The Trust has been developing concepts on how to utilize tools that other foundations across the country use in terms of Program Related Investments. Staff and Trustees have participated in trainings around this topic through the Philanthropy Northwest network. There are many models of use for PRIs, including two that are actively under consideration:
- A “holding entity” model where the Trust may acquire a desired property in order to hold this for a programmatic use by a partner. The Trust can then include the property in a process of distributing funding for programs (i.e. through a Request for Proposal (RFP) process tied to housing programs or other social service programs such as Alaska Psychiatric Institute – discharge planning). This is a unique approach to developing a program with a specific site in the planning process.
- The Trust may also develop a loan program – low interest rates to assist non-profit partners in achieving goals that are not available through traditional lending channels. Supported housing for Trust beneficiaries is a good example for this type of finance because the resident rental income is quite low given the poor economic status of the population. Therefore, traditional banking institutions have a hard time participating in the financing of these populations and we see fewer housing organizations able to sponsor programs for these very low income Trust beneficiaries.
The Trust has discussed utilizing one of these two mechanisms to assist in development of more housing for beneficiaries that are at or below 50% of area median income. (Those on the income-rental chart above that have incomes between $12-15,000 annually). In these two scenarios, the principle utilized by the Program Related Investment must be repaid into the Trust. Ultimately, ACMHS will apply for funding from housing and private foundations to own the facility. The Trust assistance will help bridge the financing so the project can move forward.
These two mechanisms for assisting with the purchase of the Long House Hotel were discussed by Trustees at the Resource Management Committee meeting on Jan 3, 2013 and then again at a Trustee retreat on January 4, 2013. The discussion focused on how the processes might work in terms of making the loan and/or acquisition of a property. Since these are new concepts, much is to be learned about the procedures necessary. No decisions were made; however, staff was directed to put a proposal together for Trustee review at the next board meeting January 30, 2013. The Trust Finance Committee will review the proposal and make a recommendation to the full Board of Trustees if acceptable.
Once The Trust has established a process and the ultimate configuration of assistance to ACMHS and is able to answer more detailed questions, the plan is to do community forums and education including community outreach, meeting with local churches, contacting businesses in the area and continuing updates to the Spenard and Turnagain Community Councils on a monthly basis.
The Project Manager and point person for ACMHS will be John Sperbeck.
Mr. Sperbeck’s planning includes the development of an advisory council consisting of stakeholders which will include community and consumer participation.
Mr. Sperbeck will publish project progress through the ACMHS website. Any questions submitted will be answered and posted on the website.
The development of a definitive agreement between The Trust and ACMHS is expected to be completed by August – September 2013.
ACMHS is seeking funding to support this venture.
The grand opening was projected for May 2014. Lack of full funding to date has delayed the start of the project. A new timeline is in development. Purchase and rehabilitation of the property is predicated on obtaining the level of funding for ACMHS to continue development.
* Please note this timeline is an estimate. Many variables exist and may alter the tentative schedule.