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Columbia City

2008 Report to Investors

Pontedera

The Northwest Affiliate of Local Initiatives Support Corporation


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A Letter from the Chair

Impact Capital

In 2008, the definition of a disadvantaged community changed. Now, it means neighborhoods where unemployed professionals have lost their homes, their jobs, and their health care. The new homeless are baby-boomer women and middle-class families. With rising foreclosure rates and growing unemployment rolls, more and more neighborhoods are pocked with foreclosed homes and abandoned storefronts. Yet, there is hope. There is increasing evidence that the way to address the challenges of our time is to focus on the root, underlying conditions of inequity and to ensure opportunities for all communities. By increasing the focus on affordable housing, quality education, safe neighborhoods, and other underlying conditions, individuals and families within disadvantaged communities can lead healthier and more prosperous lives. We create vibrant communities by using tools like our predevelopment, acquisition and bridge loans to build affordable housing. We also strengthen neighborhood nonprofits so that once homes are built there is a support network of services to help the new residents. Finally, we work with underserved communities by providing them with our expertise, resources, and training to turn them into vibrant neighborhoods where families can live, work, do business, and thrive. In 2008 we: • Provided nearly 10 million dollars of loans and grants to organizations in Washington to develop community projects, affordable housing, revitalize commercial districts, enhance neighborhood green spaces, and reduce crime. • Partnered with the Seattle Office of Economic Development to launch the Neighborhood Commercial District Revitalization Program. •

Housing Development Consortium of Seattle/King County and the Housing Trust Fund of Washington Department of Community Trade and Economic Development contracted with Impact Capital to provide facilitation for HDC’s Asset and Property Management Affinity Group. To highlight this work and the continued work with CTED on portfolio evaluation, Impact Capital was part of a panel with CTED and the Housing Development Center of Portland at the annual Housing Washington Conference. The panel focused on advances in asset property management within Washington’s affordable housing industry.

• Expanded our partnership with the City of Spokane to explore the options for launching a Vibrant Communities project in the East Central Neighborhood. • Offered 5 training classes for 110 participants from 46 different organizations. While we have made excellent progress over the years, our work is more important now than ever. As credit becomes scarce, nonprofits and communities need our unique programs to survive in this challenging environment. Impact Capital provides the strategic financial support to nonprofits, housing authorities, and tribal entities that help create vibrant communities throughout the Washington state. On behalf of the entire Board of Directors and staff of Impact Capital, I would like to personally thank the many investors and partners who work with Impact Capital to make affordable housing and community development projects a reality in Washington.

Michael Brown Chair, Board of Directors

“Impact Capital knows the problem is more complex than just affordable housing, but we believe real community development starts with a place to live.” Michael Brown Chair, Board of Directors


We help build and sustain vibrant neighborhoods in underserved communities. Impact Capital makes strategic capital investments in nonprofit community development and affordable housing organizations in ways that enhance and sustain their ability to positively impact the quality of life in communities throughout Washington. We help build healthy neighborhoods and communities through our strategic partnerships, expert guidance, and investments by striving to achieve these broad-based goals:

• • • • •

Providing safe, decent affordable housing to people for whom it is out of reach; Promoting vibrant business districts; Increasing family income and wealth; Making neighborhoods safer, more livable, and healthier; and Strengthening local leadership.

“I find it really rewarding, personally and professionally, to be involved in an organization whose efforts:

OUR ROLE IN THE COMMUNITY: Our work helps transform distressed communities and neighborhoods into healthy ones – good places to live, work, do business, and raise families. The role that Impact Capital plays in strengthening communities across the state is significant. We provide early bridge financing for strategic real estate investments. We take the riskiest part of the financing package, thereby attracting other investors to the table. The private market on its own is not well-suited to foster the type of change needed. Private investors are unable to take the deep and broad risks necessary to invest in communities with persistent challenges. Without a strong vehicle for provoking healthy transformation, these communities continue to languish in the gap.

(1) Help those who are often the most vulnerable in our community; and

(2) “Jump start” activities that have a profound, long-term impact on neighborhood vitality and quality of life.“ Randy Robinson Board Member, Key Bank

Impact Capital bridges this gap by stimulating investment in these neighborhoods. In its 15-year tenure, Impact Capital has built a reputation in the private and public investor marketplace as an effective organization that motivates private markets to engage and invests in often underserved and overlooked communities.

