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Jacobs Center for Neighborhood Innovation 5160 Federal Blvd. • San Diego, CA 92105 (619) 527-6161 • www.JacobsFamilyFoundation.org January 2008

The Village at Market Creek How the NMTC Program Is Financing Community Change

The Vision Began with Market Creek Plaza The Diamond Neighborhoods of southeastern San Diego are among the most culturallydiverse communities in the nation. Located just minutes from San Diego’s thriving downtown area, these neighborhoods have endured decades of disinvestment and urban flight, leaving a once vibrant, connected community with the typical ills of urban core communities. The very definition of blight — an abandoned brown field surrounded by barbed wire — once could be found in the middle of these communities.

The Village Housing As part of the planning process for Village housing, a Housing Excellence Team was formed in 2005 to work with Jacobs staff to assess housing needs in the surrounding communities, research affordable housing models, and develop a housing strategy. The community team included resident homeowners and renters, for-profit and non-profit developers, and affordable housing experts. This team developed the vision and key strategies for the housing component of The Village. Trolley Residential represents the pilot phase of the larger Village Housing Program that includes the building of 800 housing units. Trolley Residential will include 42 homes on three floors with underground parking. Qualified candidates must have lived or worked in the community since 2000 and have a demonstrated commitment to community service. The pilot housing units will be designed to be affordable for those with the neighborhood median income of $35,000, which is half that of the broader San Diego region. The targeted cost per unit is $180,000, and the goal is to keep the homes affordable over time. New Markets Tax Credit financing is a critical element in bringing the cost of financing down in order to achieve those goals.

First Housing Project — Trolley Residential Number of Condominium Units Size of Units Number of Residents Involved in Design Teams Number of Residents Who Have Completed Homebuyer Readiness Training Targeted Cost for Homebuyers Average Income of Potential Residents Estimated Construction Jobs Estimated Long-Term Jobs

Projected Development Cost Financing Goals for Project -NMTC Loan -Program-Related Investments

42 (1, 2, and 3 bedrooms) 650-1,100 sq. ft. 240 40 $180,000 $35,000 225 4

$17,800,000 $10,700,000 $7,100,000

run by the residents of the very community it serves. Both groups have already received dividends from their investment, building on individual and community wealth. JCNI, who owns the remaining shares, hopes to ultimately transfer full ownership to the community as soon as 2012. Underlying the success of Market Creek Plaza is the New Markets Tax Credit (NMTC) Program. This key federal program continues to attract private sector capital investment into the Plaza to help finance community development projects, stimulate economic growth, and create jobs. A $15-million NMTC loan, made by Clearinghouse CDFI through an investment by Wells Fargo Bank, has helped keep the cost of money for development low, keeping more money in the community and freeing foundation funds to support more community development work. The NMTC Program has literally made resident ownership of the Plaza possible. Program-related investments from other foundations provided another layer of funding at below-market rates to help finance the project.

As the result of a unique partnership between the residents of the Diamond Neighborhoods and the Jacobs Family Foundation (JFF) and Jacobs Center for Neighborhood Innovation (JCNI), this once abandoned site has been transformed into a thriving commercial and cultural center known as Market Creek Plaza. The Plaza was planned, designed, built, leased, and is now Market Creek Plaza 2006 Key Social and Economic Indicators owned and operated by community residents. In 2006, Market Creek Plaza recaptured $34,200,000 (40% increase over 2005) $34.2 million in economic leakage from this 2006 Economic Activity once underserved community. 2006 Sales per Square Foot

Market Creek Plaza provides essential goods and services requested by residents, an influx of new jobs, and is becoming known as San Diego’s “place-to-be” for multicultural arts and entertainment. Through the nation’s first Community-Development Initial Public Offering, 20% ownership of the Plaza was transferred to a group of 416 community investors. Qualified investors have a demonstrated commitment to the community and live, work, or volunteer in the Diamond. Another 20% of the Plaza is owned by the Neighborhood Unity Foundation, a unique community foundation planned and

Business Occupancy Number of Jobs

$457 (25% higher than similar retail centers) 8 Local Tenants / 4 National Tenants 196

