January 29, 2023

DIY Solver

I'm lovin Home Improvement

A training program for Philly’s Black and brown real estate developers just graduated its first class

6 min read

Looking around at all the construction happening in Philadelphia, a group of Black business leaders wondered why more projects weren’t being built by Black and brown developers.

So the collective — called Black Squirrel — started on a two-year mission to develop a training program for the often self-taught developers of color they knew were working in the city. Black Squirrel wanted to grow the businesses of developers who already had some experience renovating or building properties and support them throughout the actual development of projects. They envisioned an initiative to bridge the gap between programs for beginners and ones for developers of large commercial projects.

» READ MORE: Philly will try to diversify real estate development by offering resources and training

As Black Squirrel members began talking to people about their idea, partner Jim Burnett, executive director of the Philadelphia-based community development financial institution VestedIn, said more than half a dozen people told them, “You will never find enough people to participate in this initiative.”

But last week, at a party at Booker’s Restaurant & Bar in West Philadelphia, Black Squirrel celebrated the 15 men and women from 12 companies who have completed the 14-week training of the first phase of Philly RiSE, Black Squirrel’s accelerator for Black and brown real estate developers.

“Trust me,” Kevin Williams, a business development consultant and chief executive officer of Black Squirrel, told dozens of people gathered, “they’re gonna make a difference in this city.”

Participants aim to produce as many as 50 new residential housing units in Philadelphia, with at least 51% offered below market rate. Each company is responsible for coming up with $75,000, and the program will connect them with additional funding. Of the 12 companies, Black developers lead 10 and Asian developers lead two. Women run three.

Philly RiSE adds to attempts to diversify an industry that has historically excluded people of color. The city, for example, started a pilot program this year called the Minority Developer Program to help developers and contractors access public land and funding.

The Philly RiSE cohort will face its biggest test in January. That’s when the developers plan to start applying for city-owned land through the Philadelphia Land Bank. Industry watchers are waiting to see whether the cohort will succeed. Lack of land going to Black and brown developers helped spur the creation of Philly RiSE. The city does not track the demographics of those who receive public land but is working to create a tracking system, said a spokesperson for the Philadelphia Housing Development Corp. and the city Department of Planning and Development.

» READ MORE: Philly’s BIPOC entrepreneurs get new promises to fund businesses and correct a historical deficit

Black Squirrel — whose leadership team includes Burnett, Williams, business and investment adviser Thomas Webster, and West Philadelphia Corridor Collaborative president Jabari Jones plans to bring in additional developers for a new cohort next fall and wants to continue Philly RiSE for at least another four years.

“You potentially change the way the city is built and who’s building it,” Burnett said. The Black Squirrel team hopes to eventually bring their model to other cities.

Maleda Berhane, chief executive officer and cofounder of the development company AR Spruce, told cohort members at last week’s celebration that she was impressed with their “wealth of experience” and said Philly RiSE “fills gaps your career has not already filled for you.”

Participants “are experienced developers, but they’re missing a couple of things,” Burnett said. “They don’t have the networks that some white developers might have. They don’t have the capital. They haven’t been exposed to the process of getting properties out of the city’s inventory. … We wanted to design something that would provide those things.”

» READ MORE: Sixers owner invests $10M into Philly’s Mosaic in bid to build firm into Black-owned real estate juggernaut

AR Spruce will help guide the cohort in its next phase from concept to completion of projects.

During the training this fall, lawyers, lenders, investors, and developers shared their knowledge. In a case study, the cohort walked through the steps of what it takes to acquire and develop a property. Through online classes from the Urban Land Institute, participants learned how to work with contractors, project budgeting, and ins and outs of affordable housing.

Candis Pressley, founder and chief executive officer of Trinity Property Advisors, has a master’s in commercial real estate, but it wasn’t until joining Philly RiSE that she learned practical details such as project scheduling, she said. And the program taught the importance of assessing strengths and weaknesses and knowing when to delegate, she said.

Since she entered the program, she’s bought a former American Legion building in Northeast Philadelphia that she plans to turn into a space for some Philly businesses. She plans to finalize the purchase of a lot in South Philadelphia in February.

New construction is now at the top of her list of things to accomplish for one simple reason: “I’ve never done it.”

» READ MORE: Black real estate developers face barriers to growth. A $100M fund targeting Philly aims to assist them.

Mark Lawson already has tackled new construction. Lawson, who owns rentals throughout the city and buys and renovates properties through his development business ReNew, bought four lots in North Philadelphia a couple years ago and built single-family homes. Two have sold and two are on the market. He said he realized through experience that multifamily homes are more in demand where he built.

During the program, Lawson, who also is a real estate broker and owner of Diversified Realty Solutions, learned what he needs to do to scale his business and how building affordable housing can be profitable.

“It was like a godsend,” he said.

Philly RiSE came at the right time for Ibraheim Campbell, who formerly played in the National Football League. Campbell, a Philadelphia native and managing director at Soar City Development, has redevelopment experience but is looking to grow in development from the ground up. He said he wants to work with the city to develop vacant properties and provide more affordable housing.

Participating in Black Squirrel’s program “was a no-brainer when I saw what they were trying to accomplish,” Campbell said.

The city has taken steps to improve the process of getting city-owned vacant property, but it can still be confusing and challenging and is subject to political control. In a statement, PHDC, which partners with the Land Bank to manage public vacant land, said it is “committed to creating and expanding opportunities for Black and brown developers,” and cited its own Minority Developer Program.

“We recognize it will take a network of advocates to achieve our goal,” PHDC said.

Besides acquiring land, “access to capital is one of the highest hurdles any of these companies are going to face,” said Reco Owens, executive director of Neighborhood Progress Fund. The community development financial institution is one of three Black-owned institutions planning to provide financing to the cohort.

» READ MORE: New $100 million PHL GRIT fund launching to back Philly’s Black & Brown-owned businesses

When the developers identify properties they want to build on, Philly RiSE plans for them to talk meaningfully with community members.

“We want residents to understand they do have value,” Burnett said. “They can take ownership of what happens in their communities. And they don’t have to let us — even us — go in and do whatever we want.”

» READ MORE: How Chinatown got blindsided by a City Council bill that could have helped the 76ers build a new arena

Annie Henderson, owner of Dream Team Investments, has been a real estate agent and investor for 23 years and bought her first building, a triplex, in the 1990s. She’s now rehabbing side-by-side buildings in Cobbs Creek, and soaked up all the information she could during the first phase of Philly RiSE.

“This whole thing is just a privilege,” she said. “For people to invest in us and believe in us the way they do, it builds your confidence.”

Henderson, who also has worked as a loan officer, said she’s excited to add new construction to her resume, especially to help fill the city’s need for affordable housing.

“I want to be able to drive by and say, ‘I built that,’” she said.

Copyright © diysolver.com All rights reserved. | Newsphere by AF themes.