REVITALIZATION, NOT GENTRIFICATION: We also help build communities from the ground up. Working with community organizations, local governments, neighborhood partners, and local businesses, we facilitate neighborhood revitalization. Our role is to bring the stakeholders together, help them plan improvements, and put them in touch with the resources and partners needed to succeed. We add value by providing access to resources, leveraging funds, and increasing capacity for community organizations who can sustain the changes for years to come.

2008 Report to Investors

Invest. Transform. Sustain.

OUR MISSION:

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LENDING PROGRAM Impact Capital provides predevelopment, acquisition, construction and bridge loans to nonprofits organizations, housing authorities and tribal entities throughout Washington State. In an economy where credit is becoming scarce, Impact Capital’s role in the funding community is more important than ever. We invest in underserved neighborhoods and we finance projects that oftentimes can’t get a loan elsewhere. Our lending program helps organizations fulfill their missions to build affordable housing and provide community facilities such as food banks, senior centers, and day care centers.

Community Development Loan Fund: $3 million loan pool • Provides zero percent interest loans (for up to $75k) to assist non-profits with feasibility costs required to enable them to develop initial applications for grants and project financing. • Since 1994, 435 loans totaling over $19 million leveraged $1.5 billion in total development costs. • In 2008, Impact Capital made 20 CDLF loans totaling $1,257,179. These loans will help build 414 units of low-income housing.

Community Investment Fund: $26 million loan pool • Provides secured, interest-bearing loans which can be used to acquire land and buildings, pay for pre-development expenses, bridge capital campaigns, and pay for construction costs. • Since 2000, 120 loans totaling over $78 million leveraged nearly $860 million in total development costs. • $0 in losses. • In 2008, Impact Capital made 17 CIF loans totaling $10,627,185. These loans will result in 845 units of low-income housing.

COMMUNITY BUILDING PROGRAM

Impact Capital

Invest 4 Dragon in International District

Legacy House Re

Impact Capital works with key neighborhood partners to help transform distressed communities into vibrant ones. Our approach recognizes that physical development, while critical, is not enough to create truly vibrant communities. As a result, we work with our partners on the ground to strengthen neighborhood commercial districts, create affordable homes, sustain affordability, increase public safety, create parks and open space, improve educational opportunities and help families build homes. Our investment in these neighborhoods create stable communities, stronger families, new community leaders, more green space, and lively business districts. sident

Impact Capital invests time, training, and resources in nonprofit organizations to help them sustain long term change in their communities. This investment has transformed nonprofits and strengthened the community development landscape throughout Washington.


Village Square in the International District A Seattle Chinatown International District Preservation and Development Authority (“SCIDPDA”) Project In 2008, one of our most innovative projects celebrated its 10 year anniversary. The Village Square was developed by SCIDPDA and is an acclaimed product of a neighborhood vision to develop a multi-use facility to support the needs of the urban, vibrant, multi-generational and multi-cultural community. The Village Square offers a wide range of community resources in one convenient location and has quickly become a popular gathering space, serving over 133,000 people a year. It also happens to be a project that received seed funding from Impact Capital.

Sue Taoka, former Executive Director of SCIDPDA According to Mrs. Taoka, Impact Capital believed, “that we should be able to do things multigenerationally and multipurposely… to make the community better. So the very first dollars that ever went into that project I attribute to Impact Capital because nobody else wanted to invest. This project was far out there. It wasn’t just a vanilla housing project or a commercial project, it was something more...That seed money and that belief helped get that project off the ground.” Impact Capital has not only invested in SCIDpda’s projects, such as Village Square, but over the years has helped build their capacity as a community development organization, helped build their community safety initiatives, and provided access to New Market Tax Credits. Village Square highlights Impact Capital’s comprehensive approach of partnering with an organization to revitalize a neighborhood. Ten years after the opening of the first phase of Village Square, the surrounding neighborhood has seen additional investment, reduction in crime, and a true sense of community identity that is attributed to the Village Square project.

Housing Hope Impact Capital believes in strengthening communities by enhancing the local community-based nonprofits that know and deeply care about their neighborhoods.

