The CFC Process

Trusted Long Term Partner

 

Community Finance Corporation (CFC) takes a partnership approach to the development, financing, management and operations of its projects.  We carefully evaluate project opportunities against our charitable mission and the benefits the project will bring or maintain in the community it serves.  Our core values include proactive communication, collaboration and integrity.

We are very proud that the State of Arizona, Arizona State University and Clark County, NV have all entered into multiple projects with CFC, all of which were successfully financed, developed and managed.

Experience

 

CFC understands that when we enter into a project it is about more than real estate.  It is about understanding the ultimate goals of our governmental or nonprofit partner and building effective relationships.  Successful projects are built on strong partnerships among qualified organizations committed to the long-term success of the project over time. 

All proposed long-term partnerships are consistent with our overall business philosophy and values, economic development focus, and lessening the burdens of government community development mission.

Board Approval Process

Sub-investment grade debt

 

The CFC Board of Directors has no specific policies or processes beyond normal due diligence appropriate to evaluation of a new construction “pro-forma” revenue project, which may include review of third-party reports or other comparable data that confirms market demand.

CFC owns and operates a number of ground-up construction student housing projects and has effectively managed through both normal economic cycles, and more recently the COVID19 pandemic.

Project Approach

 

CFC’s approach to public-private partnerships blends tax-exempt debt with private development expertise. Typically the governmental entity will enter into a lease with a single purpose entity (SPE) created by CFC for the project. CFC will in turn obtain the necessary tax-exempt financing at the best possible rate and assist with the design, and construction of the facility.

Projects can be structured so that the development team is under contract to take construction and delivery/completion risk. After construction is complete, the governmental entity takes possession and begins paying rent. The base rent is set at a level equivalent to the debt service. Once the debt service is retired the project is transferred to the governmental client at no additional cost. The tax exempt debt and project structure have several attractive characteristics:

  • Off balance sheet financing to the governmental entity

  • Typically 100% financing at best possible interest rates

  • Real property tax abatement possible under state law

  • No impact on statuary debt limitations

  • Shifts construction and completion risk from the governmental entity to the development team