Building PA

Provides mezzanine capital for developers for real estate assets in small to mid-sized Pennsylvania communities.

Guidelines:

• Building PA Guidelines (Adobe PDF)

Uses:

Real estate development in small to mid-sized PA communities

Funding:

Variable

Eligibility:

Professional Investment Fund Managers through a Request for Qualification (RFQ)

Terms:

Program Guidelines to be approved and issued by Commonwealth Finance Authority. Visit www.newpa.com to confirm issuance. Upon approval, RFQ will be issued. RFQ criteria: Demonstrated capacity, for serving the PA marketplace, including specific geographic areas and/or market segments; Expertise in the proposed real estate sector; Expertise in range of investments demonstrated by experience and success with previous investments; Demonstrated capacity to attract additional investment for projects.

Where to Apply:

Through issuance of request for qualification (will be advertised in Pennsylvania Bulletin)

FAQs:

Why does Pennsylvania need a real estate development fund?

Real estate represents one of the Commonwealth's most important and valuable assets. It is a crucial platform for building Pennsylvania's economy and improving the lives of its citizens and the growth potential of its communities. Yet far too many projects never get completed. They line up two-thirds of the financing they need from traditional sources, only to hit a wall finding the final third. All too often such gaps in financing mean the difference between a successful community enhancement and an unused or abandoned site. With Building PA in place, we can use Commonwealth resources to close that funding gap, ensuring that Pennsylvania grows and competes successfully for new businesses, new housing and new jobs.

How much money will be invested through this account?

Building PA will provide $150 million in funding for the development of real estate assets within the Commonwealth. That $150 million will be matched by private investors and foundations looking to facilitate projects within the Commonwealth.

How will that money be used?

The resulting $300 million fund will provide mezzanine capital for developers seeking to redevelop and revitalize real estate assets in small to mid-sized Pennsylvania communities.

What is the ultimate goal of the program?

By creating a public/private partnership, this $300 million account will allow Pennsylvania to stimulate the marketplace, and close more deals. The goal is to encourage the undertaking of more projects, while creating a fund that will sustain itself for years to come.

Who will be in charge of Building PA?

The account will be managed jointly by the newly created Commonwealth Financing Authority and the Department of Community and Economic Development.

How will the fund be managed?

The Commonwealth Financing Authority will competitively solicit professional fund managers whose experience shows a solid track record of success in Pennsylvania. These qualified managers will make either debt or equity investments in specific and appropriate real estate projects.

How will real estate account managers be selected?

The Community Financing Authority will be responsible for refining the proposed fund manager selection process and approving the managers. In addition, a Request for Qualifications (RFQ) will be issued to the real estate investment community.

On what standards will the RFQ be based?

The RFQ will evaluate candidates based on a variety of criteria that will include:

• Demonstrated capacity, or clearly definable strategy, for serving the Pennsylvania marketplace, including specific geographic areas and/or market segments.
• Expertise in the proposed real estate sector. This includes the credentials and backgrounds of partners as well as previous success with the industry segment.
• Expertise in the range of investments that they are proposing demonstrated by experience and success with previous investments.
• Demonstrated capacity to attract additional investment for projects through syndication and other investment/funding opportunities.

Are there other screening standards to guarantee the suitability of the candidates?

Yes. In addition to meeting the criteria listed above, the selected prospective fund managers will undergo an independent evaluation by a third party. This evaluation would validate the firm's historic results, investment capacity, fundraising ability, and perform reference and background checks on each of the partners in the firm. This thorough review will allow the Commonwealth Financing Authority to appropriately and conservatively select a firm that meets the test of fiduciary responsibility.

It is important to consider that the goal and mission of the Commonwealth Financing Authority is to select a real estate investment firm that will utilize these funds as mezzanine capital to close on projects that have been historically underserved. The process outlined is designed to insure that each of the prospective managers is effectively screened and has a demonstrated ability to accomplish these goals.

Purpose of Funding:

• Infrastructure
• Site Development - Business