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April 6, 2001
COLLINS CENTER HOPES INVESTMENT FUNDS WILL HELP
KICK-START REDEVELOPMENT IN
By Sharon Harvey Rosenberg
Urban redevelopment projects in Miami's Overtown section and neglected
Broward and West Palm Beach have come and gone.
But where many sponsors of those initiatives have failed, the Collins
Public Policy believes it has a plan that will succeed because it
intends to receive
a boost from private investors and developers.
The nonprofit organization, with offices in Miami, West Palm Beach and
is launching a series of investment funds - the South Florida Family of
Smart Growth Funds - to promote urban growth in selected downtrodden
areas of Miami-Dade,
Broward and Palm Beach counties. The fund organizers are trying to
raise over $200
"We're trying to bring the private investment dollars here," says
Butler, head of real estate development for the Collins Center. Whereas
development programs have been typically limited to the government and
groups, the Collins Center is trying to actively court the private
sector in an
effort to create programs that are sustainable and replicable, says
The Collins Center is trying to convince the private sector that it's
to "make money, while doing good," she says.
The Collins Center is backed with grants from the John D. and Catherine
Foundation, the Ford Foundation and the John. S. and James L. Knight
Established in 1988, the Collins Center is named for former Florida
Collins, who believed that a public-private partnership could research
viable programs to fix economic and quality of life problems in Florida.
The 31-member board of trustees includes attorney Joseph P. Klock in
office of Steel Hector & Davis, Miami-Dade State Attorney
Rundle, and Merrett Stierheim, former Miami-Dade County manager. Calls
board members were not returned by press time.
But Stierheim's wife, Judy Cannon Stierheim, said her husband supports
because "he definitely believes in professional management and quality
Developing "mixed-use, mixed-income" projects that are pedestrian
in South Florida is the mandate, says Butler.
To that end, the Collins Center is looking to launch three investment
the next 12 to 18 months.
The fund organizers hope to raise at least $10 million in grant money
for a Community
Land Trust Fund.
The fund's objective is to encourage private developers, community
groups and other investors to reinvest in older urban areas.
"A lot of developers are looking at these underdeveloped areas," said
Anthony Seijas, president of the Miami-Dade County division of Lennar
is part of Miami-based Lennar Corp. Redevelopment programs provide the
to improve the community while earning a profit, says Seijas.
"We're looking and we're considering joining the Collins Center in some
their pursuits," says Seijas. Lennar is bullish on the Collins Center
of its organizational structure and management team. Moreover, the
efforts to involve the private sector differentiates them from other
groups, he says.
At the minimum level, Lennar will continue to provide consulting
services to the
Collins Center. Lennar will also consider building sites for the
but there are no definite plans at this time, says Seijas.
In addition to courting the private sector, the Community Land Trust
local community groups, developers and others to purchase parcels of
land for redevelopment.
Through owning land earmarked for development, neighborhood development
retain a voice and an equity stake in the revitalization of urban
areas, says Butler.
By partially underwriting the land purchases with money from private
the Community Land Trust should "dramatically" lower the cost of
and reduce the displacement of existing residents who are typically
priced out of
reviving neighborhoods, she added.
Funds will also be used to clean up brownfields, environmentally
that developers typically shun.
The regional community trust will begin with Overtown - a minority
north of downtown Miami - and ultimately expand to Broward and Palm
The family of funds will also include an equity real estate fund, a
of money that will provide equity for developers that launch projects
neighborhoods. The fund organizers are hoping to raise $50 million to
in investments for that fund.
Collins Center hopes to lure developers into inner-city neighborhoods
an equity stake in development projects, thereby lowering the amount of
will need to finance a project. "Risk capital is the key," says
Petrey, an attorney with Holland & Knight and president of the
Petrey says that there are successful mixed-use, mixed-income
in Philadelphia and New Jersey and other areas of the country.
Fund-raising efforts will be aimed at pension funds, banks and private
Over the last year, Collins Center executives have had group and
with top executives from banks, pension funds and foundations.
In February, the Collins Center held a meeting with foundation chief
officers in San Francisco. Additionally, Collins Center executives are
in the process
of trying to plan a high-level meeting with regional bank chief
executives in Florida.
"We want their investment dollars," says Butler. To attract attendance
and participation at the meeting, the Collins Center is trying to line
up U.S. Secretary
of Treasury Paul H. O'Neill to speak at the event.
The South Florida equity fund is being modeled after a program launched
LA, a 2-year-old urban revitalization program in Los Angeles. Genesis
LA is a public-private
partnership that has already raised $80 million for a blind-pool real
"The model is being replicated in other parts of the country," said
Bradfield, a spokeswoman for Genesis LA. "It's been unique in the way
packaged everything. But what really sets it apart is its financing."
Genesis LA provides last-resort financing for properties that
normally shun, due to rehabilitation, clean-up and other costs related
inner-city sites. Genesis has 21 sites under development, and it runs
its own nonprofit
financing arm. It has also spun off a for-profit investment unit that
by a third party.
The institution is in the process of launching Genesis LA Growth
a for-profit fund that will provide venture capital, mezzanine
financing and subordinated
debt to technology and manufacturing companies that set up operations
in low- to
Executives from the Collins Center visited with Genesis LA officials
during a four-day
fact finding trip last year.
Collins Center executives are also trying to hire Belden Daniels, a
equity fund consultant who has launched similar projects in Los
Angeles, San Francisco,
Sacramento, Ireland and Israel, Petrey said.
Finally, the Collins Center is looking to launch a third funding pool,
Low Interest Loan Fund. Affordable financing for redevelopment will be
by area banks, with the Collins Center serving as a clearinghouse. The
target is $50 million to $100 million.
Web Published Thursday, April 5, 2001 Published in Daily Business
Review on: Thursday,
April 5, 2001