$130 Million Initiative Comes at Critical Time as Health Centers Anticipate Surge in Demand for Care
New York, March 18 – The Goldman Sachs Urban Investment Group, The Kresge Foundation, Low Income Investment Fund (LIIF), Primary Care Development Corporation (PCDC), Rockefeller Foundation and The Reinvestment Fund (TRF) announced a new partnership today to finance the expansion of community health centers, bringing critical capital to help meet the growing healthcare needs of low-income communities. The Collaborative for Healthy Communities (the Collaborative) is a $130 million, three-year national initiative that will provide a new source of capital for community health centers across the country from a diverse set of actors. The Collaborative includes senior loan capital from the Goldman Sachs Urban Investment Group and the three community lenders (LIIF, PCDC and TRF), subordinate loan capital from the Rockefeller Foundation and credit enhancement from Kresge. The $130 million in investments through the initiative will include $55 million in debt and $75 million in tax credits and other subsidies.
Community health centers provide quality primary and preventive care to some 22 million people in underserved, low-income communities nationally. Demand for health centers is on the rise, driven by the growth of newly insured patients through the Affordable Care Act, particularly through Medicaid expansion. An estimated 35 million patients are expected to use community health centers by 2020 – marking a 59 percent increase in just six years. Yet, many health centers lack access to the affordable capital necessary to expand their facilities and meet growing demand in their communities. The Collaborative will provide affordable, flexible financing solutions to meet this need.
The formation of the Collaborative builds on the success of a $25 million demonstration project created by LIIF, TRF and Kresge in 2012. That partnership financed health centers in Washington, New Jersey and Pennsylvania and provided an opportunity for the lenders to better understand the underwriting issues, credit quality and community connections of federally qualified health centers.
“As more and more Americans gain access to health insurance coverage, the need for local community health centers will be more critical than ever,” said Brinda Ganguly, Associate Director, The Rockefeller Foundation. “The Rockefeller Foundation looks for opportunities to use capital to address dynamic problems and to encourage additional investments in impact driven work. We look forward to seeing the potential impact that this partnership will have on the growth of community health centers, and ultimately the health of all Americans.”
“The expansion of health centers in low-income communities will meet the growing demand for affordable primary care across the country, particularly in medically underserved neighborhoods,” said Margaret Warden, Vice President in the Goldman Sachs Urban Investment Group. “We are pleased to work with such strong partners to build healthy communities and create jobs nationwide.”
A national philanthropy long known for grantmaking, Kresge also makes loans, loan guarantees and other program-related investments. “Community health centers are on the frontlines of reducing health disparities,” said Kimberlee Cornett, who leads Kresge’s Social Investment Practice. “We’re extremely pleased that a 2012 partnership with the LIIF and TRF helped health centers in three states grow and demonstrated the value and feasibility of a fund like this.”
LIIF, PCDC and TRF are nationally recognized community development financial institutions (CDFIs) that are committed to building healthy families and communities by connecting health and social services, spurring local economic revitalization, creating jobs, and partnering with local businesses, nonprofits and the public sector to support the full spectrum of health needs in a community.
LIIF President and CEO Nancy O. Andrews said, “The Low Income Investment Fund is proud to be working alongside the exceptional partners in the Collaborative to invest in healthier, more vibrant communities. LIIF understands that enabling families and communities to truly thrive means connecting efforts in the health sector to community development, housing, health food access, education and economic opportunity. Through the Collaborative, LIIF will finance projects that are hubs for wellness in their communities and tie health to people’s lives beyond the doctor’s office.”
“We applaud Goldman Sachs, Kresge Foundation and Rockefeller Foundation for recognizing that there is a huge need in this sector,” said TRF CEO Don Hinkle-Brown. “Their support will enable this initiative to increase access to health care in many low-income communities, while spurring economic growth through new jobs and revitalization. But most importantly, this initiative will help community health centers increase the vital services needed to build and sustain healthy communities.”
“With demand for capital to expand health centers far outstripping any one lender’s financing capacity, forging partnerships is essential to helping health centers serve ever-increasing numbers of patients,” said Ronda Kotelchuck, CEO of PCDC. “PCDC is delighted to bring its 20 years of health center lending expertise to a partnership with LIIF and TRF – two outstanding CDFIs, and we are grateful that Goldman Sachs, Kresge Foundation and Rockefeller Foundation are investing in this important initiative.”
The Collaborative will invest in Federally Qualified Health Centers (FQHC) and FQHC look-alikes where at least 80% of patients earn less than 200% of the Federal Poverty Level. The Collaborative partners project that the initiative will enable health centers to support an additional 377,000 annual patient visits and preserve or create over 1,300 jobs nationwide. The Collaborative will provide a range of financing solutions for health centers, including acquisition, construction and permanent financing, loans to bridge HRSA funds or other government grants, and New Markets Tax Credit financing.
