RFP release: September 14, 2020
Information sessions: October 13, 3 – 4 p.m., November 16, 1- 2 p.m.
LOI deadline: Rolling
Full application deadline: Rolling, dependent on LOI approval
Funding decision: As needed
The Chicago Community Trust is committed to the goal of closing the racial and ethnic wealth gap. Catalyzing Neighborhood Investment is one of the strategies helping to achieve this goal. The strategy focuses on the ecosystem that conditions how investment happens in underinvested majority Black and Latinx communities.
Through its Neighborhood Investment Strategy, the Trust has created a fund to support the pre-development phase of real estate development projects in Cook County. Equitable real estate development is an essential outcome of an impactful and just investment ecosystem, one in which developers of color can compete fairly with their white counterparts for project opportunities and capital to finance those projects. Using non-recoverable grants, the Pre-Development Fund aims to support community-based Black and Latinx developers in covering the costs of pre-development services, which are incurred before site acquisition and construction and pertain to due diligence and preliminary plans and specifications. The grants are not to support the administrative functions of an organization or company. Real estate development experts from The Community Desk at the Trust and Enterprise Community Partners are advisors to the Pre-Development Fund. They will provide technical support on select projects that receive grants from the fund.
In real estate development, 70 percent of decisions that pertain to project outcomes are made within the first 10 percent of the development life cycle. For community developers working in challenging markets, pre-development is fraught with multiple competing deadlines that complicate an already precarious development outlook. Developers frequently speak of the need for “no-cost capital” (i.e., non-recoverable grants) to cover pre-development services. These dollars bring a welcome degree of certainty to the project and allow community developers to compete with large for-profit developers that have the financial resources to navigate pre-development.
Real estate development in underinvested communities is complex during the best of times. The disproportionate impact of COVID-19 on Black and Latinx communities exacerbates that complexity, but it also underscores the need to leverage catalytic real estate development as an economic recovery measure. According to recent data, 27.1 percent of COVID-19 deaths in Illinois are Black residents and 20.6 percent are Latinx residents, and yet the state’s total population is just 14 percent Black and 17.5 percent Latinx. Even before COVID-19, residents of many South and West Side communities in Chicago were twice as likely to be unemployed, four times less likely to hold a bachelor’s degree, and had a life expectancy of up to 16 years lower than nearby majority-white communities. The spread of a dangerous respiratory virus in already-struggling communities is a recipe for crisis. Urban pollution, the absence of some combination of basic needs such as quality grocery stores, safe open space, accessible transportation options and healthcare facilities, and the extremes of either overcrowding or social isolation make it all worse. As the region pivots from the immediate needs of the crisis to building back better, real estate projects that incorporate racial equity, public health and the environment should take precedence. COVID-19 is a clarion call for sustainable development. The Pre-Development Fund will help communities answer that call.
Goals and Outcomes
One of the Trust’s 10-year goals to close the racial wealth gap is to increase financial investments in underinvested majority Black and Latinx communities. The Neighborhood Investment strategy has four “interventions” pertinent to the Pre-Development Fund that help the Trust achieve this goal. Full applications will require the completion of the indicators and outcomes in this section.
Priority Strategies and Activities
Eligible uses for the Pre-Development Fund include costs incurred in connection with:
● Economic, market and other feasibility analyses for the project.
● Architectural services limited to zoning analysis, test fits, cost estimating, space planning, and/or preliminary schematic design.
● Site due diligence, including but not limited to, environmental studies, soil testing, appraisals and surveys.
● Earnest money and deposits to execute purchase agreements and/or options for site control.
● Professional services and initial fees related to project funding to support deal structuring, financial packaging, tax credit applications, and/or grant applications.
● Project management professionals and consultants, including attorneys, accountants and project managers, used to support project approvals.
● Community engagement and coordination.
Grant Amounts Available and Grant Term
The Pre-Development Fund will award grants up to $100,000, with an average grant size expected to be $75,000. Funds are to be used for pre-development activities, as outlined in this RFP. Grants from the Pre-Development Fund are one-time investments, and thus not eligible for renewal. The Trust expects grant recipients to meet its requirements for the submission of financial and narrative reports at the end of an annual grant cycle, including a final report. Requests from the Pre-Development Fund must be made in a Letter of Inquiry (LOI) before moving on to a full application pending approval by Trust staff.
For more information about the criteria and application for this RFP, please visit GrantCentral, The Chicago Community Trust’s online grants management system.