504 ACE LOAN FUND I
LOS ANGELES LDC, INC. – A COMMUNITY DEVELOPMENT ENTITY
501 [C][3]
Community Development Loan Fund
Los Angeles LDC, Inc. Sponsor
504 ACE LOAN FUND I
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Mission: To provide lenders with a community development
loan transaction collateralized by seasoned commercial real
estate loans for owner occupied community facilities.
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Business: Community development loan fund specializing in
financing real estate loans to qualified borrowers that serve
and/or located in low income communities.
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Goal: Other alternative capital source to the SBA 504 program
and targeted towards 501[C][3] organizations.
Los Angeles LDC, Inc. Sponsor
Target Market Segments
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Commercial property owners: Owners of small commercial
properties located in low income communities.
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Minority and women businesses: Domestic firms serving
emerging markets or located in expanding industry clusters.
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Tax Exempt Organizations: Nonprofit service providers with
facility needs in low income communities.
Los Angeles LDC, Inc. Sponsor
Fund History
The $10 Million 504 ACE Loan Fund I was launched in 2004 with 10
investors to fund and manage a portfolio community development
loans. The fund is managed LDC Management Services, LLC - a
wholly owned subsidiary of the Los Angeles LDC, Inc. – a non profit
501[c][3] community development financial institution (“CDFI”).
The 504 ACE Loan Fund I achieved full deployment in 2006 and has
seen its portfolio of loans performed without any losses or significant
delinquencies. Its member receive quarterly distributions of its
earnings and recapture of its initial investment as the Fund portfolio
runs off.
The Fund’s has experienced a high quality of profitability and
performance and its portfolio has been reduced to 3 loans and
$1,300,000.
Los Angeles LDC, Inc. Sponsor
Financial History
2008
2009
2010
2011
204,172
237,744
109,224
129,185
Notes Receivables
2,262,838
2,167,197
1,489,374 1,397,576
Total Assets
2,477,429
2,414,815
1,605,073 1,532,826
Member’s Equity
2,469,492
2,408,824
1,601,265 1,530,621
240,487
85,171
210,533
57,593
ROE
5.10
3.48
10.47
3.67
ROA
5.46
3.49
10.50
3.68
Cash
EBITDA
4 Year average ROA is 5.78% and average ROE is 5.68%
Los Angeles LDC, Inc. Sponsor
The Credit Request
Amount:
Term:
Amortization:
Payments:
Rate & Fees:
Collateral:
Timing:
$1.3MM less LDC’s equity
Seven years (7)
Not to exceed 20 years
Quarterly P+I
Competitive and market based
UCC Filing on all 504 LF I assets
with assignment of portfolio notes,
deeds of trust, and other loan documents
45-60 days
Los Angeles LDC, Inc. Sponsor
Portfolio Characteristics
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Seasoned “Performing” fixed rate notes
Secured by CA commercial real estate
Weighted average interest rate portfolio notes - 5.15%
Weighted average loan term portfolio notes - 91 months
Repayable monthly with P & I installments
Full recourse to portfolio borrowers
504 ACE Loan Fund cash flow coverage ratio 1.15:1
Los Angeles LDC, Inc. Sponsor
Portfolio Borrower
Characteristics
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Very mature 501[C][3] organizations
Minority Led Organizations
Primarily social service contractors
66% located in poverty (20+) census tracts
Providers to low income populations
Borrowing entity is located in CA Enterprise Zone
Lender’s FTB Net Interest Deduction is available
Los Angeles LDC, Inc. Sponsor
Flow of Funds
LDC MANAGEMENT SERVICES, LLC
Manager
Comerica Bank
Loan Collection
Services
Management
Fees & Profits
504 ACE LOAN FUND I, LLC
AADAP NOTE
211 LA NOTE
Community Development Entity
(Limited Liability Company)
Qualified Equity Investment
LENDER
Term Loan
Pmts
SEA NOTE
Los Angeles LDC, Inc. Sponsor
Collateral Summary
Appraised
Value
Sr Debt
Jr Debt
Total Debt
Equity
7/19/2005
$ 3,375,000
$ 808,333
$847,028
$ 1,655,361
$ 1,719,639
10/24/2005
$
730,000
$ 439,042
$
-
$
439,042
$
290,958
1/9/2002
$
550,000
$ 180,000
$
93,338
$
273,338
$
276,662
$ 4,655,000
$1,427,375
Borrower
Property Address
Date
211 LA (1)
526 W. Las Tunas
San Gabriel, CA
AADAP
13931 S Van Ness
Gardena, CA
9626 San Antonio
SEA Charter (2) Southgate, CA
$940,366
(1) $847,028 Jr. Debt due to Bank of Manhattan; (2) $180,000 Sr. Debt due Wells Fargo
Los Angeles LDC, Inc. Sponsor
$ 2,367,741
$ 2,287259
211 LA – San Gabriel Office
211 LA County is a private, nonprofit 501(c)(3) organization, formerly known
as INFO LINE of Los Angeles. It is the largest information and referral (I&R)
service in the nation, helping approximately 500,000 individuals and families in
Los Angeles County each year, and is recognized nationally, throughout the
state, and in Canada for its leadership in the field. Since 1981, 211 LA County
has provided free, confidential services 24 hours a day, 7 days a week in
English, Spanish and more than 140 other languages via a tele-interpreting
service. Services are also provided for individuals with hearing impairments.