When Impact Capital first worked with Housing Hope, they self managed their properties and had basic asset management systems. Impact Capital provided operating support and technical assistance to conduct an analysis of current operations and a cost benefit analysis of self managing properties versus outsourcing property management. As a result of our evaluation, Housing Hope decided to outsource their property management. Thanks in part to our guidance, Housing Hope has negotiated contracts to manage their properties to their standards, established performance benchmarks with the property management firm, and analyzed their portfolio’s performance in-house.

Legacy House - the community’s first multi-Asian senior assisted-living facility which provides multi-cultural care, authentic Asian cuisines, and multi-lingual services. Denise Louie Education Center - a childcare center that provides quality, multi-cultural early childhood education services to children from around the city. The Domingo-Viernes Apartments - named in honor of two slain community activists, this is the first affordable family housing project built within the neighborhood in over 50 years. Chinatown International District Community Center managed by the City’s Department of Parks and Recreation, which hosts events, classes, and community activities.

Chinatown-International District Branch of Seattle Public Library - The library seats up to 40 patrons and features a collection of 12,000 books and materials with an emphasis on multilingual and multimedia materials, computer work stations, instruction areas, and modern technology services.

“During the past 15 years Impact Capital has provided an array of tailored investments and supportive grants, which have built our capacity and effectiveness as a Community Development Corporation. This sustained support has given us the tools needed to become a leader in creating affordable housing solutions within Snohomish County.” Ed Petersen Executive Director of Housing Hope

The results have been inspiring, not just for the organization, but for the community. Before, property management had been a drain on the organization’s finances and properties were suffering due to uneven management. Now Housing Hope’s affordable housing units are well maintained, performance has increased significantly, and their residents are much happier.

2008 Report to Investors

Impact Capital began working with Housing Hope in 2004 to help them expand the reach of their programs throughout Snohomish County. Building their capacity for expansion also included looking at all areas of the organization’s operations to ensure that Housing Hope would be able to sustain this growth for the long-term. We assessed and mapped capacity in board governance, human resources, financial management, real estate development, fund development, and asset management.

The International District Village Square features:

Success Stories

ID Village Square, A SCIPDA Project

Before Impact Capital funding, “The idea of doing co-location and intergenerational project like Village Square and how you can pull organizations together to do all this was a dream. Impact Capital put the first money into it before anybody else because there was a belief in the vision, that we should be able to do things collaboratively.”

5 A Housing Hope Project


LENDING PROGRAM Impact Capital helps transform communities by providing loan products that aren’t typically provided by the conventional lending market. Banks, government agencies, and foundations provide investments and loans to Impact Capital, and we in turn use those funds to help organizations transform their neighborhoods by building affordable housing and community facilities. As an intermediary funder, we provide access to capital for organizations that may not otherwise be able to obtain financing. Impact Capital provides loans during the riskiest part of a project predevelopment. These funds can jumpstart a project and lead to future investment from both public and private sources.

Transform COMMUNITY BUILDING PROGRAM

Impact Capital

Neighborhoods are weakening across Washington. As families struggle to keep their jobs and their homes, they also abandon community centers, volunteer organizations, churches, and schools. No longer do parents have the time to participate in school board meetings or the resources for children to play in local sports leagues. As families strive to survive, so do the neighborhood stores that support the neighborhood. With declining public and commercial activity, public safety issues arise. As a by product, fewer business and community leaders lend their voices to champion community safety, advocate for more green space, crusade for community services, and campaign for more neighborhood political representation. A sense of community recedes along with the jobs, families, and homes. Impact Capital knows that a strong commercial corridor and active business and community leaders can keep a neighborhood strong and vibrant. That is why we fund more than just affordable housing. In fact, we provide leadership to spur innovative funding of commercial revitalization efforts in Seattle, White Center, and Spokane. Our work focuses on helping commercial districts thrive, to increase neighborhood identity, decrease crime, and enhance the pedestrian and shopping experience for neighborhood residents and business patrons.

6 Pontedera, A Homesight Project


12th Avenue: Creating a Vibrant Urban Neighborhood In 2008, Impact Capital, in conjunction with its long-time partner the Seattle Office of Economic Development, launched the Neighborhood Commercial District Revitalization Program. The goals of this program are to:

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• Help commercial districts contribute to the positive image and identity of their neighborhood by reducing vacancies and improving the appearance of the district. • Preserve and enhance the economic and cultural diversity of the district. • Strengthen independent and locally-owned businesses within the district.

