able to close $31.6 million in financing in December, including
$8 million from Wright-Patt.
The Dayton-based credit union($6.2 billion in assets, 421,569members) teamed with NationalCooperative Bank to provide a $16million loan for Five Rivers HealthCenters’ new facility in west Dayton called the Edgemont Campus.Two other parties provided theother parts of the funding.
The facility will replace five existing leased clinic spaces to allowFive Rivers to provide integratedand expanded services in one location. It now serves more than25,000 area residents and handles90,000 visits per year. That volume is expected to double after itopens this fall.
Everett said Five Rivers “pro-
vides vital services to citizens with
limited economic means and in
areas with limited access to qual-
ity health care.” It “produces great
outcomes for their patients but
also maintains a strong financial
performance, which is how we
were able to support the financ-
ing,” he added.
The loan is significant forWright-Patt for several reasons,Everett said.
While the credit union has madelarger commercial loans, this is itslargest for a non-profit. It granted $147.3 million in real estate-backed commercial loans in the12 months ending Dec. 31, threetimes its originations in 2019. Itsaverage loan last year was $1.8 million, up from $726,538 in 2019.
But Everett said the more im-
portant significance is the internal
growth it represents for the credit
union in being able to handle
riskier, more complex financ-
ing to serve a critical need in the
“This is a higher risk loan that
would be easy to pass on,” Ever-
ett said. “We valued this member
and believed in their mission, so
we found a way to get comfortable
with the unique structure and po-
tential risks so we could grow the
relationship. We want to do more
of this for fellow non-profits.”
Five Rivers was created in 2011
from the merger of three former
hospital residency clinics. The
goal was to become a Federally
Qualified Health Center (FQHC),
dedicated to helping to meet the
needs of an underserved area. An
FQHC provides primary outpa-
tient services and opportunities
for employment for the commu-
nity, often while working to meet
It has grown from 77 employeesserving 12,000 patients in 2012 to245 employees serving 28,007 patients in 2019. It is now the ninthlargest of Ohio’s 56 FQHCs.
The Edgemont neighborhood is separated from downtown Dayton by the Great MiamiRiver. Much of the area’s population growth happened in the early1900s with the industrial boom ofWorld War I and Great Migration ofBlacks from the South, according toa neighborhood plan published bythe City of Dayton in 2018.
The area attracted factories inthe early 1900s, developing largeemployers through the centurythat included Standard RegisterCo, the Sunshine Biscuit Company (perhaps best known asthe maker of “Animal Crackers”),General Motors and Delphi Automotive Systems.
“By 1960, the majority of thepopulation of Edgemont was middle-class Black homeowners,” theplan’s report said.
The construction of I-75 from1957 to 1970 sliced off a sectionof the neighborhood. Deindus-trialization began sweeping theMidwest in the 1980s, and the lastof the manufacturers were sweptaway by the Great Recession of2007-2009.
As businesses left Edgemontover the years, the communitysuffered, McFarlane-El said.
As of 2016, the Census Bureau found the area was home to2,276 people, 46% of them belowthe poverty line and 94% of themBlack. Its median household income was $24,447, compared with$45,394 for Montgomery County asa whole.
Five Rivers worked with thelocal community developmentagency that put together theneighborhood plan. Five Riversbought a 4.4-acre parcel wherean elementary school had closedand been demolished in 2001.
Five Rivers now has the equivalent of 218 full-time workers, andwill have 264 after the clinic opensin January 2022.
“This project will be the first ma-
jor employer to open in the neigh-
borhood in the past 10 years,” she
said. “We hope we’re going to be a
catalyst for other organizations to
join us in the neighborhood.”
Already, a retailer and a small
manufacturer are making plans to
open there, she said.
Making it possible is a 10-yearfinancing package. It includes the
$16 million loan that closed Dec.22 from source lenders Wright-Patt and the National CooperativeBank, $7 million from the sale ofthe tax credits to a third-party investor and $8 million in equityfrom Five Rivers.
The New Markets Tax Creditprogram is administered by theU.S. Treasury Department’s Community Development FinancialInstitutions (CDFI) Fund.
It’s designed to attract privatecapital into low-income communities by permitting individualand corporate investors to receivea tax credit against their federalincome tax in exchange for making equity investments in specialized financial intermediariescalled Community DevelopmentEntities. The credit totals 39% ofthe original investment amountand is claimed over a period ofseven years.
“The loan is very unique for us,”Everett said.
For one thing, because the borrower was a non-profit, the lenders could not get the typical personal guaranty. For another, whilethe $16 million loan is classified asa “real estate-backed commercialloan,” the tax credit’s rules preventthe source lenders from filing amortgage against the collateral forthe seven year period when thetax credits can be realized.
And instead of dispersing thefunds at given milestones, all ofthe proceeds had to be released atthe project’s start.
“Our team had to get comfortable with the risk profile of thistransaction and spend a lot oftime educating ourselves aboutNew Market Tax Credits,” he said.
Everett said these deals areusually assembled by for-profitbanks that can both provide thesource loan and purchase the taxcredits.
“Credit unions rarely see thesetypes of opportunities becausewe cannot use the tax credits,” hesaid. “Five Rivers chose to partner with us due to our longstanding relationship with them. Weworked together to find a bankthat would buy the tax credits.
“There were a lot of movingparts, interested parties and lawyers galore involved in puttingthis together,” he said. “Duringthe final two months leading toclosing, we were on nearly dailyconference calls with upwards of50 people working through thelogistics.” n
OhioCONT. FROM PAGE 1
Y A Dayton CU helped put together financing fora health complex in a Black neighborhood.
Y This is Wright-Patt’s largest commerciallending project ever with a non-profit.
Y The project will bring a major employer to afinancially-depressed area of Dayton.
Five Rivers Health Centers plans to open a new Edgemont Campus this fall. (Photo credit: Wright-Patt CU)
Downtown Dayton, Ohio.