The Community Foundation of Greater Fort Wayne is pouring $500,000 into the Electric Works project to rejuvenate the former General Electric west campus along Broadway south of downtown Fort Wayne.
Brad Little, the foundation's president and chief executive officer, said the money has been offered as “an investment,” not a grant.
“It's money we are expecting to see back with a return,” he said Friday afternoon in an interview with The Journal Gazette. “It's an investment in the project. It's not free money.”
Little said Kevan Biggs of developer RTM Ventures and others associated with the project approached the foundation early last year and returned in the fall with a $2 million request.
The foundation, however, was not legally able to meet that figure and “continue to do grant-making and other meaningful work in the community,” Little said.
But the developer was willing to accept a $500,000 investment as part of $10 million now being sought for the next phase of funding now that government commitments are mostly lined up, Little said.
The foundation's board voted for the figure in November, he said.
Little said this marks the second time the foundation has made an investment in a major development project rather than issue a grant. The first came earlier this year as a $1.2 million loan investment to The Landing project along Columbia Street downtown, he said.
Little said the terms of the Electric Works payback and its date remain subject to negotiation. As with The Landing, the transaction will be aided by the Downtown Development Trust chaired by Mac Parker, Little said.
“They (the trust) play middleman in terms of deals because we can't give money directly to a private developer. We have to work through another entity,” he said.
The foundation also would have an option to become an investment partner in the project at some point, Little said.
He called the approach – known in philanthropic circles as targeted investment – relatively new, both in the field and to the foundation.
“This is not something we've done every day. It is new to us, but the concept is gaining a little more traction in the foundation world,” Little said.
“Other foundations are doing similar types of investing and lending beyond normal grant-making, but you have to be careful because there are risks involved,” he said.
However, the foundation board believes in the “transformative” nature of the first phase of the $248 million project, and officials see the financing as a way to continue development momentum into Fort Wayne's future, Little said.
Kevin Erb, spokesman for the developers, said they are now approaching other foundations, institutional investors and individual investors for operating capital.
The money will get the campus ready for cleanup and remediation and aid “more robust leasing arrangements” to meet deadlines imposed by other funders, he said. The target date to start construction is sometime this summer, Erb said.
The first phase concentrates on the west campus and includes 712,000 square feet of space. The entire project includes 18 historic buildings on 39 acres, with over 1.2 million square feet of space aimed at office, educational, retail, residential, hotel and entertainment uses.
In a statement, Biggs said RTM is grateful for the foundation's support and looking forward to having the organization as a partner.
“With its deep knowledge and keen understanding of Allen County's most pressing needs, The Community Foundation board clearly recognizes how Electric Works will be a catalyst for community improvement,” he said.