• Increase civic engagement, by strengthening collaboration between neighborhood organizations and residents. In 2008, with funding through the newly launched Neighborhood Commercial District Revitalization Program, Capitol Hill Housing (CHH) initiated some exciting work along 12th Avenue. The focus area on 12th Avenue, from E John to E Yesler Way, is close to downtown Seattle and contains two vital City of Seattle Urban Village designations. Yet, after 20 years, it has only experienced scattered bursts of change and continues to lack a cohesive plan to transform this area into a vibrant urban neighborhood. Much of the property along 12th Avenue is still vacant or in disrepair. In addition, the neighborhood faces a continual threat of displacement as both residential and commercial rents rise – causing significant concern about the loss of low and moderate income residents, small independently-owned businesses, and arts institutions that have historically called Capitol Hill home.

In 2008, Impact Capital provided a $22,000 grant for the 12th Avenue Initiative. This funding was used as seed money to get the project off the ground – including paying staff to create a map of the district that allowed them to assess current land usage, creating promotional materials for the initiative to help them reach out to community residents and institutions, and to engage in some early feasibility analysis for two vacant sites along 12th. Impact Capital funding has allowed Capitol Hill Housing to dedicate significant staff time to personally talking with local business owners, residents and institutions located along 12th Avenue. These oneon-one relationships have started a valuable dialogue about how ongoing attention and local support can increase the vitality of the 12th Avenue corridor, making it a better home to small businesses and residents.  Additionally, Impact Capital approved a $10,000 Seattle Opportunity Fund Loan that paid for very early-stage feasibility costs related to acquiring two vacant sites along 12th Avenue. Impact Capital also provided trainings for all organizations participating in the commercial district program, including Capitol Hill Housing, to learn about comprehensive commercial district revitalization, commercial leasing strategies, financing commercial and mixed-use projects, and joint ventures with private developers. Through the 12th Avenue Initiative, Capitol Hill Housing has helped increase community participation in monthly 12th Avenue Stewardship Committee meetings, has featured a panel discussion on 12th Avenue issues at its public Annual Meeting in April, and has created the 12th Avenue blog to help inform and encourage discussion about neighborhood issues. 

“Impact Capital has been essential in our work with business owners, residents, and institutional stakeholders along the 12th Avenue Business District. Impact provides us not only with funds to support staff time, but also with technical training, with collaboration sessions with others doing economic development work, and with resources from national experts. In these tough economic times, we’re especially grateful to have Impact Capital on our team.”

Betsy Hunter, Director of Real Estate Development at Capitol Hill Housing

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2008 Report to Investors

Success Stories

• Help neighborhood commercial districts to contribute to the sustainability of the region by enabling residents to meet basic needs locally.

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The Vera Project

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Featured Success Story

Impact Capital

Impact Capital provided $500,000 Capital Campaign Bridge Loan to enable the Vera Project to renovate a large convention hall into a dynamic music and arts venue with a recording studio, print making workshop, art gallery, and meeting space for youth. By engaging participants at all levels of music production and community organizing, Vera strives to fulfill its mission to foster a participatory creative culture through popular music concerts, arts programs, experiential learning and volunteer opportunities for all ages, especially young people. This approach is working, and has spurred several success stories, like Sarina Roscigno of Renton, Washington.

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“I realized I could be doing more than just going to rock shows, like getting involved in a community. Politics wasn’t just a scary idea to me anymore because I realized the importance of getting involved… It made me a better person,” said Sarina, who began volunteering at Vera at age 14, served on the Board of Directors at age 16, held numerous Vera Project internships, and after graduating from the University of Washington, was hired by Vera Project as a development coordinator. “What really attracted me to Vera was that it was my thing, not something my parents wanted me to do or something my high school recommended. I discovered it. And, I wasn’t treated like I was 14. Instead, I was given an opportunity to do things like internships, and work at the door of a show, regardless of my background. I think it’s a pretty unique place in that young people aren’t treated like young people.”

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Giving her the opportunity to take on responsibilities and become involved in a community, really made a difference for Sarina. “If Vera hadn’t been there for me when I started getting involved, I probably would have dropped out of high school. I wasn’t doing so well at the time and I can’t even imagine what would have happened. I made a deal with my parents to keep my grades up so I could continue going to shows and meetings. I guess it was the idea I had something to work on, that was really important.” Impact Capital funds projects that help build communities, like The Vera Project. Impact Capital’s investment created jobs for youth, provided opportunities for young people to engage in arts and music, and established a safe space where kids and young adults can enjoy activities without the pressures of alcohol or drugs.

