Philly Fund Looks To Diversify The Construction Industry
At a time when affordable housing and job markets are at a crisis point, one organization in Philadelphia is tackling the challenge head-on — and centering women developers of color in the process.
A $900,000 specialty fund from The Enterprise Center, a nonprofit that supports small and mid-sized businesses in low-income communities throughout the Philadelphia region, is hoping to build capacity for Black and Latina construction contractors in the city by providing capital at a below-market interest rate of 1%. Called the Grow Philadelphia Fund, the initiative is a partnership between The Enterprise Center, Brandywine Realty Trust and local public officials.
Ian Lawrence is the senior capital director at The Enterprise Center Capital Corporate, the organization's CDFI wing. He spoke with us about how the Grow Philadelphia Fund builds wealth in Black and Latina communities through long-lasting relationships.
Why is the Grow Philadelphia Fund focused on the construction space?
That's a fairly significant part of the economy in the greater Philadelphia area. There's a significant amount of construction happening not only in Center City, but also in West Philadelphia, where we are, and elsewhere, like the Navy Yard multi-build project. So the market is pretty focused on construction.
The other part of the Philadelphia fund is to build capacity so that the contractors can get on larger jobs. One of our long-time clients in development has been in the trenches working through their business and recently got a $10 million investment. So that's where we want our clients to go, getting that initial infusion of capital that allows them to build capacity and gain additional capital.
So you want to get people started and help them create a foothold in the market?
Right. With the Build Back Better Act, there's going to be a significant amount of construction work that occurs. We want to make sure our clients get an equitable portion of that work.
What do you look for in your partner contractors?
We are looking for complete buy-in. We are committed to really building a strong network of minority contractors to not only go out on their own, but also collaborate. That's a commitment across not only one or two years, but several years.
You also have the Innovate Capital Fund. How does that work in conjunction with the Grow Philadelphia Fund?
The Innovate Capital Fund is a $50 million equity fund that targets businesses in the growth stage, doing over a million dollars, and need capital to accelerate the growth.
So from startup to growth space companies, we want to provide initial equity and growth equity. We want to be an end-to-end capital provider, meaning we want to provide initial capital (Grow Philadelphia Fund) and any follow-on debt in the growth of the company and then in the growth stage provide growth equity (Innovate Capital Fund).