Ecotrust to put $45 million in New Markets Tax Credits toward jobs, innovation

Apr 262013
 

Just days after the public launch of a successful New Markets Tax Credit-supported project, Ecotrust has learned that its subsidiary, Ecotrust CDE, was awarded $45 million of additional New Markets Tax Credit allocation. Ecotrust will put the new federal financing toward innovative initiatives that create economic, social and environmental benefit in rural and disadvantaged communities in the Northwest and beyond.

Ecotrust used past allocations of New Markets Tax Credits to support the Bullitt Center, the world’s leading-edge commercial green building, which opened on April 22, 2013. The 50,000-square-foot building, which continues renewal at the edge of Seattle’s Central and Capitol Hill Districts, will generate all of its own energy and use a rainwater filtering system to meet all of its water needs. Construction created 160 jobs and invested $30 million into the region’s economy.

The Bullitt Center under construction last year. Photo by John Stamets.

The Bullitt Center under construction late last year. Photo by John Stamets.

“The Bullitt Center is the latest example of how Ecotrust uses New Markets Tax Credits and other forms of capital to push environmental and social innovation while creating jobs and successful new business models,” says Spencer Beebe, chairman of Ecotrust.

Ecotrust’s latest allocation is part of $3.5 billion in New Markets Tax Credit awards to 85 organizations nationwide by the Treasury Department. This money is to be invested in creating and protecting jobs in disadvantaged and distressed communities.

This is the fourth allocation of New Markets Tax Credits that Ecotrust CDE has received since 2003.

Senator Jeff Merkley (D-Oregon) celebrated the news. “This is great news for Ecotrust and the entire Northwest,” said Merkley. “Ecotrust has been an incredible partner to Oregon’s rural communities, supporting economic development in environmentally sustainable industries ranging from forest products to clean energy. I look forward to seeing this new funding turn into jobs and economic activity across Oregon.”

Washington Governor Jay Inslee said:  “Wood products is a backbone, legacy industry in the Northwest. This support for innovation in green building will help spur new jobs in distressed rural communities with deep roots in the forestry sector. I applaud this opportunity to leverage public and private funding to support cutting-edge projects and ignite sustainable economic growth.”

Past Ecotrust allocations, totaling $122 million, have supported clean energy projects, a new model of timberland management, and forest products innovation, including:

  • Ochoco Lumber Company, which refinanced and stabilized the last remaining mill in John Day, Oregon and included the construction of a new pellet fuel facility.
  • Chobani, Inc, formerly Agro-Farma, Inc, to renovate and upgrade its yogurt manufacturing facility located in an economically distressed county of New York, and to finance the installation of a biogas plant to convert wastes from the yogurt production process into energy.
  • Ecotrust Forest Management<http://www.ecotrustforests.com/>, to support the purchase of 12,500 acres of timberland in Washington and Oregon and the conversion of the land to Forest Stewardship Council-certified  management, for multiple outcomes of timber, jobs, carbon sequestration, clean water and wildlife habitat.

Ecotrust CDE plans to use some of the latest NMTC allocations to support innovative new projects across the Northwest, including Northwest tribal governments’ re-acquisition of traditional lands.

“This allocation will provide critical financing for businesses and organizations in rural communities across the Pacific Northwest,” says Bettina von Hagen, Managing Director of Investments and Community Engagement of Ecotrust CDE. “We have a very exciting pipeline of projects, which includes the conversion of an abandoned retail space into a state-of-the-art manufacturing facility, and the rejuvenation of shuttered facilities, including a paper mill, a sawmill and a biomass plant that will generate hundreds of family-wage jobs in highly distressed communities. We are particularly excited about the opportunity to work with tribes on land repatriation and the launch of related tribal forest processing businesses.”

Through Ecotrust CDE, Ecotrust uses New Markets Tax Credits as one tool in a wider strategy of impact investing to improve social, environmental and economic conditions up and down the West Coast. Over the last twenty years, Ecotrust has turned $30 million in grants and program- and mission-related investments into $800 million in assets at work throughout the region. Learn more about Ecotrust’s impact investing approach and history here.

The New Markets Tax Credit program, established by Congress in December 2000, permits corporate taxpayers to receive a credit against federal income taxes for making equity investments in vehicles known as Community Development Entities, or CDEs. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. For every dollar invested by the federal government, the NMTC Program generates over eight dollars in private investment. President Obama’s FY14 budget included an expansion and permanent extension of the New Markets Tax Credit.

In the latest funding cycle, 282 CDEs applied for allocations, requesting a total of approximately $21.9 billion in allocations.