Volunteers at The Vera Project

Impact Capital’s support has enabled The Vera Project to:

• serve over 40,000 people in the first twenty months after it opened in the new venue funded by Impact Capital; • increase program participation by 50%; • host over 150 all-ages concerts with 1,800 artist and 27,000 patrons participating; • provide volunteer opportunities for over 1500 young people; • enable 27 young people to gain valuable skills through a Vera Project internship; and • engage 52 young adults and teens in governing Vera alongside the Board of Directors.

Vera’s sound engineering program has also helped open doors for many new musical talents. “Once I walked in those doors, I just knew I had to start doing stuff here,” said sound engineering volunteer, Dan Droz. “Vera has lead to every other job I have: a sound engineer for Staging Techniques, freelance audio, and work in other clubs around Seattle. Vera is the example of a foot in the door.” Not only do the skills learned lead to professional positions in the music industry, but it also provides opportunities for community recognition. At age 16, Vera Sound Engineer and Board Member Calla Hummel won a Mary Gates Endowment for Leadership grant. Calla won this recognition for her part in directing the third annual Bend-It!Extravaganza in 2006, an arts festival run for and by queer youth during Pride weekend. Finally, Andrio Abero, a successful, acclaimed screen printer living in Brooklyn, New York, got his start at a Vera Project screen printing workshop. Since then, Mr. Abero has worked for major music festivals and musicians and has won numerous awards for his innovative artwork. Impact Capital’s funding has helped to fill a gap in a community void of youth-focused community activities and a safe, youth-serving performance space. “This has created a permanent space for all ages music in Seattle. For 15 years there was no such thing. The only all-ages shows there would be would be in garages, warehouses -

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After Vera Project’s month to month lease ended, Impact Capital’s funding allowed the Vera Project to continue to move forward and fulfill its mission without stopping services while they raised funds to create their new, dynamic space. “It really allowed us to continue our programming as much as possible by allowing us to get going on construction as fast as possible and open as soon as possible,” explained Mr. Turner. “We spend the better part of 2006 in a little shed, a house in S. Lake Union that was empty, waiting to be torn down.” This temporary space not only lowered staff moral, it also negatively affected programming and took away an important aspect of the Vera Project- the gathering space for youth to engage in art, music, learning, and activism.

“Getting us out of that interim down time as fast as possible was a huge benefit. If we had to take a year and a half or two year break, while we raised the money to start construction, people would have kind of thought, ‘oh, are they still around?’, and it would have effected people’s interest in donating, and it could have really effected the campaign. It could have really snowballed in a negative way. Thanks to Impact Capital’s $500,000 Capital Campaign Bridge Loan, they didn’t have to worry about that. Having the ability to put continuity in the programs really helped.”

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The Vera Proeject

a total fire hazard…and those were the only option…dangerous in rough neighborhoods where no sensible parent would send their fourteen or fifteen year old kid. Vera is a space where there is a level of professionalism…it has created a space, a professional, stable space for all ages music,” said Nick Turner, the Development Director at the Vera Project.

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Nick Turner, Development Director at the Vera Project.

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In fact, the results have been so outstanding that Impact Capital has been asked to consider financing similar community projects in other Washington cities. The Vera Project has also served as an archetype for other cities, like Reno and Spokane, which are trying to re-create this successful youth engagement model. Performance at The Vera Project

2008 Report to Investors

dent Artwork on

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Recording Studio at The Vera Project

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LENDING PROGRAM Impact Capital uses a variety of tools — targeted capital investments, technical assistance, and training — to help community partners realize their vision for their neighborhoods. Our toolbox is varied, to help each developer and neighborhood to create sustainable change. Sustainability’ is now a common catchphrase encompassing topics from environmental concerns to organizational health. Impact Capital views sustainability beyond just providing loans to LEED certified projects; we see sustainable community development addressing the full range of a community’s needs such as housing, health care, education and public safety. In our lending activities we support the development of green projects and we also fund the preservation of existing housing. In 2008 Impact Capital provided loans for the preservation of seven projects totaling 190 units.

