RFP: Pre-Development Fund

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
Announcement: Rolling

Grant Application Timeline


For reference, all LOIs submitted by the dates noted in the table above will process according to this timeline.

Informational Webinars

Pre-Development Fund Info Session – Monday, November 16, 2020
Pre-Development Fund Info Session – Tuesday, October 13, 2020

Before You Begin

All letters of inquiry (LOI) and applications must be submitted via GrantCentral, The Chicago Community Trust’s grants portal. If your organization does not have a GrantCentral account, click here and follow the prompts to create your account.

LOI submissions are not accepted via email.

Background

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.

Need/Opportunity Statement

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.

Download a PDF of the Pre-Development Fund RFP.

Download the Pre-Development Fund information sheet.

Register for an info session.

Testimonials

Ciere Boatright, Vice President of Real Estate & Inclusion at Chicago Neighborhood Initiatives, Inc.
Luis Gutierrez, Founder & CEO of Latinos Progresando
Leon Walker, Managing Partner of DL3 Realty

Resources

GrantCentral FAQs
GrantCentral Registration Instructions
Sample Organization Profile

Frequently Asked Questions

  • General

    How does the Pre-Development Fund define “community developer”?

    The Pre-Development Fund defines community developer as a nonprofit organization or for-profit company that administers real estate development projects in accordance with the values, principles and plans of the community in which the projects are occurring. The Pre-Development Fund prioritizes community developers of color, particularly Black and Latinx community developers.

    How does the Pre-Development Fund define “community of color”?

    Defined geographies in which 70% of residents are non-white. A community of color is composed of residents identifying as one or more racial and ethnic identities (African, Latinx, Arab, Asian, Native American). The Pre-Development Fund prioritizes Black and Latinx communities.

    Do female and female-identified developers receive priority from the Pre-Development Fund?

    Yes. The Pre-Development Fund prioritizes female and female-identified community developers of color, and especially Black and Latinx developers.

    My project is in an underinvested community of color but is outside of Cook County. Am I eligible to receive a grant from the Pre-Development Fund?

    No. The Pre-Development Fund is exclusive to projects in Cook County.

    The Pre-Development Fund requires that I have a demonstrated positive track record in the community of my project. What does this mean?            

    Established relationships with representative community leaders and organizations who can substantiate any claims that your project is in accordance with the values, principles and plans of the community. Letters of support and other communications endorsing your project and partnership are strongly encouraged.

    What’s the process of securing a grant from the Pre-Development Fund?

    The application process has two steps: a letter of inquiry (LOI) phase and a full application phase. Only select letter of inquiry (LOI) applicants will be invited to the full application phase. All letter of inquiry (LOI) applicants will be notified whether they will be invited to the full application phase and invited applicants will be given ample time to complete the full application. Please visit the RFP for additional details about the process.

    When can a letter of inquiry (LOI) applicant expect to be invited to submit a full application?

    Approximately two weeks after the letter of inquiry (LOI) submission, the applicant will receive notification as to whether or not they have been invited to submit a full application.

    If my proposal is declined, will I be told why?

    You will receive a notice that your proposal doesn’t competitively align with the requirements of the RFP at the time of submission. Staff time limitation does not allow for individual discussions about proposal declines. However, you may contact staff via email for additional limited details on the reason for the decline.

    If my proposal is declined by the Pre-Development Fund, can I re-apply?

    Yes, but we advise you to communicate with the Pre-Development Fund staff about the reason for the decline so you can submit a more competitive proposal.

    Can I apply for multiple grants from the Pre-Development Fund?

    Yes, but only if the applications are for separate projects on different sites.

    Can I apply for renewal funding for the same project from the Pre-Development Fund?

    Unlikely. The Pre-Development Fund generally makes one-time grants to a project for discrete pre-development activities to move the project forward.

    The letter of inquiry (LOI) is very short. How do I convey all the details of my project within the space limitations of the letter of inquiry (LOI)?

    A letter of inquiry (LOI) cannot capture all the details of your project. As best you are able, we encourage you to submit a letter of inquiry (LOI) that captures these critical themes for your project: community support, financing, and the ability to catalyze change. The four prompt questions that follow should guide your responses in the letter of inquiry (LOI) as well as the full proposal:

    • Who are the community leads/supporters on your project?
    • Which development and financial resources/incentives has the project secured to date and/or has or is planning to apply for?
    • How is your project likely to contribute to market development without displacement in the community?
    • Does your team currently own the proposed project site or have a strategy for site control?

    How long will I have to perform the pre-development activities under the terms of the grant from the Pre-Development Fund?

    The Pre-Development Fund will allow up to three years for full expenditure of the grant. Grant recipients should expect to provide regular predetermined status updates about the project in accordance with the outcomes identified in the proposal.

    Am I eligible for the Pre-Development Fund if this is my first development project?

    Yes, as long as your project is aligned with the requirement of the RFP.

    I have pre-development activities that are not listed in the RFP. Is this okay?

    Maybe. All pre-development activities will need to be identified in the letter of inquiry (LOI) and, if invited, the full proposal. Staff will let you know if the activities do not qualify under the requirements of the RFP.

    Can these dollars be spent on architectural services?

    Yes. Funding can be used to complete initial test fits and schematic-level drawings to apply for an RFP or to secure financing. Funding should not be used for full-scale architectural drawing including design development and construction drawings. These drawings are typically not required at the early stages of a project.

    The Pre-Development Fund has secured The Community Desk and Enterprise Community Partners as advisors and technical partners. What does this mean and how can it help my project?

