Multifamily Finance — Project Spotlights

Capital One Helps SF LGBT Center Revitalize Its Home

Thirteen years after it first opened, it was clear to everyone who entered the SF LGBT Center that it needed to be updated and reconfigured to better serve the local community. The problem was how to finance the renovation. Capital One, working in partnership with the Northern California Community Loan Fund, developed a package that allowed the center to proceed with its plans. In addition to a New Markets Tax Credit equity investment, Capital One provided a senior loan and a bridge loan.

The Challenge

It was time for a renovation. Located at 1800 Market Street, the SF LGBT Center had been providing a comprehensive array of direct services and community development programs for low-to-moderate-income individuals and families since 2002. Although its building—which combines a modern steel structure with a Queen Anne-style Victorian—won the 2004 SF AIA Design Award for Excellence, it no longer met the evolving needs of the local community.

After surveying founders, donors, and community partners, the center directors developed a three-point plan for the renovation:

  • Triple the amount of affordable nonprofit office space available, welcoming new partner tenants and adding primary medical care, mental health, substance abuse, and legal services to the Center’s existing programs.
  • Transform the lobby to make it more inviting, create new community meeting spaces, and upgrade the Rainbow Room, the center’s largest multipurpose event space.
  • Promote long-term sustainability by designing a more efficient floor plan that allows the building to pay for itself and the center to establish a capital reserve fund to support future building needs.

“This is an opportunity to make the Center an even stronger resource for the community and gives us the ability to expand critical services to the entire community," Rebecca Rolfe, the Center’s Executive Director, told the Bay Area Reporter in 2015.

But getting the finances right was as important to the Center’s future as the design. With its tight budget, the center needed to minimize its carrying costs.

The Solution

To meet these requirements, Capital One partnered with the Northern California Community Loan Fund (NCCLF) to provide $10.3 million to fund the renovation. A critical part of the financing could come from a New Markets Tax Credit (NMTC) equity investment. The purpose of the NMTC program is to spur the revitalization of low-income communities by attracting private capital to these areas.

To receive a NMTC, individual and corporate investors invest in community development entities (CDEs), organizations that work to ensure the sustainability of community-based nonprofits in low-income communities by providing flexible financing for their projects. In return, the investors can claim a tax credit worth 39 percent of their original CDE equity stake, which they receive over a seven-year period.

Because investors receive a revenue stream from the tax credit, the CDE can offer below-market-rate loans to the community nonprofits it supports. Interest payments on this loan will also be passed to the investors.

The financing package included a $3 million NMTC allocation from the Capital One Community Renewal Fund, a CDE, while NCCLF, also a CDE, provided a $7.5 million NMTC allocation. “NCCLF was thrilled to partner with Capital One in support of this project,” said Ross Culverwell, NCCLF’s chief lending officer.

Capital One also provided a $4.4 million senior loan, and a $1 million loan to bridge the timing of the tax credit. In addition, Capital One Community Finance made a $163,000 term loan directly to the Center. Then beyond that, the company provided a grant towards operations. “Because we recognize the importance of this center and its mission to the San Francisco community, we wanted to do everything we could to make this happen.” said Laura Bailey, senior vice president, Community Finance, at Capital One."

Capital One’s Community Finance team took the lead in the transaction, with involvement from the Public Finance, Middle Market NMTC Originations, Global Tax and Community Affairs teams at the Bank. “This was a great example of multiple Capital One teams working together to achieve a client’s very specific goals,” Bailey said. “Despite many moving parts, we were able to successfully close and underwrite the transaction in a short time-frame.”

The renovation, begun in March 2016, took a year, but even before the finishing touches were complete, the renovations had already begun to make a difference. Nonprofits such as Bay Area Legal Aid, the Asian & Pacific Islander Wellness Center, and AGUILAS had taken up residence and were serving the community. The center is holding an official ribbon-cutting ceremony in April 2017.

“The support Capital One and NCCLF provided the Center during this transformative time for us has been invaluable,” said Rolfe. “Thanks to their help, our continuing work of providing a safe and supportive environment for all LGBTQ people and their allies is entering a new exciting phase.”


“We had a very short time-frame within which to secure financing for our acquisition. Capital One Multifamily assured us they could do it—and they delivered.”

Ronald Charvet, Senior Vice President for Asset Management at Lerner


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