1. Board of Directors Meeting
February 12, 2015

2. 2015 Goals & Outputs

3. 2015 Goals & Outputs
Establishes what the organization wants to do/accomplish during the year.
Board involvement, responsibility in a number of areas.
Basis for staff performance bonus decisions a year from now

4. Board Development
CHDOs & CBDOs

5. CHDO Community Housing Development Organization
HUD designation re: HOME
About the “what”
Key requirements related to:
Legal Status
Purpose
Service Area
Community Representation

6. CHDO
Not-for-profit
“Provision of decent housing affordable to low/- mod-income persons” must be among purposes.
Clearly defined service area
But size doesn’t matter; as small as a single neighborhood or as large as an entire city.
1/3 of Board represents “low-income community”
Residents of low-income neighborhoods the org serves
Low-income residents of the greater community
Elected representatives of low-income neighborhood organizations*

7. CHDO Additional Considerations Why Designation Matters
Organizational capacity & experience
Input from low-income community
Limited public-sector representation on Board
Why Designation Matters
15% HOME set-aside for CHDOs
HOME funds can be provided for Operating Support
CHDOs can retain Project Proceeds: “profits” from sales, net rental revenues, interest on HOME loans made, etc.
Must re-use for low-income housing activities
Use of Project Proceeds does not regenerate new Project Proceeds

8. CBDO Community Based Development Organization HUD designation re: CDBG
About the “where”
For-profit or Non-profit
Engaged in community development activities….
Within a defined geographic area of operations.
Intended to improve the physical, social, economic environment.
With attention to the needs of low/mod-income persons.

9. CBDO
Board must be drawn from the geographic area of operations….. 51% of Board must be:
Low/mod-income residents
Not just residents of low-income neighborhoods; individual income matters.
Owners or senior officers of private establishments or institutions located in (and serving) the area
Make the case for senior executives, but not simple employment.
Elected representatives of low-income neighborhood organizations located in the area of operations*
Also limit on # of public-sector Directors.

10. CBDO Why Designation Matters
CBDO’s not considered “Sub-Recipients”; Program Income can be retained and re-used.
“Program Delivery” costs to not fall under the 20% Administrative Costs cap.
Allows use of funds for hard construction costs & allows CDBG funding for new construction projects.
Exempts certain eligible activities from 15% Public Services cap.

11. Board Discussion
Thoughts, implications, considerations in relation to:
Board composition, operations, etc.?
Notion of boundaries and “representation”?
Organization’s activities, functions, role?
Re-thinking of the structure of local community development system?

12. Reduction in Board Size

13. Reduction in Board Size
Formal resolution by the Board to set the number of Directors at 19.
NOT an amendment to bylaws.
Considerations re:
On-going vacancies
Time & effort filling vacancies
Constraints on filling current vacancies
Priority on “quality” not “quantity”
Guiding Governance Committee work identifying & recruiting Directors for upcoming year.

14. 2015 Fundraising
Target Major Donor Campaign

15. Major Donor Campaign Assessed 2010-2014 Contributors
Donations, luncheon, program support
“LAI” – Linkage, Ability, Interest
Goal: Raise $20,000
Levels of “Investors”
Integrating contributions, luncheon, recognition & benefits
High level of activity now; March – May

16. Major Donor Campaign Fundraising is Joint Effort of President & Board
Directors take active leadership in “relationship development” for 1-3 target donors.
Open doors, communication/touch point, gather information, engage donor w/ NNDC, help make asks.
Tools & Support
Elevator speech, talking points, contribution levels
Joint face-to-face outreach meetings w/ President, NNDC staff

17. Glenmoor Apartments

18. Background “Twin” to Oxmoor building next door Glenmoor
NNDC co-developed Oxmoor in
Glenmoor
California Owner
Tried to structure a Glenmoor project in 2013
29 Units, including 5 in basement
Very nearly full gut rehab; MEP, kitchens, baths, etc. except roof & windows
Health & Hospital closed the property at Thanksgiving
Property is For Sale; $325k is the “free & clear” transaction price (incl $265k owed to bank)

19. The Project $1.9 million project cost w/ $150k acquisition
$1,000,000 HOME grant, $500,000 AHP grant
$250,000 HOME loan; “waterfall-like” repayment
Partially deferred developer fee & nominal equity investment
24 units, all one-bedroom, low & very-low income tenants, 15-year affordability period
NNDC & Partners in Housing joint venture (LLC)
NNDC & Partners would co-develop, split $85k fee
Partners would be the property manager
NNDC & Partners split $40k annual net cash flow

20. Issues, Challenges, Risks
Acquisition Cost
Site Control; price and timing
Grant Funding
HOME: apps due 3/18, announcement 4/1,
AHP: apps due mid-March, announcement 7/1, less competitive
Funding contingencies can lower competitiveness
Construction
Loan guarantees & ability to complete if things go wrong
Division of Cash Flow
HOME “Grant-to-Value” ratio; on-going compliance

21. Next NNDC: Is this a deal we want to do? A project we want to be in?
Structure partnership with PIH
Get site control at do-able price
Lender, broker, Health& Hospital

22. To Complicate Things Serious interest from private-investor with cash
Contingent on grant $$, partnership w/ NNDC
Pros:
Would remove AHP contingency, improve “project readiness” & chances at HOME award
NNDC would still receive fee & receive it earlier
Reduced liability once construction was completed.
Cons:
NNDC wouldn’t receive on-going cash-flow
Investor inexperience; type & scale of construction, type of property, grant, tenants

23. Discussion