    Enterprise Community Partners will monitor and coordinate resources for pre-development awardees. As the project progresses, The Community Desk is available to pressure test project assumptions and feasibility. Both Enterprise and The Community Desk can support projects in identifying potential capital.

    Can I talk with Pre-Development Fund staff about my project prior to the letter of inquiry (LOI) submission? What about the full proposal?

    Yes, but tight calendars and staff bandwidth may prevent a timely or substantive response. The RFP, FAQ, and other information on the Pre-Development Fund webpages provide ample information on what constitutes a competitive project.

    Does the Pre-Development Fund provide grant-writing assistance?

    No. Pre-Development staff will assist only with application submission and questions about the RFP. For questions about application submission, contact cmarquez@cct.org. For questions about the RFP, contact mdavidson@cct.org.

    How does the Pre-Development Fund classify L3C entities?

    L3Cs are considered private sector entities and therefore must secure a nonprofit fiscal sponsor to be eligible for the Pre-Development Fund.

  • For-Profit Community Developers

    For-profit community developers are eligible to receive a grant from the Pre-Development Fund provided annual revenues are less than $10M, the company has a positive historical track record of working in communities of color, and the company secures a nonprofit fiscal sponsor to submit the application. The Pre-Development Fund prioritizes for-profit community development companies under the ownership of people of color, particularly Black and Latinx owners.

    What is a nonprofit fiscal sponsor?

    A fiscal sponsor is a nonprofit 501c3 organization that provides fiduciary oversight, financial management, and other administrative services to help build the capacity of charitable projects that do not have their own 501c3 charitable status. “Fiscal sponsorship” refers to the formal agreement between the fiscal sponsor organization and the sponsored project/organization, which is typically documented in a memorandum of agreement or contract. The role of the fiscal sponsor can include performing many different administrative functions on behalf of the sponsored organization or program, including taking on the responsibility of receiving and administering charitable contributions on behalf of the sponsored organization. Some fiscal sponsors do a lot more, such as performing back-office functions. Fiscal sponsors typically charge an administrative fee for their services, which is usually a percentage of the budget of the sponsored organization or program. Read more here.

    I am a qualifying for-profit community developer and would like to apply to the Pre-Development Fund, how do I find a non-profit fiscal sponsor?

    There is no straightforward approach to finding a fiscal sponsor. For recommendations, consider contacting a representative organization or leader of the community you’re working in. Examples include chambers of commerce, community development corporations, ward offices and municipal economic development staff. You can also contact trade organizations or regional nonprofit organizations that have relationships with local community development interests.

    Can the Chicago Community Trust help me find a nonprofit fiscal sponsor?

    No. The Trust cannot help you find or secure a nonprofit fiscal sponsor.

    What size does my for-profit development company need to be to receive funding from the Pre-Development Fund?

    Grants from the Pre-Development Fund are made eligible to small and mid-sized community developers with annual revenues under $10M.

    My for-profit development company is large with a sizable workforce and annual revenues exceeding $10M. Am I still eligible for funding from the Pre-Development Fund?

    No. The aim of the Fund is to support small and mid-sized for-profit developers with annual revenues under $10M.

    My small for-profit development company is partnering with a large, established for-profit development company on the project. Am I still eligible to receive funding from the Pre-Development Fund?

    Yes, as long as the pre-development funds are used by and benefit your small for-profit development company. The qualifying partner must apply to the Pre-Development Fund.

    I’m a for-profit community developer that is not based in the community of the project. Am I still eligible for a grant from the Pre-Development Fund?

    Yes, as long as you meet the requirements of the RFP and the project has the support of the community in which you are working.

    What qualifies as a for-profit Black or Latinx developer?

    Recognizing the need to build the capacity and strengthen Black and Latinx developers, the goal of the fund is to promote ownership structures that go above and beyond traditional MBE/WBE ownership requirements. The fund is targeting developers with 70% minority ownership.

    Will my for-profit company need to disclose financial information to the Pre-Development Fund?

    The for-profit development company will need to complete a Developer Profile during the application process, which collects the necessary information to confirm qualifications for the program.

  • Nonprofit Community Developers

    What is a Nonprofit Community Developer?

    A nonprofit community developer could be a nonprofit community development corporation (CDC) or a nonprofit organization that has demonstrated capacity for real estate development projects. Additionally, it includes nonprofits that have an ownership interest in a community-based real estate development project.

    We’re a nonprofit community developer that is not based in the community of the project we’re working on. Am I still eligible for a grant from the Pre-Development Fund?

    Yes, as long as the project meets the qualifications of the RFP and aligns with community priorities.

    We’re a nonprofit community developer with a racially diverse board and staff, but we’re not led by a person of color. Can we still receive a grant from the Pre-Development Fund?

    Yes, as long as your project meets the qualifications of the RFP and aligns with community priorities. However, the Pre-Development Fund prioritizes nonprofit community developers of color, particularly Black and Latinx community developers.

    We’re a nonprofit community developer without a racially diverse board and staff. Can we still receive a grant from the Pre-Development Fund?

    Yes, as long as your project meets the qualifications of the RFP and aligns with community priorities. Consider partnering with a community-based organization led by a person of color, particularly a Black and Latinx individual. The Pre-Development Fund prioritizes nonprofit community developers with racially diverse boards and staff.

    Can CDFIs apply to the Pre-Development Fund?

    Yes. But only in the role of “at-risk” developer, which means the CDFI is in legal ownership and involved with securing and executing the financing to support the project. In the role of lender, CDFIs are ineligible.

    Can CDFIs serve as the fiscal sponsor?

    Yes. CDFIs can serve as fiscal sponsor to community-based developers or a finance partner on the project.