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SOCAP10: Jeff Randol, Cornerstone Ventures


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SOCAP10: Jeff Randol, Cornerstone Ventures

  1. 1. Urban Agriculture Centers Issues Examples Opportunities
  2. 2. Food Crisis in Food Deserts  Urban residents find it difficult to access local, healthy, and affordable foods  Hunger, malnutrition continue to increase  Lack of nutrition and costs for healthy, whole foods contributes to obesity and diabetes  Public funding and policy is inconsistent  Private capital is unresponsive
  3. 3. Urban Markets are Opportunities  Captive population  Large, unserved, subsidized consumer base -
  4. 4. Urban Agriculture Supports Economic Development Agendas  Job creation and retention  Increased tax base  Improved real estate values  Repurposing distressed properties and brownfields  Providing programs and support to disadvantaged populations  Improving peoples lives, financially, environmentally and physically
  5. 5. Examples: Cornerstone Ventures Harrisburg Health Center St. Louis Food Terminal
  6. 6. Harrisburg Health Center Market: an FQHC Partnership  Federally Qualified Health Centers see Food = Wellness  Serve targeted, large populations that meet poverty guidelines  Harrisburg Health Center – 34,000 clients + 7,000 WIC Families – 140,000 visits per year – 200+ onsite staff – Funding sources go beyond food and agriculture to healthcare – Expanding wellness program through Food and Nutrition Store  45,000 sf food processing, distribution and retail store  Local, fresh, healthy foods to disadvantaged population  Products and pricing targeted to market  Nutrition Education, Cooking Demonstrations
  7. 7. Financial Incentives  Qualifies for HRSA (Health Resources and Services Administration) loan guarantee  Property owned by Harrisburg Health Center  HHC will provide a turn key facility with working capital  HHC will contract for prepared foods  HHC will contract for nutrition education  Reward cards and discounts will be provided to HHC clients
  8. 8. St. Louis Food Terminal  29,000 sf Food Market featuring locally grown and produced products.  3,900 sf Market Café providing prepared and ready to eat foods from local products.  24,700 sf Food Processing and Distribution Facility that prepares and packages regionally produced food for citywide institutions.  20,000 sf roof-top Greenhouse Farm producing items for sale at Food Market and for processing by Food Processing Facility.
  9. 9. St. Louis Food Terminal Site Plan
  10. 10. Opportunities: St. Louis Food Terminal Benefits  Improved food security for a growing, underserved community  200+ new skilled and unskilled jobs  Increased tax base and property values  Education: Food, Agriculture & Nutrition  Reduction in the carbon footprint  Destination for tourism industry  Access to healthier and affordable food options for a large and diverse urban community  Products targeted to Food Pantry and regional institutions  Reduction of obesity and diabetes problems experienced by low-income urban residents
  11. 11. Funding Mix: St. Louis Food Terminal Tax Increment Financing $ 4,088,656 New Market Tax Credits $ 3,019,000 Missouri Development Finance Bank $ 1,500,000 Grants $ 2,500,000 Investors and Note Holders $ 2,637,682 Landlord Debt $ 3,500,000 TOTAL PROJECT COST $ 17,245,338
  12. 12. Opportunity: Return on Investment  Preferred Shareholders – Annual profit distributions = 15-20% ROI – Subordinate to Note Holders – Senior to other Shareholders  Convertible Note Holders – 8% annual interest + equity = 10-15% ROI – Secured by assets – Provision for conversion to equity
  13. 13. Funding Allocation: St. Louis Terminal Market and Greenhouse LLCs Public DebtPublic Debt $4,088,656 Tax Increment Financing and Improvement District paid by taxes from project $1,966,581 Landlord debt collateralized with land and building paid through lease $1,000,000 New Market Tax Credits $9,692,919 Allocated to the for-profit enterprise Public Investment Public Investment Private Investment Private Investment $2,637,682 Preferred Investors and Convertible Note Holders Private Debt Private Debt
  14. 14. Funding Allocation: St. Louis Terminal Processing Center 501 C(3) $1,533,419 Landlord debt collateralized with land and building and paid through lease $2,019,000 New Market Tax Credits $1,500,000 Missouri Development Finance Bank $7,552,419 Allocated to the non profit enterprise Public Investment Public Investment Private Investment Private Investment $2,500,000 Grants and Program Related Investments Private Debt Private Debt
  15. 15. Collaborative Efforts Align with Mission and ROI A for-profit aggregation and distribution business that is supported through food markets and processing facilities under the brand of Farm to Family Naturally. A for-profit grocery destination that provides consumers with locally grown and produced foods. A non-profit designed to advance economic, wellness and social self sufficiency for challenged people and communities by creating and operating educational and economic development programs. Community Advncement Services
  16. 16. History  October 2009. Farm to Family Naturally engages Cornerstone Ventures to restructure and develop social enterprises to achieve its mission.  February 2010. Cornerstone Ventures presents urban agriculture center concept.  March 2010. The site for St. Louis Food Terminal is contracted and the design/funding process begins.  May 2010. Impact Funders, LLC is created by Cornerstone Ventures to finance Social Enterprises dedicated to sustainable agriculture, food and wellness.  July 2010. Impact Funders provides a $400,000 loan to Farm to Family Naturally.  September 2010. Missouri Business Development Group, operating as a 501C(3) was restructured with the inclusion of Cornerstone Ventures and Farm to Family Naturally members and renamed Community Advancement Services. CAS will be the owner of the St. Louis Processing Facility and other related ventures.  Spring 2011. Groundbreaking scheduled.
  17. 17. Farm to Family Naturally Business Model  Aggregate and distribute locally produced foods  Support purchasing and distribution through Urban Agriculture and Food Centers  Expand distribution channels to schools, day cares, food pantries and other city institutions  Scale through FQHCs and regional aggregators and distributors of local foods
  18. 18.  Can be profitable  Can sell products and services that advance social good  Can provide market rate returns to investors  Can provide Security and Liquidity  Can be accountable to Stakeholders as well as Shareholders in efforts to meet double and triple bottom lines Social Enterprises MUST Serve Shareholders and Stakeholders
  19. 19. … we must learn to integrate the non-profit mission into a for-profit model. IF WE ARE TO SUCCEED…
  20. 20. Contact: Jeffrey D. Randol 215.768.4429 Doing well is the result of doing good! – Ralph Waldo Emerson