FOR IMMEDIATE RELEASE

May 1, 2008

NEWS RELEASE

CONTACT:
Toby Rittner
President & CEO
(216) 920-3072
trittner@cdfa.net

Downtown Development Corporation, Louisville, KY – Downtown Housing Revolving Loan Fund Wins 2008 Practitioners Showcase Award

-- Recognized as Nation’s Best Revolving Loan Fund Program --

St. Louis, MO – ·The Downtown Development Corporation, Louisville, KY – Downtown Housing Revolving Loan Fund was selected as the best Revolving Loan Fund (RLF) program in the nation today at the Council of Development Finance Agencies’ (CDFA) 2008 Annual Development Finance Summit in St. Louis, Missouri. Four finalists presented at the Practitioner's Showcase: Best Revolving Loan Fund Program at the Annual Summit, and a live audience vote determined the best Revolving Loan Fund (RLF) program in the country.

This is the third year for CDFA’s Practitioner’s Showcase program, which celebrates excellence and expertise in the development finance industry. CDFA is recognizing successful RLFs that have proven results, create change in their communities and raise awareness of this important economic development finance tool. RLFs have emerged as a powerful gap-financing mechanism for communities actively supporting economic development projects.

The four finalist organizations were:

-Downtown Development Corporation, Louisville, KY – Downtown Housing Revolving Loan Fund
-City of Vineland, NJ – Fund for Economic Development
-South Florida Regional Planning Council, Hollywood, FL – Revolving Loan Fund Program
-St. Louis County Economic Council, St. Louis, MO – Saint Louis Business Development Fund

These finalists were selected from a pool of applicants from across the United States. During CDFA’s annual luncheon on April 30, each finalist community was given 25 minutes to present the merits of their program and provide details as to why they deserved to be recognized. After all finalists presented, the live audience voted to select the 2008 winner.  

The Downtown Housing Revolving Loan Fund was selected as CDFA’s 2008 Practitioner’s Showcase: Best Revolving Loan Fund Program award winner. The Downtown Development Corporation of Louisville , KY was recognized by its peers for its ability to encourage market rate housing in the city’s downtown area. The $6,800,000 fund has helped to leverage financing for $128,600,000 in downtown housing projects that have spurred an additional $2 billion in development within the Central Business District. The fund was created in the late 1990s through a partnership between the city of Louisville and a consortium of 14 local private member institutions of the Downtown Development Corporation (DDC).

The Downtown Housing Revolving Loan Fund was presented a plaque by CDFA Board of Directors outgoing Chairperson , Frances Walton, Vice-Chairperson, Darnell Moses and CDFA President & CEO , Toby Rittner.  The award was accepted by Barry Alberts , Former Executive Director of the Downtown Development Corp., Rebecca Matheny, Downtown Project Coordinator, for the Downtown Development Corp., and Louis Straub, Senior Vice President of JPMorgan Chase.

"CDFA is proud to present the Downtown Housing Revolving Loan Fund with the 2008 Practitioner's Showcase award for the best RLF program. The Downtown Housing Revolving Loan Fund demonstrates that a successful RLF program can have on a positive impact on a community. Congratulations to Louisville , Kentucky and the Downtown Housing Revolving Loan Fund and all of the finalists for this great achievement" said Toby Rittner, CDFA President & CEO .

CDFA is a national association dedicated to the advancement of development finance concerns and interests. CDFA is comprised of the nation’s leading and most knowledgeable members of the development finance community representing more than 265 public, private and non-profit development organizations.

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  Downtown Residental Development

Glassworks RoofNo segment of the downtown Louisville development scene has more momentum than residential development.  There are currently over a dozen residential developments or mixed use development in the pipeline ranging from 2 units to over 400 residential units.  Our most recent market analysis suggests that the demand is strong, and getting stronger.

While this is very exciting, it has not always been the case.  Prior to 2001, the development community was not eager to test this market, and the financial community was quite uncomfortable as well with the risks associated in its financing. However, the Downtown Development Corporation and the Mayor of the City of Louisville believed that the time was right to begin to develop market rate housing units in downtown Louisville.  At that time, however, this belief was not universally shared. The Downtown Housing Fund was created in such an environment, with its mission “To stimulate the production of market rate housing units in the central business district and adjacent neighborhoods by providing attractive secondary financing assistance.”

The DDC and the Mayor realized that the single most important factor to create a vibrant, twenty-four hour downtown is people of all incomes living downtown.  However, Louisville had not seen any new major market-rate housing development since 1985.

The City of Louisville and a consortium of 14 local private member institutions of the Downtown Development Corporation (DDC) invested a total of $5,000,000 initially (and subsequently recapitalized to $6.2 million), with the goal of serving as a stimulus to this market and providing a catalytic action to bringing alive the previously dormant downtown housing market.The Downtown Housing Fund is a administered through a for-profit private development LLC with its sole goal the creation of market-rate housing in downtown Louisville. 

The Downtown Housing Fund provides the lending community with a relatively low-risk method to become familiar with downtown housing as a good investment, to provide real time comparables, and to reduce the equity and risk developers were being forced to come up with in order to even broach the potential of financing. Knowing that the cost of land was also a big problem, particularly given the relatively modest rents in the Louisville market, the Mayor made market rate housing a priority for ALL of the available property that the City controlled downtown.  Finally, the DDC did its own market study, not just to update the few relevant comps we had, but to help determine the appropriate type of housing, unit mix, and target demographics that would make for a successful downtown housing program in Louisville.

The Downtown Housing Assistance Fund, LLC (DHA) provides secondary financing to downtown residential developments or mixed-use projects with a substantial market rate residential component. DHA loans are made at well below the current commercial interest rates. A loan committee composed of DHA representatives reviews loan applications and makes recommendations to the DHA on the merits of the application, utilizing a set of program guidelines that the DHA developed and provides to each potential applicant. The DHA, LLC usually provides 10-20% of the total debt on each project, with its loan secured in a secondary position to that of the primary lender.

The creation of the DHA has played a catalytic role in the  housing renaissance in downtown Louisville.  It has been part of the financing of ten separate projects representing almost 400 new residential units in the downtown area. For more information, contact the DDC.