Renovations Have Effects Throughout a Community
Internal Teamwork Helps Fund Renovations to One Non-Profit’s Space, With Ripple Effects Throughout a Community
September 12, 2019
San Francisco’s SF LGBT Center is not just a place that provides safe haven for those in the LGBT community—it helps them thrive. As the only non-profit in the city focused on serving the needs of those who identify as members of the LGBT community, it is a gathering place that offers career counseling and job fairs and gives clients access to computers, meals, mentorships, and more. As a result, it is well-known throughout the Bay Area.
Over time, as the needs of the community grew and as the organization looked to respond thoughtfully, its leaders realized that their current space would require changes to enable them to continue to deliver on their mission. And, additional programming and building renovations required funding that they didn’t quite have line of site to receiving.
As a part of Capital One’s focus on diversity and inclusion, the company has a long history of being a supporter of the LGBTQ community. Associates in the Bay Area also have long been impressed with the SF LGBT Center’s work. So when the Center was looking for assistance funding critical renovations to its building, Capital One was eager to step in and work with the organization’s leadership team to identify ways to help.
All of this is allowing for much-needed rehabilitation work on the building and some much-wanted redesign, but it’s the tripling in size that is most important for the SF LGBT Center. While some of that space will be used directly by the Center, a significant portion of it will be rented out by Bay Area non-profits that also serve portions of the LGBTQ community.
To enable renovations to the current space and to meet the goal of tripling the available square footage of rentable space, Capital One arranged for a total of $10.3 million in financing. The funding was broken into New Market Tax Credits (NMTC) equity investments, a $4.4 million senior loan, and a $1 million bridge loan. The Capital One team also arranged a $3 million NMTC allocation from Capital One Community Renewal Fund and the Capital One Community Finance team provided a $163,000 term loan directly to the Center.
Organizing and executing the financing required the collaboration of several teams at Capital One in addition to Community Finance, which took the lead. The Public Finance, Middle Market NMTC Originations, Global Tax and Community Affairs teams at Capital One also took prominent roles.
This was a great example of multiple Capital One teams working together to achieve a client’s very specific and complex goals.
“Despite many moving parts, we were able to successfully close and underwrite it in a short time frame. Because we recognize the importance of this Center and its mission to the San Francisco community, we also provided philanthropic support for operations and a conventional loan to fund the renovations,” said said Laura Bailey, senior vice president, Capital One Community Finance.
With renovations nearly completed, the Center is already home to additional non-profits, including Bay Area Legal Aid, the Asian & Pacific Islander Wellness Center, and AGUILAS.
The renovations have been such a success that even before the Center’s official opening, there’s no more space to rent. “We’re at 100 percent capacity with the final tenant being the City of San Francisco, which is taking over the café space and will be housing the office for the Transgender Community Liaison,” explained Alberto Lammers, the Center’s Director of Communications. Lammers added that the Center’s largest tenant, Bay Area Legal Aid, was in the process of moving into the third floor of the building, and that AGUILAS, the largest Gay Latino Organization in the San Francisco Bay Area, had already moved into space on the fourth floor.
It’s a symbiotic arrangement. The non-profits all provide different services, but they are all supportive of one another’s missions. And while the rent money helps fund the SF LGBT Center’s operations, it also is providing something sorely needed by other San Francisco non-profits: quality space at affordable prices.
“This organization has been around for about 20 years,” explained Erick Arguello, Program Coordinator of AGUILAS. “And we have moved about five times. We know what the rents are out there: extremely high. So what they offer here for these non-profits is a tremendous, tremendous help, and it creates a lot of security for us. What we pay here is very little compared to what we’re seeing out there for the same square footage. It’s just unbelievable. We’d probably be paying double or triple.”
The SF LGBT Center has been well-aware of the soaring rents around the city. Some businesses have the profit margins to absorb these rising costs. But for many non-profits, escalating rents can be an insurmountable burden. “It’s very important that we keep non-profit partners here in San Francisco,” said Lammers. “The affordability crisis has been driving a lot of people out of the area to places where potential clients may be hard to reach. We want to keep the services where the clients are, here in the city of San Francisco.”
Renting space at the Center provides another benefit, one enjoyed by the clients of these non-profits, many of whom seek the services of more than just one organization. Lammers elaborates, “We see a lot of synergy between all of our tenants. Bay Area Legal Aid is a non-profit legal firm. API Wellness is also a non-profit that works a lot with the LGBT community. AGUILAS is an HIV-prevention group that works with the Hispanic community. So they all work together well. And our referral programs all work together well because one client can go from one place to the other quite easily.” He adds with a chuckle: “They don’t even have to go outside [the building].”