Activating Catalytic Capital in South Los Angeles
Originally published on July 23, 2024 by Impact Entrepreneur here. By Elizabeth Gilbert Kaetzel
Before officially kicking off the Mission Investors Exchange National Conference this May, smaller groups of attendees ventured into Los Angeles for a snapshot of impact investing in action. One of these groups gathered in South LA to hear how a unique partnership between investors, non-profits, and the local neighborhood is creating community wealth and sustainable development.
The off-site “Impact in Action” session highlighted community development initiatives focused on revitalizing South LA’s Vermont Corridor. One such project is Block X Block, a collaboration between Genesis LA, one of Los Angeles’ largest community development financial institutions, Community Coalition, a longstanding multiracial organizing institution in South Los Angeles, Pacoima Beautiful, and other partners. The project is a 10-year commitment to leverage patient investment capital, affordable lending, trusted developers, and community input for community transformation in both the Vermont Corridor and Pacoima in the LA area.
Only blocks away from the Community Coalition office where attendees gathered, construction on the Evermont development is in full swing. Another project financed in part by Genesis LA, Evermont is situated along the Vermont Corridor, and involved collaboration among several of the same partners involved with Block X Block. Previously the lot had been vacant since the 1992 civil uprisings. When completed, the space will include 180 affordable housing units, grocery and commercial retail, a transit plaza, and a charter school. Evermont will bring significant resources and opportunities to the surrounding community, the product of collaborative decision-making and creative financing.
Leading the panel discussion, Tom DeSimone, President and CEO of Genesis LA, offered a few key takeaways from Evermont and Block X Block that investors can apply to other place-based initiatives.
Seed the initiative
A key partner of the Block X Block project, The California Endowment (TCE) granted Genesis LA $3 million in addition to their $10 million debt investment to pay for the hiring and infrastructure setup the project required. For the Evermont project, Genesis financed the $72.4 million development with a combination of New Market Tax Credits and other public and private funders.
Be patient
In a world where buildings seem to go up seemingly overnight, South LA had already waited 30 years for a developer to make the most of the Evermont lot. Patient capital allowed collaborators to take the time they needed to find the right partners and get community buy-in.
Lead with trust
For community-driven projects like Evermont and Block X Block, patience and trust go hand in hand. Block X Block aims to bring sustainable development into the neighborhood while also prioritizing community engagement and reducing displacement. This is a tall order, and it requires partners to trust each other through the process. Foundations must trust their investees, and developers have to listen to and trust the community.
Be patient
In a world where buildings seem to go up seemingly overnight, South LA had already waited 30 years for a developer to make the most of the Evermont lot. Patient capital allowed collaborators to take the time they needed to find the right partners and get community buy-in.
Lead with trust
For community-driven projects like Evermont and Block X Block, patience and trust go hand in hand. Block X Block aims to bring sustainable development into the neighborhood while also prioritizing community engagement and reducing displacement. This is a tall order, and it requires partners to trust each other through the process. Foundations must trust their investees, and developers have to listen to and trust the community.
“It begins by listening to community partners, transferring the power to lead to communities, and supporting this change by connecting communities with the appropriate technical expertise needed to execute on their goals,” shared Aifuwa J. Ehigiator, PRI Investment Officer at The California Endowment. “We see this as a form of trust-based impact investing. The trust that needs to be built because of this work will take time and may require a grant to support the time it takes for a lead to convene and support the development trust. When we imbue trust and equity into the process, communities build power on their terms.”
Look beyond traditional networks
For investors looking to build movements and sustainable community development, DeSimone also emphasized the importance of bringing community members into the process. Non-traditional financial organizations can act as trusted partners and liaisons between community organizations and larger sources of public and private funding.
“Evermont is an example of the passion and impact that community brings when it has a seat at the table,” shared Óscar Alvarez, Senior Manager of Community Planning at Community Coalition during the panel discussion.
Impact in action
All of these elements come together in the success of the Evermont development, and nowhere was that clearer than through the story of their partnership with Target. Evermont will be the home of the neighborhood’s first Target, but shoppers won’t find a Starbucks there. Although Target is known for having Starbucks in all its stores, the Vermont Corridor location will instead house South LA Cafe, a locally owned neighborhood favorite.
Joe Ward-Wallace, Co-Founder of South LA Cafe, spoke to session attendees about the long process of working with Target and Evermont developer Primestor to make this unique partnership happen. Unlike many other grocery retailers the team reached out to, Target was not only interested in the economic potential of the neighborhood but also committed to the vision for Evermont. After years of negotiating the terms, meetings with frustrated community members, and fine tuning the details, Joe is ready to begin selling coffee to friends and neighbors in his new location.
Block X Block will build on learnings from the Evermont project to continue community-driven development in South LA.
“While the [Block X Block] project involves grant capital, loan capital, and coordination that will support the redevelopment of real estate, the work all comes together to support self-determination and dignity for the people who live in these communities. This is what makes the work rewarding and one of the most important impact outcomes of the partnership,” summarized Ehigiator.
The Impact in Action session served as an excellent framing for the MIE conference overall which similarly focused on themes of collaboration and the impact of patient, catalytic capital. Driving past the Evermont site after hearing the story of Block X Block made a meaningful end to the session, bringing the story to life and hopefully inspiring investors to return and invest in their own communities.
“As we emphasized in our programming, inclusive investing is not just about financial returns but about embedding community voice into the heart of mission investing,” shared Nicholas Almeida, Chief Operating Officer at Mission Investors Exchange. “Our participants left inspired and equipped with innovative strategies to advance equitable, inclusive, and sustainable development in their own communities. This mirrors the spirit of collaboration and community empowerment seen at the Evermont development, underscoring the vital role of community input in shaping impactful investment outcomes.”