Sustain Volunteers at Matthei Place

Impact Capital

COMMUNITY BUILDING PROGRAM

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Our Affordable Housing Preservation Services initiative also focuses on sustainability. Over the past 20 years the community development industry has made tremendous in-roads to addressing the need for affordable housing in Washington State. Despite our successes, the age, diversity, and complexity of our portfolio requires that we bring greater attention to preservation and maintenance efforts needed to keep our existing portfolio affordable, and to keep the project owners sustainable. Impact Capital is taking the lead to provide a central clearinghouse of expertise, training, technical assistance and resources around portfolio evaluation and asset management to focus more attention on the long-term sustainability of affordable housing in Washington State. To assist with the long-term sustainability of the state’s affordable housing, Impact Capital is providing assistance to nonprofits to assess property portfolios and provide technical assistance to both staff and Boards in establishing sound asset and risk management practices.


Matthei Place The Home Depot Foundation awarded Matthei Place’s developers, Kulshan Community Land Trust, with a $25,000 runner-up award at the Fourth Annual Awards of Excellence for Affordable Housing Built Responsibly. Matthei Place is a LEED Silver certified residential community located in Bellingham, Washington. The new affordable home project, which features 14 single-family homes on less than an acre of land, received funding from Impact Capital to turn this innovative pilot project into a vibrant neighborhood. Impact Capital provided Matthei Place with a variety of loans, from project inception all the way through, until the homeowners moved in. Impact Capital

Matthei Place homes are LEED (Leadership In Energy and Environmental Design) certified which means they have fulfilled interrelated standards covering aspects of the development, design, and construction process, including: sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation and design process. Not only are Matthei Place homes environmentally friendly, they are also surprisingly affordable. The average home price for this development was between $140,000 and $180,000, depending on home buyer income and household size. Our goal is to provide capital support that will be a catalyst for building sustainable, affordable housing, just like Matthei Place. In this economy, when underserved communities need more support than ever before, Impact Capital is glad to provide unique funding that creates communities that are energy efficient as well as environmentally sustainable, to benefit the families living there today and for generations to come.

“People like to cite Matthei Place as proof of what’s possible. It makes us all smile, now that it’s filled with happy homeowners. The essential ingredient was Impact Capital’s early vote of confidence, investing in the concept and Kulshan CLT, so together we could invest in permanent affordability.”

Matthei Place, A Kulshan Community Land Trust project.

Matthei Place’s Environmental Sustainability: Energy Efficiency: Estimated to save at least 15% of energy use (and costs) compared to code-built homes.

Waste Minimization: 90% of construction waste was diverted from the landfill, sending just over one pound of waste per square foot (7.39 tons from the project’s 14,412 total square feet) to landfills.

Financing:

Success Stories

provided nearly $800,000 in predevelopment, acquisition and construction financing.

Raised over $1 million in mortgage gap financing, which will allow Matthei Place homes to remain affordable for future generations without the infusion of further subsidy.

Paul Schissler, Executive Director of Kulshan Community Land Trust

Our work with CTED Maintaining a continuum of affordable housing is important to stakeholders like the State of Washington’s Community, Trade, and Economic Development Office (“CTED”). In 2008, CTED utilized their partnership with

Impact Capital to help work with nonprofit organizations that were struggling to maintain their affordable housing properties.

Impact Capital works with the staff to review revenues, expenses, capital needs, financing structures, and subsidies to develop a strategy to position the portfolio for long term sustainability. We also work with nonprofits to approach their public funders with possible strategies for improvement. In addition, Impact Capital assesses an organization’s asset management systems and capacity for asset management. Impact Capital helps organizations learn about performance evaluation, create technical systems to manage their portfolio, and help them adjust from a development focus to an owner’s long-term sustainability focus. CTED also invests in Impact Capital to provide facilitation services to the Housing Development Consortium of Seattle/King County’s Asset & Property Management Affinity Group to help grow the expertise of nonprofit developers and owners regarding asset management in King County. With Impact Capital’s help, this group has developed a best practices toolkit of performance standards and dashboard with a template to create an organization’s own system.

