Sven Gatchev, right, Mercy Corps Northwest’s Community Investment Trust business analyst, talks to attendees at the opening ceremonies announcing the creation of the Community Investment Trust last month.
COURTESY MERCY CORPS NORTHWEST/ANGELA HOLM PHOTOGRAPHY
Mercy Corps Northwest has launched a program that it hopes will become a model for community financial development nationwide. Described as a “low-dollar, tangible and safe opportunity for all people to collectively own a piece of a thriving commercial real estate property in their own community,” the Community Investment Trust is a form of real estate investment trust. Tangibly, it is Plaza 122, a nondescript business park on a bland stretch of Southeast 122nd Avenue near the intersection with Southeast Market Street.
Mercy Corps Northwest bought the U-shaped strip mall–style business center in 2014, reportedly for $1.2 million, after several years of preparations and planning that included attempts to buy at least one other property. Mercy Corps stabilized the complex, raising occupancy from 60 to 90 percent. With the help of pro bono lawyers, the trust was formed. Opening ceremonies were held April 25.
To take part in the trust, an investor must live in the surrounding areas with a zip code of 97216, 97230, 97233 or 97236. The investor also must be at least 18 years old and have a tax ID number and bank account. After attending an informational meeting and a short series of courses titled “Moving from Owing to Owning,” the investor signs up to pay $10, $25, $50 or $100 per month into the trust. Besides equity, investors receive a dividend if the property turns a profit in a year.
No one is going to get rich from the trust, acknowledged Sven Gatchev, Mercy Corps’ Community Investment Trust business analyst, but there are nonetheless rewards. Participants will be better off financially for having saved up funds. Furthermore, they will have created an asset. Traditionally, Gatchev pointed out, Americans’ biggest assets have been their homes. Renters, who make up 60 percent of the residents of the trust’s inclusion zone, have fewer options for building assets.
Organizers hope to see a rise in civic engagement as well. “People wanted to be part of something bigger, but they didn’t have the opportunity,” Gatchev said. He called the trust an “on-ramp to financial stability and inclusion.”
Plaza 122 on Southeast 122nd Avenue was recently purchased by Mercy Corps Northwest and converted into a Community Investment Trust. The CIT lets only a geographically specific group of people invest anywhere from $10 to $100 a month towards ownership of the property.
COURTESY MERCY CORPS NORTHWEST/ANGELA HOLM PHOTOGRAPHY
The 29,000-square-foot building has 27 tenants that are a combination of businesses and nonprofits. They include Morpheus Youth Project, which is involved in gang prevention, and Pathfinders of Oregon, which helps former convicts. There is also a taxi company, an insurance office, a hair salon, a trumpet maker and other businesses.
Interest in the trust has been high, Gatchev said, and there has been outreach to the community’s Somali, Vietnamese, Spanish, Arabic and Russian speakers. Projections are for the trust to reach its capacity in the next four to five years with between 300 and 500 members.
“I think this is one of the best things that ever could happen,” trust participant Germaine Flentroy said at the opening. “And I believe that this is [a] community [effort] because, like they say, it is truly going to take a village.”
Mercy Corps also has high hopes for the project, which is a brainchild of Mercy Corps Northwest executive director John Haines. Gatchev, who has a master’s of business administration in sustainable business practices from the University of Oregon, was hired specially to work on the trust. The trust is the first of its kind, Gatchev said, and the goal is for the trust to prove itself, then be replicated city-wide, then state-wide, and eventually on a nationwide scale.
More information about the Community Investment Trust can be found on the organization’s Facebook page at facebook.com/InvestCIT/ or by contacting cit@mercycorpsnw.org or 503-896-5073.
Mercy Corps Northwest
According to its website, “Mercy Corps Northwest is committed to assisting low-income citizens of Oregon and Washington to create more productive, secure and satisfying lives for themselves, their families and their communities. We support them in increasing their economic self-sufficiency and community integration by providing resources and support in their efforts to improve their lives.
“Our clients are 55 percent male and 44 percent female. In our small business programs, 63 percent of clients identify as female. 39 percent of our clients come from Hispanic, African-American, Asian, American Indian and other minority communities. The majority of MCNW clients live at, or slightly above, the federal poverty line and below 80 percent of Median Family Income (MFI). Rarely do our clients’ incomes exceed 200 percent of the prevailing U.S. government poverty rate.”
