The Northside Community Development Fund is now able to add almost a million dollars to its investment fund because of a federal grant and a commitment by the Rivers Casino.
Casino spokesman George Matta said that the Rivers Casino made a commitment to donate $1 million in June 2010 to the Northside Leadership Conference, the Fund’s parent organization, which allocated $300,000 of it to the NSCDF. The casino will donate $1 million for 3 years.
The Fund used that money to apply for a $600,000 federal grant through the U.S. Department of the Treasury’s Community Development Financial Institutions Fund.
The federal grant, combined with the casino commitment, should allow the NSCDF to finance about a dozen new businesses on the Northside, according to Mark Masterson, executive director of the Fund.
Mark Fatla, executive director at the Northside Leadership Conference, estimated that the grant and casino money increased the Fund’s lending capacity by about 15 percent.
“It’s the old adage, it takes money to get money,” Fatla said. “The casino commitment is what gave us the power to raise additional funds.”
Masterson said he expected the grant money to come through within the next 30 days, and that the fund would distribute it to businesses over the next six months.
He added that while there are few restrictions on what the fund can do with the money in terms of community development, it will probably continue its lending program rather than start any new ones.
“It looks like that’s going to be the best fit,” he said.
Masterson said that the fund has not made specific plans to lend out the federal money yet, and that it will depend on the businesses that apply. He said the fund has several pots of money, and businesses could potentially receive a loan from any one of them.
Scott Berman, spokesman for the CDFI Fund, said that the grant awarded the NSCDF normally would have been $300,000, but $90 million in Recovery Act funds allowed the CDFI Fund to waive certain application restrictions and double the amount of money awarded to each organization.
Normally, each organization would be required to match the federal grant dollar for dollar with non-federal money, Berman said, but because of the economic crisis the CDFI Fund waived that necessity.
“These institutions serve people who can’t walk into mainstream organizations,” Berman said, adding that they served an important function in their communities by lending to low-income individuals.
Matta said the Rivers Casino, which has a deal with the Penguins to provide $7.4 million a year over 30 years, will also contribute an annual $1 million for three years to the Hill District.
“The casino wants to be a good neighbor,” he said. “We’re hoping that this has become a positive and that economic development spurs from our being on the Northside and around the [hockey] arena.”
Berman said the application process for the CDFI Fund grant was very competitive. Out of 180 applicants, only 59 received awards.
The CDFI Fund sends each application to three different external reviewers who score the application based on the organization’s business plan and other criteria. CDFI Fund then does an internal review of applications and makes awards based on the highest scores. It sends out a debriefing letter to organizations that did not receive awards to give advice on what they need to improve.
Masterson said the fund has applied for this grant in years past and secured funding once or twice but said the Fund usually only applies for it every second or third year. He added that he expects the Fund will apply next year if the CDFI Fund again waives the dollar-for-dollar match requirement.
Five lending organizations in Pennsylvania received grants, Berman said, and two of them were in Pittsburgh, including the NSCDF. The other awardees were Bridgeway Capital in Pittsburgh, the Economic Opportunities fund in Philadelphia, The Reinvestment Fund in Philadelphia and the Progress Fund, which serves much of the tri-state area.
The Northside Chronicle is a for-profit subsidiary of the Northside Community Development Fund but will not receive funding from this grant.