“Impact Capital is uniquely positioned to provide asset management expertise and services for the State and the State’s clients. They have assisted the State in elevating the industry’s attention on asset management and the need to preserve our affordable housing portfolio.” Lisa Vatske Managing Director of the Housing Trust Fund in the Washington State Dept. of Commerce

2008 Report to Investors

Though many organizations are skilled at developing affordable housing in their community, many need help managing complex housing portfolios. That’s where Impact Capital’s expertise can help. We have provided asset management portfolio evaluation services to seven CTED clients to preserve 2202 units of affordable housing in Washington State. The goal of a portfolio evaluation is to provide a complete analysis of a client’s project portfolio, to work with Impact Capital to discuss findings and define possible solutions, and to prepare and present the findings, strategies, and critical roles of the Board and staff in improving the performance of the client’s affordable housing portfolio.

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Impact Capital

Donors / Investors

2008 Donors and Investors Ann Melone

Rick Allen

Bank of America

Seattle Savings Bank

Bank of America Foundation

Snohomish County

Banner Bank

Sterling Savings Bank

Boeing Employees’ Credit Union (BECU)

Sue Taoka

City of Seattle, Office of Economic Development

Summit Leasing

City of Seattle, Office of Housing

Sundquist Foundation

City of Spokane

Susan Duren

City of Tacoma

Susan Shannon

Columbia State Bank

The Annie E. Casey Foundation

Doug and Cathy Prince

The Boeing Company

Fannie Mae

The Erich and Hannah Sachs Foundation

Foster Pepper, PLLC

The Paul G. Allen Family Foundation

Heyward Watson

The Seattle Foundation

HSBC Bank USA

US Bancorp

Jayne Auld

US Bank Foundation

Joseph Brancucci

US Department of Housing and Urban Development

Kantor Taylor Nelson & Boyd PC

Verity Credit Union

KeyBank NA

Washington Community Reinvestment Association (WCRA)

KeyBank Foundation King County Lisa Vatske

Washington State Department of Community, Trade & Economic Development

Living Cities

Washington State Housing Finance Commission

Local Initiatives Support Corporation

Washington State Housing Trust Fund

Margaret Yung

Watson & McDonell, PLLC

Michael Brown

Wells Fargo

National Equity Fund

Yakima Valley Memorial Hospital

Northern Trust Bank Olympia Federal Savings and Loan Association

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Washington Mutual

Randy Robinson

“The Seattle Foundation has been a long-time supporter of Impact Capital. We value the important role they play in the affordable housing and community development arena – not just in Seattle, but around the state. We also believe that by supporting an intermediary like Impact Capital, we can leverage and expand our positive impact on neighborhoods, nonprofit organizations, businesses, and families to improve the quality of life in King County and beyond.” Phyllis Campbell, Seattle Foundation Former CEO

“We saw that Impact Capital had the expertise to make decisions about how institutions could do the most for communities... we were very comfortable with their approach.” Joe Brancucci, Impact Capital Board of Directors, BECU


EXPENSES

TOTAL: $2,441,455

TOTAL: $2,792,818

$446,367

$460,134

$309,724

Contributed Income

Program Contracts

Management & General

$158,860 Fundraising

$660,211 Investment Earnings

$874,743

$2,324,234

Program Interest & Fees

Lending & Community Building

STATEMENT OF ACTIVITIES

STATEMENT OF FINANCIAL POSITION Assets Cash & Investments Loans receivable Accounts receivable & other assets Total Assets

Unrestricted

$19,846,640

Revenues

$2,143,988

$297,467

$2,441,455

$10,563,879

Net assets released from restriction

619,755

(619,755)

0

$2,763,743

(322,288)

$2,441,455

Expenses Change in net assets

$2,792,818 (29,075)

0 (322,288)

$2,792,818 (351,363)

$674,003 $31,084,522

Liabilities & Net Assets Accounts & other payables

$425,659

Temporarily Restricted

Total

Loans payable

$26,700,000

Net assets beginning of the year

$1,318,079

$2,992,147

$4,310,226

Total liabilities

$27,125,659

Net assets 12/31/07

$1,289,004

$2,669,859

$3,958,863

Net Assets Total Liabilities & Net Assets

$3,958,863

Copies of the audited financial statements are available upon request.

$31,084,522

2008 Report to Investors

Financial Highlights

REVENUE

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Board of Directors

Impact Capital

Board of Directors

Impact Capital’s Board of Directors consists of representatives from private and public donors and investors as well as partners from community development and affordable housing organizations across Washington. The Board meets quarterly and members serve on committees that monitor, advise on and oversee Impact Capital’s programs and activities.

