Denver to seek new contractor to manage community development financial institution
The Denver Office of Economic Development (OED) and Seedco Financial Services, Inc. today announced that they have reached a mutual agreement to not pursue a contract renewal at the end of 2009.
OED’s current contract with Seedco Financial expires on December 31, 2009. OED will seek a new financial partner to contract to operate the CDFI in 2010 and beyond. Seedco Financial has been contracted by the City since 2007 to operate Denver’s largest community development financial institution (CDFI). This CDFI effort provides loan financing for business start-up, expansion and development projects in distressed Denver neighborhoods.
“We are committed to finding future opportunities to promote economic development in our community and stimulate growth in our neighborhoods,” said Mayor John Hickenlooper. “Unfortunately, our partnership with Seedco Financial did not yield the results we expected. But we are confident we will develop new economic development strategies and continue to work our way out of this recession.”
“Now more than ever, providing access to capital is critical for our business and development community,” said OED Executive Director André Pettigrew. “CDFIs provide an innovative and proven method to leverage scarce community development resources into a much larger pool of funds for a given community. We look forward to bringing in a new organization to advance this financing mechanism for the Denver community.”
CDFIs are mission-based financial entities that provide equity and debt financing to projects that benefit low- and moderate-income people and fund projects that cannot secure sizable amounts of financing from conventional sources. They often serve as a conduit for private entities—including foundations, pension funds and individual social investors—that do not typically utilize government as a vehicle for investing in community projects. The Denver CDFI has leveraged capital from sources that are not currently investing in the Denver region.
Since 2007, Denver invested $3.6 million of its Community Development Block Grant funds into the CDFI. Seedco Financial has made 16 loans totaling $5.2 million throughout Denver. Through this CDFI partnership, Seedco Financial added more than $3 million in outside private funding to the Denver community.
OED officials and Seedco Financial are discussing the transition, including its Denver loan portfolio.
“We are committed to working with the city on a smooth transition, and firmly believe the loans we have made have created jobs and community aided development in Denver,” said Lesia Bates Moss, President of Seedco Financial. “We continue to make loans around the country that are essential to long-term business growth and stable economic development. Our projects make it possible for people to build roots – enabling entire communities to grow.”
OED officials will discuss the City’s direction for developing a Denver CDFI program and ensuring capital for Denver’s entrepreneurs and small businesses on November 10, at the city council’s Neighborhood, Community & Business Revitalization committee meeting.
The Denver Office of Economic Development is dedicated to advancing economic prosperity for the City of Denver, its businesses, neighborhoods and residents. Working with a wide variety of community partners, OED operates to create a local environment that stimulates balanced growth through job creation, business assistance, housing options, neighborhood redevelopment and the development of a skilled workforce.
Seedco Financial Services, Inc. (Seedco Financial) is a national Community Development Financial Institution (CDFI) with more than $200 million in assets under management. Filling niche gaps along the continuum of credit from micro-enterprise to New Market Tax Credits, Seedco Financial seeks to stimulate economic development in communities that are underserved by traditional banking institutions by providing affordable capital, hands-on technical assistance and innovative solutions to small businesses, nonprofit organizations, CDFIs and real estate developers. Seedco Financial is a wholly-controlled subsidiary of Structured Employment Economic Development Corporation (Seedco), a national nonprofit intermediary that helps low-income people and communities move toward economic prosperity. Learn more about Seedco Financial at www.seedcofinancial.org.