Percentage of Minority Employees

86%

Percentage of Construction Contracts to Minority- and Women-Owned Businesses

78%

Estimated Attendance to Date at Community Events/Activities Total Development Cost Permanent Financing: NMTC Loan Program-Related Investments Community Investment: -Diamond Community Investors -Neighborhood Unity Foundation

55,000 $23,600,000 $15,000,000 $7,600,000 $500,000 $500,000


The Village Gathering Place

The Village at Market Creek Current Acres of Development

45

Acres Needed to Achieve Scale

63

Retail/Commercial Square Footage

The Vision Grew to a Village

350,000

New Jobs to be Created

800

Number of New Homes to be Created

800

Total Investment to Complete Existing Plan

The heart of The Village at Market Creek is just across the creek from Market Creek Plaza. Construction is nearing completion on the Joe & Vi Jacobs Center, the next phase of physical development within The Village. The three-story, 75,000square-foot community center will serve as a central resource for The Village with its meeting and conference facilities, performance venues and cultural training kitchen, multicultural art galleries and office space. It will be a gathering place where conversations that shape the future of this community take place. It will also become a “learning institute” where organizations and individuals across the nation come to learn and share in the areas of community building, community development, asset building, and more. It will bring some of San Diego’s abundant tourism and convention business into this community, and it will build the capacity of residents with a licensed commercial kitchen and culinary academy that will serve individuals, families,

$500 million

The physical development that began with $1 billion Total Investment to Bring Project to Scale Market Creek Plaza is now fueling a community renaissance. When residents saw the power of creating a vision of change together and Long-term success for The Village lies in community partnering to make change happen, a team of residents went ownership of the plans, processes, and assets of community to work creating a larger, more comprehensive community change, as well as the area’s connection socially and development plan called The Village at Market Creek. Over the economically to the robust San Diego region. Applying the next 10 to 15 years, this resident-planned village will transform discipline of the marketplace to the social mission of the approximately 63 untended, unused, or under-utilized acres non-profit world, The Village at Market Creek creates unique into a thriving area with 800 new homes, 350,000 square feet of approaches to community change and innovative structures commercial and industrial development, 800 new jobs, and a for sustainability. Creative funding streams and policy tools, network of integrated community services. like NMTC financing, are needed in order to both build on the innovations achieved to date within The Village, as well as The Village will become a dynamic “live-work-play” facilitate the journey toward ownership in other communities. environment in which culture, commerce, and community are At present, plans for The Village will attract $500 million in new celebrated. The area includes rich community resources that investment into this formerly underserved community. bring people together and build individual capacity through To bring the project to scale for the purpose of arts, education, youth development, and civic engagement. sustainability, total investment may reach $1 billion. The Village will be connected through its unique architectural character, as well as bike and pedestrian pathways, parks and playgrounds, cultural art, and access to public transit.

The Joe & Vi Jacobs Center Estimated Completion Date Business Occupancy Projected Number of Jobs

micro-entrepreneurs, and small businesses with a host of programs. Upon completion next year, the Joe & Vi Jacobs Center is expected to generate over 150 new jobs, with the goal of more than 70% of those jobs being held by local community residents. Construction of the Joe & Vi Jacobs Center has been funded by a $15-million NMTC investment from Clearinghouse CDFI through an investment by U.S. Bank and Washington Mutual. A lead gift of $5 million from the Jacobs Family Foundation equipped the building’s infrastructure. Both investments are being leveraged to raise additional funds from private sources to fully equip the meeting and conference center’s audio/visual capabilities and to add solar panels to fuel the building. As with all of the assets in The Village at Market Creek, resident ownership of the Joe & Vi Jacobs Center is the ultimate goal. Keeping down the cost January 2009 of funding the project is essential in 6-10 Local Tenants meeting this goal. 150

Goal for Percentage of Employees from Southeastern San Diego Zip Codes

73%

Percentage of Construction Contracts to Minority- and Women-Owned Businesses

71%

Estimated Annual Participants in Cultural Culinary Academy Programs

500

Development Cost to Date

$18,300,000

Projected Costs at Completion

$24,300,000 $15,000,000 $ 5,000,000 $ 4,300,000

Permanent Financing: NMTC Loan Jacobs Family Foundation Grant Goal for Additional Private Investment

How the New Markets Tax Credit Program is Financing Community Change  

Community Development Financial Institution - The Village At Market Creek

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