National non-profit lender, donor returns to Cleveland after 15-year absence
A national loan and grant organization that pulled out of Cleveland 15 years ago is returning to the region, with the aim of narrowing the gaps in wealth, work and well-being.
Local Initiatives Support Corp., better known as LISC, quietly began to reestablish its presence here last year by awarding more than $ 1 million in loans and grants to small businesses, community groups and to a redevelopment of housing for the elderly in the city center. Today, the New York-based nonprofit is setting up a local office with $ 3 million in support from the Cleveland Foundation.
At the end of June, the foundation’s board of directors approved a three-year grant to help LISC open this office, hire staff and develop a longer-term strategy. The funding comes after more than two years of discussions about the possibilities of pumping money out of town into everything from neighborhood revitalization to financial advice to workforce development.
LISC, launched in 1979 by the Ford Foundation, acts as an intermediary between funders – banks, private companies, foundations and governments – and people and places in need. The nonprofit organization provides loans, grants, and equity for real estate development and businesses, as well as technical assistance to community development corporations and other organizations.
“I think they bring a lot of national resources that can be harnessed here in Cleveland,” said India Pierce Lee, senior vice president of the Cleveland Foundation who leads the granting and former senior program director of LISC who ran an office here from 1998 to 2004.
The nonprofit first entered Cleveland in 1981 with the support of local foundations and societies. Over the past quarter of a century in the region, LISC has invested more than $ 33 million in affordable housing. The Northeast Ohio office once covered an area of six counties.
LISC quietly closed its doors here in 2006, after Lee changed jobs.
Denise Scott, executive vice president of programs for the association, said she did not know the specific reasons for the decision. But the organization has periodically left markets due to funding issues, lackluster local support, or a feeling that its programs are not making enough of a difference in communities.
“I was always sad every time LISC came out,” said Scott, who oversees the organization’s 37 offices and country programs. “Now that I am sitting in this seat, I am delighted to say that we are returning.”
In the years that followed, the group’s mission extended far beyond affordable housing, job creation, business growth, education, safety and health. LISC, which also provides services in around 2,200 rural areas, invests more than $ 1 billion annually in a wide range of programs.
As a community development finance institution, the association provides debt and equity to real estate developers, small businesses, and other clients who may find it difficult to secure traditional financing. LISC often invests some of the earliest and riskiest funds in a project.
Last year, for example, the association granted a loan of $ 450,000 to the owner of Carter Manor to study the feasibility of renovating the building, a senior housing tower on Prospect Avenue downtown. In May, a Chicago-based developer announced plans to move forward with an $ 18 million renovation of the 270-unit rental property.
Through a trio of affiliates, LISC connects investors and developers on deals involving low-income housing tax credits; uses federal tax credits for new markets to fill funding gaps for projects in struggling communities; and serves as a Small Business Administration lender.
In November, the group announced an initiative called Project 10X, a decade-long initiative to improve the health and wealth of communities of color. So far, the billion dollar effort relies on money from the big tech, retail and finance companies; corporate foundations; and philanthropist MacKenzie Scott, the ex-wife of Amazon founder Jeff Bezos.
The 10X project got its start as discussions about LISC’s return to Cleveland were well underway. But the program’s goals align closely with the Cleveland Foundation’s growing focus on equity, said Keisha Gonzalez, the foundation’s program manager for social impact investing and community development initiatives.
“I think everyone is collectively on this journey of what equity is, what justice is and how it manifests in community development and economic development,” Gonzalez said.
In the short term, LISC is committed to selecting four geographies for investments, said Kevin Jordan, senior vice president who lives in the Cleveland area and represents LISC in the field as the association searches for a local executive director. .
The first two target sites are the adjacent Stockyards and Clark-Fulton neighborhoods on the West Side of Cleveland and the endemic city of East Cleveland.
Cuyahoga County officials brought LISC to East Cleveland, Mayor Brandon King said. The organization is contributing to an nascent master planning process focused on approximately 40 acres near the city’s western border. And the nonprofit is helping the city’s new community development corporation, the Northeast Ohio Alliance for Hope, recruit staff and develop expertise.
“We want to ensure that quality housing and businesses that support quality housing are built in the city, to protect the integrity of current residents and new residents. I think LISC has a great track record in both of these areas, ”King said. “And I think they will play a very important role in ensuring that the development of mixed income is done in a responsible manner.”
It is too early to say how much of a big mark LISC can make in Cleveland.
Tania Menesse, CEO of the nonprofit Cleveland Neighborhood Progress, said she was encouraged by the work LISC did last year, during the worst of the pandemic, to support small businesses through through grants to community development corporations and through the federal paycheck protection program.
Most of the direct loans or grants have gone to minority-owned or female-owned businesses with fewer than 10 employees, Scott said.
“We are a growing market,” Menesse said. “We need all the resources we can get.”