  • Allocation awards totaled $3.5 billion, or about 16 percent of the total amount requested by applicants.
  • Thirty percent of the total applicant pool – 85 CDEs – were awarded allocations.
  • Allocation awards range in size from $15 million to $80 million. The median allocation amount was $40 million and the average allocation amount was about $41.2 million.

More on this year’s awards and the New Markets Tax Credits program is here

Urban Farming grows up

Feb 112013
 

Until the recent growth in the popularity of urban farming, it’s unlikely that growing food on a vacant lot in the middle of an American city would be considered a serious urban planning proposal. But at a recent community meeting in Northeast Portland, City Commissioner Nick Fish was pushing for just that – an urban farm on the site of a former elementary school nearby. The food would feed into Portland Public Schools’ Farm to School program – supported by Ecotrust – which currently sources over 30% of its ingredients from local farms and food producers.

It’s a clear sign that urban agriculture has grown up. In the last decade, farming the city blocks has gone from being a fringe movement practiced guerrilla-style by hardy and rebellious post-industrial pioneers to an increasingly widely accepted urban land-use and job creation strategy. In Rust Belt cities, full of unemployed residents and unused land, urban farms and gardens have taken off. The Reimagining Cleveland project provides public and philanthropic funding to community groups to reclaim vacant lots for community gardens, orchards, market gardens and pocket parks. In Detroit, training programs such as Urban Roots and Earthworks Agriculture Training (EAT) train new generations of urban farmers and community gardeners. But urban farming’s influence extends far beyond the Rust Belt. In Seattle, for example, it’s become an increasingly popular way to source local food, with a diversity of models that range from urban CSAs to neighborhood garden and orchards called P-Patches. They’re even doing it in the nation’s capital.

Trainees planting at Earthworks Urban Farm, Detroit. Photo by Sam Beebe

Trainees planting at Earthworks Urban Farm, Detroit.
Photo by Sam Beebe

Why does urban agriculture make sense for policy makers? Let’s look at the northeast Portland proposal. It could increase the supply of fresh food for local public schools, where 85% of the schoolchildren in the community are on free or reduced price lunches. It could provide another food source for food banks and soup kitchens, and provide workforce training to aspiring local farmers and urban gardeners. The project has partnered with the Oregon State Beginning Urban Farmer Apprenticeship (BUFA) program, and made scholarships available to local residents from the Cully and Concordia neighborhoods. The farm could also supply food to Portland Parks and Recreation’s Summer Free for All program, which offered over 99,000 free lunches to children in 2012.

The proposed division of the site into separate parcels reflects the diverse group stakeholders interested in getting involved. Half of the garden plots, totaling three acres, will be managed by Oregon State (OSU) Extension and planned in coordination with Portland Public Schools. One acre will serve as a community learning garden, and the remaining two acres will be reserved for pilot projects led by different community groups. Though more top-down than Detroit’s lean and mean outfits such as Brother Nature Produce, this multi-stakeholder model promises greater stability and security than a guerrilla operation – but it also requires greater community deliberation (now underway) to ensure that the city incorporates all voices in the process.

Not everyone is convinced that urban farming is the best use of land. Clarence Larkins Sr. lives across the street from the proposed Northeast Portland farm. The founder and CEO of Straight Path Inc., a local mentoring and employment training program, he sounds a note of pessimism about the depth and diversity of community members’ participation, particularly the neighborhood children’s attitude towards the project. “These are city kids – they won’t be interested in farming,” he predicts. Rather, he argues that a community center oriented towards families with children would provide a service that the entire neighborhood could use for its benefit.

But with an increasing number of inner-city residents taking up farming (such as in Detroit and Cleveland), and growing evidence of multiple benefits at different scales, the Whitaker Farm Project has built up real momentum – as have numerous other urban farm projects across the country. As a viable urban land-use strategy, urban farming has arrived.

Beyond the bank: funding entrepreneurs and the recovery

Nov 072012
 

By Terry Brandt

A lot is being written about how to best lay the foundation for our country’s economic recovery. There seems to be little consensus  on whether we should borrow capital, which increases our national debt on the promise of stimulating the economy through increased spending, or if we should shrink the size of government to reduce the national debt and reduce taxes to preserve our next generation’s future.

Somewhat lost in the national dialogue is how communities must independently find ways to resolve problems of high unemployment that hinder local recovery.

That’s because neither the federal government nor traditional banks are underwriting local recovery as they should. In 2008, the federal government committed to spend $475 billion (TARP funds) to primarily stabilize the balance sheets of troubled banks that had been hit with widespread loan foreclosures. Fast forward to 2012: nearly four years later, in response to unprecedented customer deposits and large amounts of cash, these rescued and profitable banks have established large advertising campaigns directed at lending to small businesses.

