Businesses appeal to Bonamici to spare development fund from cuts
On a visit to the North Coast Tuesday, U.S. Rep. Suzanne Bonamici ate lunch in the upstairs dining room of the Bridgewater Bistro, a restaurant aided financially by Craft3 inside a building the nonprofit lender helped restore.
Surrounding her were other business owners gathered to share their stories of how Craft3 helped them. They asked for the congresswoman’s help to protect the funding Craft3 and similar community financiers depend on from cuts in Congress.
Craft3, which often takes on higher-risk financing projects than commercial banks, has since 1998 secured more than $11 million in competitive grants from the Community Development Financial Institutions Fund. The fund was established in 1994 to support economic revitalization and development among underserved communities.
The development resource, which received nearly $250 million this fiscal year, would face a 23 percent cut under a U.S. House budget proposal. President Donald Trump’s budget would ax the grant program entirely.
Walt Postlewait, executive vice president of Craft3, said that every $1 Craft3 receives from the fund helps leverage another $5 from banks, foundations and other investors to finance projects often too risky for commercial lenders.
“I would have never been able to open a business if it wasn’t for their help,” said Wendy Hemsley.
In 2014, Hemsley opened North Coast Medical Clinic, which now employs 11 people and provides both primary care and substance abuse services.
Hers was a common refrain among several business owners who told Bonamici how Craft3 took a chance on them. David Oser, chief financial officer for Craft3, said the group has invested $44.7 million in Bonamici’s congressional district over the past 23 years, helping create and retain more than 1,600 jobs.
“The only reason a bank lends money is to make money,” Postlewait said. “That is their sole purpose for lending. Craft3 … that is not our primary objective of lending.”
Postlewait said the willingness to take a risk on projects that support the community is what sets the Community Development Financial Institutions Fund apart from commercial banks.
“This is the type of thing we should be investing in,” Bonamici, D-Oregon, said of the fund. “Those investments that help your businesses grow are really important.”
Protect tax credits
Craft3 is also hoping for Bonamici’s help in protecting programs like New Markets Tax Credits. The program helps attract private capital to projects by providing investors credit on their federal income taxes in exchange for equity investments in community development institutions.
Craft3 has received $83 million in such tax credits since 2003. The credits have helped finance a tribal wellness center, an RV park, a Willapa Bay oyster company, an agricultural exports program at the Port of Grays Harbor and the redevelopment of Clatsop Community College’s main campus. Carl Seip, a Craft3 spokesman, said the lender has not received any New Markets Tax Credits since 2009, but often works with entities that use them to help leverage additional capital.
“Our message is not to get rid of some of these critical economic development programs,” Seip said.