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SECOND AND THIRD BOTTOM LINE IMPACTS: Measuring Results Deborah J. La Franchi CEO – Strategic Development Solutions www.sdsgroup.com June 10, 2008.

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Presentation on theme: "SECOND AND THIRD BOTTOM LINE IMPACTS: Measuring Results Deborah J. La Franchi CEO – Strategic Development Solutions www.sdsgroup.com June 10, 2008."— Presentation transcript:

1 SECOND AND THIRD BOTTOM LINE IMPACTS: Measuring Results Deborah J. La Franchi CEO – Strategic Development Solutions June 10, 2008

2 Double and Triple Bottom Line Funds  1 st Bottom Line: Risk-adjusted market-rate returns  2 nd Bottom Line: Positive social and community benefits (low-income community)  3 rd Bottom Line: Positive environmental impacts 2

3 3 Funds Created by SDS and Economic Innovation

4 Impact Reporting  No Standard  Challenges – data collection  Upfront Design – collect upfront  Reporting that Works for Investors  Reporting that is Feasible for Developers / Fund Managers 4

5 Second and Third Bottom Line Impact Report  Goal:Standardized reporting tool; ease of use (investors); capture relevant data  Process:Compared 6 different reports; reviewed Gary Pivo’s Delphi Method paper; talking with investors  Input: Pension funds, banks, insurance companies, foundation endowments, RPI (David Wood/Gary Pivo), ICIC  Current Status:Template under development; sample constructed  Completion: End of Summer  Next Steps: Finalize and share with industry 5

6 6

7 One-Page Scorecard 7

8 8 Sections  Project Description  Investment Overview  Project and Area Profile  Second Bottom Line: Social and Economic Impacts  Third Bottom Line: Environmental Impacts

9 9 Project Description TBL World Headquarters The TBL World Headquarters Project will rehabilitate the historic four-story Hudson Building, as well as construct a new building extension and parking lot on an adjacent site. This $38 million project includes $7.5 million in National New Markets Fund tax credits to develop over 80,000 sq. ft. of space to house the administrative office of the global headquarters for TBL World, to support its humanitarian work addressing global poverty, hunger, and conflict resolution in over 35 developing countries world-wide. The project will also house TBL World’s new interactive public Action Center, community conference facilities, and TBL World Northwest’s Small Business Development Center. The facility will also serve as the new headquarters of the Lemming Foundation. The Action Center will serve as a regional educational center and resource for area schools and serve as a tourist attraction for outside visitors, and the business development center will assist low-income entrepreneurs who want to create or expand small businesses. The project also creates significant environmental impacts through its LEED Gold Certified design, though it is striving to achieve a platinum designation upon completion.

10 10 Investment Overview INVESTMENT OVERVIEW Project Timeframe:Start Date: 3/2008; End Date: Fall 2009 Investment Date:March 19, 2008 Asset Class:Mixed-Use: Office, Cultural Learning Center Type of Development:Historic Rehab; New Construction Developed Square Feet:80,000 (4-story facility) Total Development Cost:$39,000,000 NNMF Investment:$ 7,500,000 Financing Sources:Other Federal NMTCs$12.0MM Federal Historic Tax Credits$ 3.3MM Private Grants$ 2.9MM Debt$13.3MM

11 11 Project and Area Profile PROJECT AND AREA PROFILE Location:Portland, Oregon Area:Downtown (Old Town/Chinatown) Site Status:Underutilized; 75% vacant Previous Use/Operations:Retail/Shopping Center; Parking Lot Degree of Blight:Moderate to Significant Blight Unemployment Rate:18% Area Median Income:68% Poverty Rate:45% Special Economic Zones:Downtown Waterfront Urban Renewal Area; SBA HUB Zone Barriers to Development:High crime area; historic building

12 12 Second Bottom Line: Social and Economic Impacts 2 nd Bottom Line: Social and Economic Impacts Economic Output for Construction:$23.24MM Economic Output for Operations:$10.96MM annually Employee Compensation for Construction:$ 6.10MM Employee Compensation for Operations:$ 6.61MM annually Construction Tax Revenue:$ 3.46MM Operation Tax Revenue:$ 2.28MM annually Taxpayer Break Even:$11MM/yr 5 (cumulative) 20 Year Cumulative Taxes:$45MM Taxpayer 20 Year ROI:310% Taxpayer Internal Rate of Return:18% Operating savings and program funds:($X) Consolidates business infrastructure

13 13 Second Bottom Line: Social and Economic Impacts, Continued

14 14 Second Bottom Line: Social and Economic Impacts, Continued 2 nd Bottom Line: Social and Economic Impacts Jobs: 420 Total (220 Construction; 200 Permanent- 150 Existing/50New) Creates new tourist attraction Bolster foot traffic to support area businesses Rehabilitates a historic property / Blight eradication Outreaching to Women- and Minority-Owned Subcontractors Increases region’s nonprofit infrastructure Transit-oriented development: located on light-rail path Working with Local WIB to hire low income workers Finances real estate with flexible leases/rent Retirement Benefits: X Health Insurance: X

15 15 Third Bottom Line: Environmental Impacts 3 rd Bottom Line: Environmental Impacts LEED Gold Certified (targeting Platinum) CO2 Emissions reduction: X Energy: 37% reduction in overall energy usage Rooftop solar panels Green roof installation Mechanical system 50% more efficient than code Energy efficient glass Energy saving light fixtures Potable water usage reduction: 40% reduction in overall usage Low-flow fixtures Storm water filtration and management Water resistant landscaping

16 16 Third Bottom Line: Environmental Impacts, Continued 3 rd Bottom Line: Environmental Impacts Recycling of materials: Rehabs a historic building 95% of construction waste diverted from landfills Building products of high recycled content Promotes alternative transportation: Strategically situated on a Metro line Parking for fuel efficient cars Bike friendly amenities (storage, showers, changing areas) Environmental and sustainable living education provided in Action Center Reduced heat island effect through green roof and light colored roofing

17 DBL Handbook Funded by the Ford Foundation Provides a comprehensive overview of the field of Double Bottom Line investment private- equity funds. The Handbook is available at: 17


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