Capital Impact Partners Award Over $400K to Local Developers of Color
In Detroit, where 83% of the population is Black, many development projects – commercial, residential, and mixed-use – are often led by “non-Black and Brown people” foreign to the community. While there are more Black developers in Detroit than 20 years ago – even 10 – with the current boom in development, there are opportunities … Continued
In Detroit, where 83% of the population is Black, many development projects – commercial, residential, and mixed-use – are often led by “non-Black and Brown people” foreign to the community. While there are more Black developers in Detroit than 20 years ago – even 10 – with the current boom in development, there are opportunities for more to become involved.
In a grand effort to bridge the divide that prevents many developers of color from working on real estate development projects in Detroit, Capital Impact Partners, through its Equitable Development Initiative (EDI), has awarded $415,000 in grants to 19 of its former cohorts to work on 16 development projects. Fifteen of the projects are in Detroit, and one is in Highland Park.
“The Initiative helps local real estate developers of color take a leadership role in shaping Detroit’s redevelopment landscape,” said Elizabeth Luther, Capital Impact Partners Director of the Detroit Equitable Development Program. “This includes more affordable housing and space for small businesses so that projects that affect the local community are led by people who are actually from the community. The Initiative is Capital Impact Partners’ effort to ensure that Detroit’s pool of real estate developers truly reflects the city’s diversity and that minority developers are able to participate in the myriad of revitalization efforts taking place.”
According to Luther, Detroit developers of color who have gone through Capital Impact’s Equitable Development Initiative have received training, mentorship, and access to capital to grow their respective businesses and create more developments and affordable housing to revitalize local communities.
Perhaps the hallmark of the Equitable Development Initiative is awarding grants, considered early-stage capital.
“Providing this early-stage capital, which is often the most difficult to secure, not only assists developers of color — who often are disinvested and denied by traditional financial institutions – but also helps them avoid predatory lending practices,” Luther said. “These grants help the developers secure pre-development services — giving them a better understanding of whether a project is viable, helping them expedite the timeline for the project, and alleviating their equity burden and early-stage risks.”
“Having access to capital is the biggest hurdle that developers must clear to complete projects,” said developer Darius Barrett, who, with developing partner Cecily King, are recipients of one of EDI’s recent grants. “Capital Impact’s Equitable Development Initiative allowed us to have a large sum of capital to go into pre-development. And, on this whole development journey, it’s about, can you weather the storm? Capital Impact has allowed us to weather the storm.”
Weathering the storm for Barrett and King means restoring a historic mansion on Ferry Street east of Woodward Ave., known as the Frank C. Hecker House. The two developers will transform the 100-plus-year-old mansion, which has been vacant for two decades, into four residential units while maintaining the structure’s historic amenities.
Barrett said he and King plan to start construction in May or June and complete the historic project in early 2024.
Anthony Askew, another former cohort of Capital Impact’s Equitable Development Initiative and recent grant recipient, is the lone EDI developer conducting work in Highland Park. According to Askew, he will develop a small mix-use project on Second Ave. When completed, Askew said the mixed-use development would comprise of two residential units and space for three commercial entities.
“The grant was for pre-development, so I’ve already done some of the initial design work and early schematic designs, but the grant will help me move forward to finishing the rest of the design work,” said Askew, a fourth-generation Highland Parker. “And the commercial spaces will be much needed for Highland Park entrepreneurs.”
Askew gives kudos to Capital Impact’s Equitable Development Initiative for coming into Highland Park, a city encircled by Detroit.
“I’m thankful for Capital Impact helping to bring much-needed development resources to Highland Park,” Askew said. “My hope is to break ground in the fall of 2023 and complete the project 12 months later. I hope this development project will encourage others to follow suit in Highland Park.”
The overall impact of all 16 projects, said Luther, is important, noting that through Capital Impact’s Equitable Development Initiative, the program facilitates building wealth for developers of color while assisting them in stabilizing neighborhoods through new construction and rehab projects.
“These grants, once completed and the projects move forward, will add 262 new residential units and over 90,000 commercial square feet into the neighborhoods where the projects are located. Some of them include subsidized and affordable units,” Luther said. “The projects range from two to four residential unit rehabs up to 30-plus units of new construction. Most of the projects have a mixed-use components.”
Since 2018, Capital Impact’s Equitable Development Initiative has graduated more than 100 cohort developers in the Detroit area. The grant awards have ranged from $10,000 to $75,000 to help EDI alums move their projects forward. The organization’s mission is to close the racial wealth gap and bring a continuum of capital to disinvested communities. The success of the Equitable Development Initiative in Detroit has led to the program expanding to other cities across the country.
“Capital Impact is a phenomenal stepping stone to anybody who wants to advance into development because the organization allows you to fully understand the development process,” said Barrett. “Capital Impact has given a holistic approach to underrepresented developers and a blueprint of how best to do development successfully. It is a one-stop shop for developers of color to pursue their goals.”