Asset Building is Not Just for Clients: MEDA Refinances Plaza Adelante to Ensure Financial Stability

1917-12042015_CRE-Plaza Adelante Refi Blog Socia Media Image_blog_640x295pxMEDA has been successfully providing asset-building services to the low-income Mission community for over four decades. Financial capability is the thread that runs through MEDA’s innovative service-integration model of programs that range from workforce development and free tax preparation to business development and housing opportunities. The nonprofit knows that families cannot thrive without financial stability.

Neither can a community-based organization such as MEDA.

Like some of its clients, MEDA was the victim of no-fault eviction. This happened during the dot-com time, when MEDA’s offices were in the U.S. Bank Building on Mission and 22nd streets. The organization was compelled to find new commercial space, eventually locating an office for lease a couple of blocks away, but the sting of being evicted was never forgotten. MEDA’s board and management knew that the organization needed to buy its own building to ensure long-term stability.

So, MEDA acted when a three-story furniture store, located in the heart of the neighborhood at Mission and 19th streets, went up for sale during the Great Recession in 2008.

Making this neighborhood service center a reality was no easy task; it would have been near impossible without community support.

Such succor initially came about from being able to garner a loan from U.S. Bank, plus receive the support of the City of San Francisco, SDS Group and others.

Then it was the Northern California Community Loan Fund (NCCLF) to the rescue. NCCLF has a mission to “build financially strong and culturally vibrant communities.” Think of it as equitable neighborhood revitalization.

In MEDA’s circumstance, NCCLF employed the New Markets Tax Credit (NMTC) program: this is a powerful tool to help nonprofits and community-serving businesses invest in their local neighborhoods. Established by Congress in 2000, the NMTC program provides an opportunity for individual and corporate taxpayers to make investments that stimulate economic development and create jobs in low-income communities. The Mission District met this definition. The credit equals 39 percent of the investment paid out over seven years. (This total credit of 39 percent comprises five percent in each of the first three years, then six percent in the final four years.)

The building was purchased and refurbishment began. The result was the vibrant neighborhood center branded Plaza Adelante, where over 6,300 clients receive free services each year.

With the seven-year timeframe of the NMTC now expired, MEDA just completed a refinancing of Plaza Adelante, with Wells Fargo. The good news is that a lower interest rate was garnered and MEDA now has 50 percent equity in the building.

Explains Karoleen Feng, MEDA director of community real estate, “The initial community support received, coupled with the refi, ensures that MEDA will be able to stay in our neighborhood of choice—the same thing we fight for on behalf of our clients. There are also numerous nonprofit partners, with mission statements that align with that of MEDA’s, that rent space in Plaza Adelante. These community-based organizations can also now feel more secure in their ability to stay in the neighborhood.”

This is a definite win for the Mission and showcases how community support is vital to empowering residents and organizations to achieve financial stability.



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