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Michael Brown, President Vice President of Community Leadership The Seattle Foundation

Kim Herman Executive Director Washington State Housing Finance Commission

Sue Taoka, Vice President Executive Vice President ShoreBank Enterprise Cascadia Former Executive Director Seattle Chinatown-International District Public Development Authority

Lisa Vatske Managing Director Housing Trust Fund, Washington State Department of Commerce (formerly known as Department of Community, Trade & Economic Development)

Ann Melone, Secretary Vice President Commercial Real Estate US Bank Susan Shannon, Treasurer Director Office of Economic Development for the City of Seattle Jan Laskey Senior Vice President Community Development Lending Bank of America Susan Duren President Washington Community Reinvestment Association (WCRA)

Mario Villanueva Executive Director Catholic Charities Housing Services of Yakima Joe Brancucci Executive Vice President BECU Rick Allen President United Way of Pierce County Loren Dixon Former CRA Officer and Vice President Banner Bank Guillermo Sandoval CRA Officer and Vice President Banner Bank

Judith Olsen Vice President & Community Development Officer Wells Fargo

Randy Robinson VP, Western Region Manager Community Development Lending Key Bank

Jayne Auld Executive Director Spokane Housing Ventures

John Poling Executive Director Grant County Housing Authority

Kurt Creager Former Executive Director Vancouver Housing Authority

Margaret Yung First Vice President & National Manager Washington Mutual Bank

Roy Johnson Executive Director Vancouver Housing Authority

Mariano Diaz Western Regional Vice President Local Initiatives Support Corporation


Julie Terri

Jennifer

Elsa, an avid boxer and marathon runner, ran 1,560 miles last year – farther than running from Bellingham to San Diego!

Ingrid

Heyward spent 2008 supporting others in the community, which is a family affair for him and his wife Joanne.

Michelle

Jessica

Elsa

Jessica got married in 2008. Ever the non-conformist, the Beatles and Dr. Seuss were featured prominently in the program.

Jon

2008 Staff

In 2008, Jon continued his quest to not be caught on camera, ever. Tracy

Heyward Watson, Chief Executive Officer

Julie, mourning the absence of ledger paper, drew her own grids and showed them at Davidson Contemporary Gallery in Seattle.

Administration and Finance Ingrid Martin, Senior Financial Officer Jessica Gimse, Executive Assistant Julie Alexander, Bookkeeper Michelle Yu, Accounting Clerk Community Building Tracy Reich, Senior Program Officer Jennifer LaBrecque, Program Officer

Last year Laurie hugged five costumed characters including an M&M, Elmo, a Lemon, Geoffrey the Giraffe, and Spiderman. “What we do for our kids, eh?” In 2008, Michelle discovered lunchtime yoga at the gym; not just for exercise but to get a break from crunching numbers at work.

Heyward

Other Employees in 2008 Andrea John-Smith*, Fund Development & Communications Officer Chris Jowell*, Program Officer Judi Camasi*, Executive Assistant Keith Freudenberger*, Office Management Specialist Tess Colby*, Chief Program Officer Yolanda Hargraves*, Program Assistant

Laurie

Taking a page from Jimmy Buffett’s “Changes in Latitudes”, in 2008 Tracy relaxed on a beach in San Jose del Cabo, threw dice in Las Vegas, and reconnected with friends at her alma mater in Montana.

2008 Report to Investors

When not working hard, Terri spent most of 2008 playing hard, biking and hiking on the beautiful trails of Eastern Washington.

Lending Jon Clarke, Senior Program Officer Terri Symbol, Program Officer Laurie Olson, Program Officer Elsa Natal, Associate Program Officer

* Staff photo not available.

Jennifer loves to get outside on the weekend, whether it’s a walk around Greenlake or a hike in the Cascades. Her favorite hike last year was Mt. Pilchuck, which she did for the first time.

2008 Staff

Ingrid’s a bit of a homebody who enjoyed 2008 playing games with her daughter and socializing with her co-workers. “Who could ask for anything more?”

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The Northwest Affiliate of Local Initiatives Support Corporation

SEATTLE

Impact Capital

SPOKANE

16

WWW

401 Second Ave. S, Suite 301 Seattle, WA 98104 T 206.587.3200

421 West Riverside Ave. Suite 661 Spokane, WA 99201 T 509.456.8088

impactcapital.org


IC Annual Report 2008