Cincinnati Development Fund: Quarter century of community impact through $283M in loans

'They go where banks won't go'

CINCINNATI – As difficult as it might be to imagine now, there was a time not long ago when almost nobody wanted to live downtown or in Over-the-Rhine.

And no single financial institution has been more responsible for changing that attitude than Cincinnati Development Fund, or CDF.

Years before the Cincinnati Center City Development Corp. known as 3CDC even existed, CDF was making loans to developers to convert vacant office space into condos and apartments downtown and rehab decaying historic buildings in Over-the-Rhine. It's the kind of work that nonprofit developer 3CDC is better known for these days with the scores of buildings it has renovated in Over-the-Rhine and its multi-million-dollar overhaul of Fountain Square.

While the downtown and Over-the-Rhine residential markets are thriving now, financing development there in the 1990s was not an easy sell, said Jeanne Golliher, CDF’s long-time CEO.


“The argument was, ‘Why would anybody want to live downtown? There’s nothing here.’ And there wasn’t,” she said. “The city sidewalks rolled up at 5 o’clock.”

But Golliher and executives at Downtown Cincinnati Inc. and the Cincinnati Business Committee worked to convince the city’s bankers and business leaders that investing in downtown would benefit the whole region. CDF raised $23 million for an urban living loan fund in 1998 that helped spark downtown’s residential rebirth.

“They go where banks won’t go – or minimize the risks,” said Kathy Schwab, executive director of the Local Initiatives Support Corp. of Greater Cincinnati and Northern Kentucky and a long-time CDF board member. Schwab was the DCI staffer worked with Golliher to form the urban living loan fund.

Or as 3CDC Executive Vice President Chad Munitz put it: “They understand what it takes to get projects done.”

Banking On Developers’ Passion For Place

Lending where traditional banks won’t is the role of a community development financial institution such as CDF. Cincinnati area banks created the organization in 1988, primarily to finance affordable housing development.

CDF is celebrating its 25th anniversary from 5:30 p.m. to 9:30 p.m. May 1 at Memorial Hall. 

CDF’s earliest loan programs focused on preserving hundreds of vacant, blighted buildings and transforming them into quality affordable housing units.

When Golliher became CEO in 1998, she convinced her banker board members to expand the organization’s mission to include market-rate housing, too. She found that the more market-rate units CDF financed, the more affordable housing it could finance, too, she said.

Through the end of last year, CDF financed nearly 5,000 housing units with loans totaling $283 million.

Golliher attributes much of CDF’s success to the passionate developers the organization has made loans to over the years.

CDF has specialized in helping smaller developers, the “two guys and a pickup” variety who started Over-the-Rhine’s market-rate housing rebirth before 3CDC came on the scene a decade ago.

Jim Uber fits that mold. He bought a 3,000 square-foot building near 15th and Elm streets in 2010 so he and his wife, LotuSh Chang, could renovate it and live there.


Financing the project was far more difficult than Uber anticipated. He tried to work with another lender and paid a $2,500 application fee before the bank told him he wouldn’t get the loan.

A friend suggested he go to CDF, and the staff there understood exactly what Uber was trying to do, he said.

“They were sort of mentoring me through the whole process,” he said. “I think the bottom line for them is they want to invest in good projects.”

CDF also aims to invest in good people, Golliher said.

Although CDF and its member banks have taken losses over the organization’s 25-year history, Golliher said CDF has never lost money on loans made to small developers who invest their own money, sweat and time into buildings that they love.

“What we saw during the financial crisis was that the people who were attracted to developing in the city because they thought they could make money – when the economics changed, they bailed,” she said.

The two guys and truck developers, though, did everything they could to keep their properties and make good on their loans to CDF, she said.

“It’s very rewarding to me to have proven what I suspected all along,” Golliher said. “The people who get involved because they love the community or love the architecture – they perform.”

Those who have worked alongside Golliher for years say her approach to CDF’s mission is a big part of that success, too.

“She is probably one of the best collaborators in the city who will work with anybody and has no ego in the work,” Schwab said. “All she cares about is getting things accomplished.”

CDF certainly has accomplished a lot.


The Needs And Meeting Them

Since that initial urban living loan fund, the organization:

• Partnered with the city of Cincinnati in 2003 to create the Cincinnati Housing Development Fund to boost home ownership in city neighborhoods that suffered from population loss and blight.

• Won a $52 million allocation of New Markets Tax Credits in collaboration with the Uptown Consortium and created the Uptown Cincinnati Development Fund to finance projects in the neighborhoods surrounding University of Cincinnati, Cincinnati Children’s Hospital Medical Center and the Cincinnati Zoo & Botanical Gardens.


• Formed its first direct loan fund in 2007 using earnings from prior loans enhanced by philanthropic and public investment. When traditional banks couldn’t make loans during the financial crisis, CDF used this to help fund land banking and redevelopment of foreclosed homes in partnership with local community development corporations

• Redesigned the Cincinnati Housing Development Fund in 2010 to expand and help finance projects that resulted in rental housing and job creation through commercial development.

• Created the Community Enhancement Grant fund in 2011 to provide grants of up to $5,000 to enhance developments for the benefit of low-income residents.

• Closed on a $1 million loan with the CDFI Fund’s Healthy Food Financing Initiative to provide loans for retail fresh food outlets in food deserts.

• Partnered with Chicago-based IFF this year to provide loans for facility improvements to nonprofit organizations in Cincinnati and Dayton. JPMorgan Chase awarded a $1.35 million grant to fund the Cincinnati program.

All those programs have been designed to address needs in the community that innovative financing could help address, Golliher said.

“There’s always something else to be done,” Golliher said “And the more that we develop our capacity and expertise, the better position we are in to address those constantly changing needs.”

Compassionate Creativity

These days, CDF also is financing commercial developments to help revive ailing neighborhood business districts.

“That’s how things get started. That’s how momentum builds,” said Peg Moertl, a CDF board member and senior vice president at PNC Bank responsible for community development banking in Ohio, Kentucky and Indiana.

The organization also has moved beyond Over-the-Rhine and downtown, helping to finance projects in communities outside the city, such as Covington, Ky., and in Cincinnati neighborhoods such as Walnut Hills and Northside.

CDF has helped finance projects in some of the most blighted areas of Northside, helping bring those parts of the neighborhood back to life, said Stefanie Sunderland, executive director of the Cincinnati Northside Community Urban Redevelopment Corporation.

“Many of the houses we acquire have been vacant for a long time, and many were condemned,” she said. “They have been instrumental in not only just helping us to restore these houses but then to save them from being demolished.”

That’s part of what sets CDF apart from traditional banks.

Yes, CDF works to safeguard the money invested by its various banks and funders, and it certainly doesn’t aim to lose money.

But the organization’s mission is focused on strengthening communities, and that generally means making loans too risky for traditional lenders after doing enough homework to have faith in the projects.

“It’s the compassion that allows them to be creative, be problem solvers and get the work done,” said Chris Lacey, an Over-the-Rhine developer whose A&L Properties has financed a number of projects through CDF.

“Some lenders out there, they get nervous and they squeeze the borrower. And it’s those same lenders who fail to understand that if they squeeze that borrower too hard, they borrower will go out of business, and they won’t get their money back,” Lacey said. “CDF understands that the longer the borrower has their head above water, the greater chance they are to get a completed project.”

That understanding has resulted in hundreds of millions of dollars worth of projects being completed in communities throughout Greater Cincinnati that would never have gotten off the ground without CDF.


For more stories by Lucy May, go to . Follow her on Twitter @LucyMayCincy.