Due to the low cost of funds, banks can now provide low interest rates and they say they are aggressively making small business loans. However, pressures from FDIC examiners, high credit score requirements, and demands for increased collateral have squeezed the number of qualified businesses into a very small pool.

Vital small businesses needing relatively small amounts of capital are lured by promises of a loan only to be worn out and turned away. What can be done to help these small local businesses that may represent one of the best paths to our economic recovery?

With enough capital, small businesses can spur job growth, says Albina Opportunities Corporation’s Terry Brandt. Photo courtesy of AOC.

Here’s how we might tackle things in Oregon.

The results of a newly completed study, Oregon Capital Scan,  commissioned by the State Treasurer’s Office, Business Oregon, the Oregon Community Foundation, and Meyer Memorial Trust were released this summer. Its primary goal was to identify gaps in Oregon’s capital ecosystems. It also offered recommendations of how investments could be made using an “Oregon Portfolio” investment conduit using intermediaries to target specific gaps in capital around the state.

In my opinion, significant to the success of this strategy is to find ways to operate between more stringent bank lending practices and the large public give-away stimulus packages. Currently non-bank microlenders have done a good job of trying to fill this demand for very small business entrepreneurs. However, there are large gaps in capital above what microlending can provide.

As stated in the OCS report, there is a need for an intermediary non-bank lending platform that is designed to be both innovative and agile. I believe that it must also possess a deep connection with the local community to understand how to best leverage scarce public and private resources in the most efficient ways possible. There must be accountability in the process, and its outcomes, including job production, must be measurable indicators of success. 

Our limited resources must be invested with just the right dose of risk tailored to satisfy both the financial and mentoring needs of existing small businesses. The intermediary lender must be personable, proactive, and an advocate for the success of small business borrowers.

It must think like small businesses and take time to understand the needs of its clients to provide tailor-made business advisory services to assist them to be successful. It must be transparent – no hidden fees, it must be upfront about its process, and it must be honest with what can and cannot be done. Perhaps most importantly, it must have a belief that strong local communities shaped by successful small businesses will be the rising tide that lifts all boats.

At this time, there is a large pipeline of qualified loan requests in Oregon and around the country that cannot be funded due to a lack of lending capital. These businesses represent the growing marginalized ring just outside the small lending pool referenced earlier. Yes, they have suffered reduced credit scores and yes, their assets have been eroded as the result of the recent financial collapse not seen in recent memory. And they may be higher-risk bets than those in the small-risk pool. However, like large banks that received TARP funds, they also need help to repair their balance sheets. Even without government subsidy, through their perseverance and hard work, they have survived and their cash flows have returned. But in order for them to again grow and hire more people, they must have access to capital.

At Albina Oportunities Corporation, we have assumed a role in finding innovative ways to cost-effectively and efficiently work to kick-start our local recovery, beyond traditional bank lending. We have seen that one job is retained or created for every $4,130 of loan funds we disburse, and we’ve seen no loan losses while substantially increasing living-wage jobs in the community. More importantly, we’ve established a lending platform that addresses the capital needs of local small businesses not fulfilled through traditional lending resources. In fact, every AOC loan has gone to a small business that has been rejected by a bank.

Our work has only begun to address the demand for our loans and need for our advisory services. It will take further capital investments in our lending model to continue this necessary work. Without this additional support, our initiative and others like it will only scratch the surface of providing access to capital by qualified local small businesses.

Terry Brandt is executive director of Albina Opportunities Corporation.

November 12 to 18 is Global Entrepreneurship Week, and Ecotrust and Portland, OR are getting a running start on the festivities, with a focus on social entrepreneurship. We’ll be hosting events at Ecotrust, talking about others around town and curating some extra discussion around social enterprise. How are you @unleashingideas during #GEW? See you on Twitter.

 

At PNCA: Gregory Dees, social entrepreneurship guru

Nov 052012
 

Photo: Fuqua Business School, Duke University

November 12 to 18 is Global Entrepreneurship Week, and Ecotrust and Portland, OR are getting a running start on the festivities, with a focus on social entrepreneurship. We’ll be hosting events at Ecotrust, talking about others around town and curating some extra discussion around social enterprise. How are you @unleashingideas during #GEW? See you on Twitter.

Pacific Northwest College of Art and Portland State University’s Impact Entrepreneurs will serve as hosts to Professor J. Gregory Dees when he visits Portland November 9th to present “The Open Solutions Society: Taking Social Entrepreneurship Seriously.” Professor Dees is the Co-founder of the Duke Center for the Advancement of Social Entrepreneurship and an Impact Entrepreneurs Advisory Board Member. He is widely recognized as the “father of social entrepreneurship.”

