In March 2006, Chapter One Bank decided to take a bold step. Taking on an even bigger role as a community development catalyst working with academic, charitable giving, community, governmental and medical organizations, Charter One, a division of RBS Citizens N.A., recast its relations with those organizations so the group’s individual and collective resources could be applied even more effectively in improving Cleveland’s University Circle district and six surrounding neighborhoods.
Home to such premier educational and research institutions as The Cleveland Clinic and Case Western Reserve University as well as a wide assortment of arts and cultural entities, “The Circle”, as it is known locally, is a consortium of more than 50 diverse organizations that is blossoming into a 21st Century magnet for world-class intellectual capital. Many community leaders believe the Circle is one of the key engines driving the transformation of Northeast Ohio, not just Cleveland, and that its accelerating critical mass of research, development and commerce will serve as the proverbial “rising tide” that lifts, if not all boats, then many more than have been lifted previously.
“The (University Circle) neighborhood itself is just a rare and unique combination of resources,” observed Rockette Richardson, Charter One’s director of community development. “There were all these things happening organically because these (partner) institutions were bumping up against one another. It was exciting to see a private institution (Charter One) look at that and say, ‘Wow, if we put our resources with all the other resources that are moving together, we could be the thing that takes it to the next level.’ ”
And that the bank did. Launching the Charter One UPtown Initiative, a three-year, $150 million corporate commitment to bolster large-scale development projects and improve housing opportunities in the Circle and surrounding neighborhoods, the bank deliberately avoided making a single, headline-type contribution or focusing on an individual aspect of development in favor of a holistic, multi-disciplined, partner-centric strategy. At launch, the original key elements of UPtown included:
>> 100 million set-aside for economic development investments to encourage large and small businesses to invest in the area, including pre-development funding;
>> $50 million to increase the availability and quality of both affordable and market-rate housing, including a set-aside of $35 million to promote rental or for-sale affordable housing by nonprofit developers at rates of five percent for three years, capped at seven percent, with a 30-year amortization—$10 million for residential mortgages with down payment assistance and reduced rates; home improvement loans for as low as one percent; and a $1.25 million partnership with the nonprofit, Neighborhood Progress Inc., focused on land acquisition and pre-development for affordable housing, transformation of vacant lots and a Model Block program;
>> $250,000 in foundation grants for neighborhood beautification, public safety and community planning.
To ensure that neighbors, and not just neighborhoods actually benefited from the UPtown Initiative, and to foster similar sustainable growth elsewhere in Northeast Ohio, Charter One deepened its commitment to small business and micro lending. The bank quickly emerged as the top-ranked SBA lender in Ohio as well as the #1 minority lender, jumping from one dozen to 1,600 SBA loans within 24 months. It also inaugurated an UPtown-specific micro lending initiative.
“The thought was to focus on neighborhood residents,” said Keith Burgess, senior vice president for community development lending. “All too often in these types of initiatives, you have the community people who see all this go on and question what it really means to them.” According to Burgess, micro lending within the six targeted neighborhoods of Buckeye, Fairfax, Glenville, Hough, Little Italy and University Circle helps address a startup entrepreneur’s lack of credit history or inability to tap a sufficient amount of home equity. “One, five or ten thousand dollars… we’re just getting going,” Burgess stated.
Charter One’s micro loan program with WECO Fund - added to the initiative’s mix of outreach efforts in 2007 - provides $500-$35,000 to eligible University Circle-based businesses that may not otherwise qualify for conventional bank loans. The micro lending program’s first recipient, Fresh Fork, is a startup enterprise which connects the region’s farmers to area restaurants searching for high quality local produce.
“Charter One’s investment will add sparkle to Cleveland’s cultural and institutional gem while revitalizing the neighborhoods nearby,” wrote the Cleveland Plain Dealer in an editorial at the onset of the initiative. So, in March 2008 at the close of the second year of the three-year initiative, what had been accomplished?
> The number of initiative partners had increased to 14.
> Programmatic funds had exceeded Charter One’s original $150 million commitment by more than $17 million.
> Commercial and commercial real estate lending dollars surpassed the March 2006 goal by approximately $45 million.
> Program grants climbed $38,500 above the original target.
> A total of 112 small business-, commercial- and housing-related loans were extended.
> And, according to the bank’s calculations, more than 88,000 citizens in the defined geographic zone have already been served.
Said Carrie Carpenter, the bank’s director of public affairs: “I wouldn’t suggest giving a million-dollar grant to an organization and walking away. We have taken the time to get to know what people want and to partner with them rather than just providing the funding.”
Added Rockette Richardson, “Sometimes, there are great ideas that are developed in a conference room, but they may not address what goes on in the marketplace because they didn’t engage the partners. I think the thing that makes UPtown unique is that it was a response to what was already happening in the marketplace and that filled the gaps where the private sector was needed.”
She concluded, “As housing develops, as jobs are created, as institutions expand, there is a multiplier effect, and that spreads outward from the Circle and certainly connects with Downtown.”
For Charter One’s many UPtown Initiative partners such as the City of Cleveland, Cleveland Neighborhood Development Coalition , Cuyahoga County, the George Gund Foundation , Greater Cleveland Partnership, University Hospitals and others, a bank that listens has truly gotten their ear.
For more information on the Charter One UPtown Initiative, contact Carrie Carpenter at (216) 277-0868 or at carrie.l.carpenter@charteronebank.com
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