AFL-CIO Investment Program Targets $750 Million Towards Chicago Housing, Economic Development
CHICAGO, July 26 -- AFL-CIO President John Sweeney and Chicago Mayor Richard Daley today announced a $750 million Chicago Community Investment Plan, an initiative to produce affordable housing, support economic development, promote homeownership for working families and create thousands of union construction jobs.
The innovative plan, which is spearheaded by the AFL-CIO Investment Program, will invest in Chicago projects over the next five years, and it is anticipated that their funding will leverage more than $1 billion in total investments. The AFL-CIO Investment Program is comprised of the AFL-CIO Housing Investment Trust (HIT) and the AFL-CIO Building Investment Trust (BIT).
“On behalf of the AFL-CIO Investment Program, I am pleased to announce this initiative,’’ said AFL-CIO President John Sweeney, who is a Trustee of the HIT and a member of the BIT Advisory Board. ”Chicago is one of our great union cities and union investment capital is a powerful tool for financing housing for America’s working families and helping build communities. This is the kind of creative initiative that can make a difference in people’s lives"
Mayor Daley also praised the investment plan. “We welcome this investment initiative to Chicago,” he said. “I am proud of our extraordinary progress in meeting our housing and community development goals but the magnitude of need requires new investment strategies and dedicated partners. This investment plan is compatible with my $1.9 billion Build. Preserve. Lead: Affordable Housing Agenda for Chicago’s Neighborhoods which is designed to create, preserve and assist 48,000 units of housing by 2008. Labor has stepped up to the plate in a big way for our wonderful city.”
Speaking on behalf of the BIT, Edward Kelly, Chairman and CEO of Mercantile Bankshares Corporation, said, “The AFL-CIO Building Investment Trust is proud to be part of the Chicago Community Investment Plan. The BIT has a long track record of successful Chicago investment. This initiative will take the next step in showing the power of labor’s capital to create jobs and build strong communities in the great city of Chicago.”
As part of the Investment Plan, the HIT and BIT will work closely with the City of Chicago, the Illinois Housing Development Authority (IHDA), local labor organizations, private developers and Chicago-based community and non-profit organizations to produce housing and support economic development.
“Labor is the driving force behind this great city,” said Dennis J. Gannon, President of the Chicago Federation of Labor, AFL-CIO which represents more than 500,000 union members. “Capital investments of unions can be put to work to create good jobs and make a better life for all of our citizens. I am proud to stand with the Mayor and Brother Sweeney in announcing this exciting program.”
The Chicago Community Investment Plan will focus specifically on the following critical housing and economic development needs:
-- Multifamily Housing -- $250 million in financing for the production or rehabilitation of rental housing in Chicago. In addition, special emphasis will be given to the production of affordable housing and housing for special needs groups.
-- Commercial and Economic Development -- $250 million for commercial real estate opportunities in Chicago through the BIT. The BIT will focus on identifying equity investment opportunities in new market-rate housing or mixed-use developments in the City of Chicago.
-- Homeownership for Working Families -- $250 million in home mortgages for union and municipal employees will be issued through the HIT HOME program. The HIT has partnered with Countrywide Home Loans and Fannie Mae to provide attractive home mortgage loans and homebuyer assistance to union families. Countrywide Home Loans is the nation’s largest independent residential mortgage lender and servicer.
The HIT and BIT have already made a downpayment on this initiative in the first half of 2005. The HIT has committed $37.8 million to five deals in the City of Chicago with a total development cost of $79.6 million creating 726 units of affordable housing in the city. The BIT has made a $70 million initial investment in the Lakeshore East Master Planned Development which gives the fund development options which could result in over 3,000 housing units and over $1 billion in development. In addition, the HIT HOME Program has already made 95 loans with a volume of $13.3 million in the Chicago Area this year.
The $750 Chicago Community Investment Plan is similar to the Investment Program’s New York City Community Investment Initiative which was launched after September 11, 2001. After only three and a half years, investments in New York total more than $650 million, including the financing of the first private development following 9/11.
Both the AFL-CIO Housing Investment Trust and AFL-CIO Building Investment Trust have been active investors in Chicago and the State of Illinois for many years.
-- The HIT, which invests primarily in multifamily and single family mortgage-backed securities, has invested more than $260 million in Chicago in the past 10 years, providing over 6,300 units of housing, half of which are affordable to low and moderate income families. Statewide, HIT has invested over $480 million to create nearly10,000 housing units. Twenty projects were financed in conjunction with IHDA including Chicago’s Northtown Village, Jackson Park Terrace, the Parkways and Alexian Village.
-- The HIT HOME Program has made 473 loans in the Chicago area since it was launched in June 2003 with a volume of almost $60 million.
-- The BIT, which does direct equity financing of apartments and commercial development, has committed $312 million over the past 10 years for investments in apartment and commercial real estate in the Chicago area. Most recently, in the Lakeshore East Master Planned Community, the BIT has invested $40 million in the Shoreham, a 47 story, 550 units, $113 million apartment complex that is currently under construction in downtown Chicago.
All projects financed by the HIT or BIT require the use of 100 percent union labor. HIT and BIT’s investment in Chicago over the past 10 years has resulted in a total of 6 million hours of union labor for construction and related trades.
“This is a program that will work for Chicago,” said Tom Villanova, President of the Chicago and Cook County Building and Construction Trades Council. “It benefits our union workers, helps the City, and builds much needed housing for Chicagoans from all walks of life.”
The AFL-CIO Housing Investment Trust (HIT) is a core-plus, fixed-income investment company registered with the Securities and Exchange Commission. The HIT has over 400 investors and approximately$3.6 billion in assets. The HIT invests primarily in fixed-income investments such as multifamily and single family mortgage-backed securities. While the investment objective of the HIT is to provide competitive returns for its investors, it also seeks to promote collateral objectives such as the construction of housing and to facilitate employment for union members in the construction trades and related industries. The HIT has invested over $4.5 billion to finance more than 75,000 units of housing nationwide generating thousands of union jobs. For more information, visit the AFL-CIO Housing Investment Trust website at www.aflcio-hit.com
The AFL-CIO Building Investment Trust (BIT) is a $2 billion pooled real estate fund serving pension plans with union member beneficiaries. It is managed by Mercantile-Safe Deposit and Trust Company and sponsored by the AFL-CIO. The mission of the BIT is to provide competitive risk -adjusted returns for its participants through its investments in institutional quality commercial real estate while promoting economic development and creating union jobs. Since its inception in 1988, the Trust has helped finance over $2 billion in real estate development across the United States. For more information, visit the AFL-CIO Building Investment Trust website at http://www.aflcio-bit.com
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