs

Andrew Swary Executive Vice President General Counsel

Diana Turoff Executive Vice President and Chief Financial Officer

Una Barbee Executive Assistant

Kim Caine Program Officer

Tara Campbell Loan Officer

Kim Coleman Credit Officer

Bruce Cook Asset Manager

Ginny Edgington Program Assistant Senior

Matt Frank Controller

Suzette J. Grant Vice President, Human Resources

Tamra Hall Paralegal

Valerie Heiby Director of Development

Jennifer Hunt Fiscal Assistant

Larrinda Lyles Administrative Assistant Senior

Tim Marcum Director of Information Technology

Julie Nichols Quality Assurance Analyst

Amber Seitz Communications and Development Manager

Amanda Sprague Associate Manager of Communications and Development

Makeba Wilson Legal Assistant

To discover more about Finance Fund and how we leverage public and private funding to drive economic development in low-income communities throughout Ohio, visit www.FinanceFund.org. We invite you to follow our blog – www.FinanceFund.org/blog – and connect with us on Facebook, Twitter, and LinkedIn.

175 South Third Street, Suite 1200 Columbus, Ohio 43215 614.221.1114 t 800.959.2333 t 614.221.7493 f www.financefund.org

Finance Fund thanks our 2013 Annual Report Sponsor

www.cohnreznick.com

PARTNER INVEST GROW - Finance Fund Documents... · Finance Fund helps dysfunctional economies get...

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