One of the first projects the Collaborative supported is Progressive Community Health Center (PCHC) in Milwaukee, Wisconsin, which has seen its patient volume double to more than 30,000 over the last six years. With two-month waits for new appointments, PCHC has been in dire need of expansion. Financing from the Collaborative is helping PCHC build a new 42,000-square-foot, three-story health center with 43 exam rooms and dental chairs. The new modern and efficient facility will allow PCHC to serve 60,000 patients annually.
About the Goldman Sachs Urban Investment Group
Established in 2001, the Urban Investment Group deploys the firm’s capital by making investments and loans that benefit urban communities. Through its comprehensive community development platform, UIG is a catalyst in the revitalization of underserved neighborhoods. UIG has committed more than $3.0 billion, facilitating the creation and preservation of approximately 13,000 housing units – the majority of which are affordable to low, moderate and middle-income families – as well as over 1,300,000 square feet of community facility and nearly 2,000,000 square feet of commercial and retail space.
About The Kresge Foundation
The Kresge Foundation is a $3 billion private, national foundation that works to expand opportunities in America’s cities through grantmaking and investing in arts and culture, education, environment, health, human services and community development efforts in Detroit. In 2013, the Board of Trustees approved 316 awards totaling $122 million; $144 million was paid out to grantees over the course of the year. In addition, its Social Investment Practice made commitments totaling $16 million in 2013. For more information, visit kresge.org.
About the Low Income Investment Fund
The Low Income Investment Fund (LIIF) invests capital to support healthy families and communities. Since 1984, LIIF has served 1.7 million people by investing $1.5 billion. Over its history, LIIF has provided financing and technical assistance to create and preserve affordable housing, child care centers, schools, healthy food retail, health clinics and transit-oriented development in distressed neighborhoods nationwide. LIIF’s work has generated $33 billion in family income and societal benefits. LIIF has offices in San Francisco, Los Angeles, New York City and Washington, D.C. For more information about LIIF, visit www.liifund.org.
About Primary Care Development Corporation
The Primary Care Development Corporation (PCDC) is dedicated to transforming and expanding primary care in underserved communities to improve health outcomes, reduce disparities and lower healthcare costs. PCDC achieves its mission through affordable financing to build and modernize facilities; coaching and training to strengthen care delivery; and public advocacy to support primary care policy initiatives. Since 1993, PCDC has created investment of more than $489 million in over 100 capital projects, developing or preserving 925,000 square feet of primary care capacity to provide 2.3 million annual visits to 725,000 patients, and creating more than 4,800 jobs. PCDC is also the lender coordinator for the HRSA Community Health Center Loan Guarantee Program, has helped more than 900 primary care organizations strengthen their capacity, and has successfully advocated for policies and public investment to build a sustainable primary care sector. For more information about PCDC visit www.pcdc.org.
About The Reinvestment Fund
TRF is a national leader in rebuilding America’s distressed towns and cities, through the innovative use of capital and information. TRF has invested $1.3 billion in mid-Atlantic communities since 1985. A CDFI, TRF finances a variety of projects and activities including food access, health care, education and housing, to build healthy communities in under-invested places. TRF also provides public policy expertise by helping clients create actionable solutions and by sharing data and analysis via www.PolicyMap.com. To learn more about TRF, visit www.trfund.com.
About The Rockefeller Foundation
For more than 100 years, The Rockefeller Foundation’s mission has been to promote the well-being of humanity throughout the world. Today, The Rockefeller Foundation pursues this mission through dual goals: advancing inclusive economies that expand opportunities for more broadly shared prosperity, and building resilience by helping people, communities and institutions prepare for, withstand, and emerge stronger from acute shocks and chronic stresses. To achieve these goals, The Rockefeller Foundation works at the intersection of four focus areas – advance health, revalue ecosystems, secure livelihoods, and transform cities – to address the root causes of emerging challenges and create systemic change. Together with partners and grantees, The Rockefeller Foundation strives to catalyze and scale transformative innovations, create unlikely partnerships that span sectors, and take risks others cannot – or will not. To learn more, please visit www.rockefellerfoundation.org.
Goldman Sachs: Leslie Shribman, firstname.lastname@example.org, 212-902-5400
The Kresge Foundation: Judy McGovern, email@example.com, 248-502-0506
Low Income Investment Fund: Samantha Hojo, firstname.lastname@example.org, 415-489-6113
Primary Care Development Corporation: Cecilia Dougherty, email@example.com, 212-437-3939
The Reinvestment Fund: Kavita Vijayan, Kavita.Vijayan@trfund.com, 215-574-5893
The Rockefeller Foundation: Laura Gordon, firstname.lastname@example.org, 212-852-8216