In 2007, the Aspen Institute and Ashoka recognized his pioneering work with their first Lifetime Achievement award in Social Entrepreneurship Education. An earlier Aspen report described him as “the father of social entrepreneurship as an academic field.”

He has produced more than 60 cases, articles, chapters, and concept notes related to this topic, as well as editing two books with Jed Emerson and Peter Economy: Enterprising Nonprofits (Wiley, 2001) and Strategic Tools for Social Entrepreneurs (Wiley, 2002). His work bridges the gap between business and the social sector, and between theory and practice, making knowledge useful for social entrepreneurs, as well as the funders, consultants, and educators who work in this field. He has also published in the Harvard Business Review, Stanford Social Innovation Review, Innovations, and Society.

Prior to his academic career, Professor Dees was a management consultant with McKinsey & Company. He holds a PhD in philosophy from The Johns Hopkins University, a Masters in Public and Private Management from Yale, and a BA with high honors in philosophy from the University of Cincinnati, where he received a 2007 James C. Kautz Alumni Master Award.

“Professor Dees is world renowned for his contributions to the field of social entrepreneurship, and we are fortunate to count him as a friend and adviser to Portland State’s Impact Entrepreneurs,” said Cindy Cooper, Impact Entrepreneurs Co-Founder and Director. “We are thrilled that he has chosen Portland as a first stop to present his latest research from his upcoming book.”

The talk will be held at the PNCA Swigert Commons (1241 NW Johnson St.).

The event is free and open to the public.

Tompkins Conservation strives for biodiversity in South America

Oct 222012
 

Doug Tompkins founded The North Face. Kris Tompkins served as a long-time CEO of Patagonia. It seems as likely a pairing as any.

Now that the two have left the outdoor gear industry, they’ve dedicated themselves to a plethora of conservation efforts in South America. And those are all featured at a new, content-rich hub: Tompkins Conservation.

Kris and Doug Tompkins are working for a new economy.
Photo: Tompkins Conservation website.

Tompkins Conservation initiatives range across a wide spectrum, from park creation to restoration, ecological agriculture to pure activism. All of it is meant to shift the globalized economy towards many place-based, local economies that reflect balanced relationships between humans and nature.

Create

In 1991, Doug purchased the Reñihué Ranch in Chile, with the intention of setting aside 42,000 protected acres. This conservation effort grew over several years into the creation of Pumalín Park, a public-access 800,000-acre nature reserve.

In 2000, Kris founded Conservacion Patagonica, which is working to create Patagonia National Park and has purchased 200,000 acres in the Chacabuco Valley.

South America’s Patagonia is one of the last wild places on earth.
Photo: Conservacion Patagonica.

The Tompkins’ Conservation Land Trust, in partnership with American philanthropist Peter Buckley, purchased 208,000 acres along the Chilean coast, south of Chaiten, in 1994. The parcel expanded and by January 2005 it became the largest privately-owned land to be donated to Chile’s National Park System. Along with surrounding territory, President Ricardo Lagos designated the wilderness as Corcovado National Park. It is currently Chile’s 6th largest park at approximately 726,000 acres, and contains 86 lakes.

Conservation Land Trust has also been working on a proposed Great Iberá Park in Argentina, which would link multiple reserves together to support the region’s ecological integrity. The area abounds with ecotourism opportunities to ensure sound economic gains for the local population.

This map indicates protected areas from Tompkins Conservation efforts.
To learn more about each region, visit the “All Protected Areas” tab of their website.

Restore

Tompkins Conservation identifies the loss of biodiversity as the greatest crisis of our time and emphasizes its undermining of the planet’s ecological health. To tackle these issues, Doug and Kris’ programs have been involved with numerous species and plant restoration projects such as reintroducing locally extinct fauna like the giant anteater, the tapir, the collared peccary, the pampas deer, the ocelote, the giant otter, and the jaguar within the proposed Great Iberá Park.

The Conservation Land Trust is working to reintroduce jaguars within the proposed Great Iberá Park.
Photo: Iberá Project website.

Grow

Other environmental concerns for Tompkins Conservation include the need for pure water, soil care, and investment in local, renewable energy. Agricultural programs in Chile and Argentina involve raising sheep and cattle, producing native forest honey, and growing fruit and vegetables for local consumption.

Act

Along with writer/activist Jerry Mander, Doug established The Foundation for Deep Ecology in 1990, which is based in Sausalito, California, and supports education and advocacy for the natural world through campaigns, publications, and grants.

The Tompkins stress that beauty is intrinsic to our understanding of the natural world. Through recognizing the beauty of natural landscapes, well-designed buildings within parks and communities can be aesthetically pleasing, ecologically responsible and continually inspiring.

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