The Reinvestment Fund (TRF) is one of Philadelphia’s oldest and now largest Community Financial Development Institutions (CDFI). Its portfolio includes investments in every corner of the city, from supermarkets in Brewerytown to entire commercial strips on North Broad Street.
What TRF does — and what CDFIs do generally — is make targeted investments in distressed communities based on an understanding of the community’s needs and strengths. TRF calls this investing at the “point of impact.” Some CDFIs do this by being located in the community. Others, like TRF, have an expansive research and analysis branch.
Started in 1985 in the Delaware Valley region, TRF has continually invested in Philadelphia, even as it has expanded to the entire mid-Atlantic region and beyond. Today, TRF is not nearly as well-known as the projects it finances, but in a way this is exactly its goal: provide financing and guidance, but let communities experience success on their own terms.
This is perhaps most evident in TRF’s steady commitment to redeveloping North Broad, an area dense with TRF-funded projects.
Even as development inches up Broad Street from Center City and student housing radiates from Temple University’s campus, TRF has made a point to invest in assets that are beneficial to the whole community, including retail, grocery stores, movie theaters and affordable housing.
At the center of these efforts is one North Philadelphia’s oldest African-American owned commercial properties — Progress Plaza.
Historical, Community-Owned, Blighted
Progress Plaza stands just below the heart of Temple University’s campus. Within a block of its location, a new high-rise dormitory, a movie theater, and a row of retail stores and restaurants called the Shops at Avenue North comprise the busiest commercial corridor on campus and perhaps the busiest on North Broad.
Like its neighbors, Progress Plaza has become a hub for students. FreshGrocer, the Plaza’s largest tenant, is the de facto campus grocery store. Students stream in and out of its automatic doors, pushing their shopping carts alongside longtime residents and families.
The Plaza, which today consists of of nine stores and two banks, is one of the longest running African-American owned shopping centers on the East Coast. Founded by civil rights leader Leon H. Sullivan (the namesake of a nearby human services building), the center was built in 1968 and has been in operation ever since, riding out the corridor’s decline and resurgence.
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But while the Plaza remained community-owned, it began to significantly decline after its original grocery store left in 1999 and a number of retail stores followed suit.
“Folks forget what North Broad Street looked like a good ten years ago,” said Don Hinkle-Brown, president and CEO of TRF. “The center was largely depopulated of tenants. It was blighted. Its infrastructure was old. The parking lot was in horrible shape, and it just was not a place you could market to new tenants.”
Wendell Whitlock, chairman of Progress Investment Association (PIA), the property’s holding company that represents 1,000 shareholders, agreed that the changes were jarring. “It was kind of like going from a slum to a beautiful condo,” he said.
PIA began to look into refurbishing the property as soon as the grocery store left. But funding did not come easy.
“When we went to look for financing starting at the end of 1999, major banks were not interested in funding our project,” Whitlock said. He added that multiple banks would not even speak to their representatives while others were more subtle in their dismissal.
Hinkle-Brown also noted this reluctance from the financial community. “Bank after bank after bank in Philadelphia turned that project down, despite the fact that it had tenants and prospects for additional tenants,” he said. “They turned it down because it was not owned by a well-heeled, well-known developer. It was community-owned. It was confusing and complicated for people to understand.”
But this is exactly what TRF and most CDFIs are designed for, untangling complicated local markets in distressed areas. With help from the state and local government, New Market Tax Credits, and a secondary lender in the community called the North Philadelphia Financial Partnership, the TRF investment allowed PIA to go through with the $16-million redevelopment. In 2009, the refurbished center opened with a brand new supermarket.
Seeing Value in North Broad
So what are the big banks missing?
In large part, it has to do with perceptions of risk, Hinkle-Brown explained. While distressed communities are riskier, their perceived risk by banks is often much higher than the reality. What TRF does, he said, is determine the community’s risk based on a multitude of factors, such as the quality of the schools, homeownership levels and assets like locally-owned shops and restaurants.
“We are actually looking more holistically at a community underwriting. We are trying to effect more than just one point and have a multi-pronged approach,” Hinkle-Brown said.
In addition to the Plaza, TRF has invested in the Shops at Avenue North, which contain a movie theater, multiple restaurants and retail, and the Paseo Verde sustainable housing development, where a TRF loan is paying for energy-efficiency measures.
For Whitlock and the PIA, the TRF has brought capital to private development and community development in an area now dominated by educational facilities and student housing.
“I would like to see more private development on North Broad Street,” Whitlock said. “I want the banks to be more interested and sensitive and more attuned to entrepreneurship and non-Temple owners.”
Whitlock cited the philosophy of Leon H. Sullivan as crucial to North Broad today.
“If you know anything about Reverend Sullivan, his whole thing was for-profit but also for the betterment of the community, to teach the community how to invest in itself.”
An interview from the documentary series “Philadelphia: The Great Experiment” that addresses the history of Progress Plaza.-30-
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