Our service functions as a gateway to the county’s vast and complex social
service delivery system. 211 LA County links ALL Los Angeles County
residents to services that strengthen families and improve their economic
success; equips them to prepare their children for school; helps them find and
keep jobs with opportunities for advancement; helps them identify and gain
access to public benefits and subsidies; and increases their access to quality
health care. Professional community resource advisors help callers with critical
issues such as health care and substance abuse, domestic violence, shelter,
food, legal and financial assistance, programs for children and seniors and
different types of mental health services. Our community resource database
contains information on over 49,000 programs and services and is continuously
being updated to ensure that we provide the most current and accurate
information possible.
Los Angeles LDC, Inc. Sponsor
http://www.211la.org/?page_id=297
AADAP – Gardena Office
Forty years ago, during one hot summer, 31 Asian American youth died of
drug overdoses. As much as elder members of the community wanted to
believe their kids “did not do drugs” this epidemic in 1971 jolted the
community into a shocking reality. This was their kids, and something
needed to be done. The community organized, held meetings, talked to
youth who were working with youth, trying to figure out what was really
going on. What they realized was people in the Asian American community,
both young and old, had nowhere to go when it came to drug abuse. These
youth needed a place to belong and someone to talk to, someone who
understood their culture and family and could relate to what they were going
through. A proposal was written and submitted to the Federal Government
asking for funding for the first ever drug abuse program targeting Asian
Americans. The proposal was funded, and in 1972, the Asian American
Drug Abuse Program was born. Today, some 38 years later, AADAP
remains one of only two programs in the nation with a mission to target and
design services for Asian and Pacific Islanders with drug abuse problems.
Unfortunately some of the same problems facing Asian Pacific Americans
then are the same problems many are facing now. A whole new generation
of youth are still struggling with identity and a need to “fit in.” Asian
immigrant youth and adults bring with them a whole new set of problems, as
they struggle with a new culture, language and way of living. For some,
drugs and alcohol are still a quick escape from pain. The problems of the
Nineties have also brought a whole new set of challenges. HIV/AIDS,
infants born exposed to drugs, people suffering from drug and mental health
problems, homelessness, youth in gangs…The need for AADAP is greater
than ever
Los Angeles LDC, Inc. Sponsor
http://www.aadapinc.org/about/locations/
SEA - Southgate Campus
Since 1972, Soledad Enrichment Action, Inc. (SEA) Education Centers
have provided high-risk youth and their families alternatives to gangs,
drugs and violence by providing them with alternative high school and
parenting education services, mental health therapy, drug & Alcohol
counseling, field trips and after school tutoring including arts and crafts
activities. The SEA Program was originally Founded in 1972 by
mothers from East Los Angeles whose sons had been killed by gang
violence.
The centerpiece of our program is the SEA Charter School, a
California Public Charter High School for high-risk youth. SEA's main
goal is to reduce school drop out rates and increase high school
graduation rates among high risk youth who have either been expelled
from or have dropped out of their home school and are likely to test
significantly below their peers academically. The youth that enter this
program do so with the knowledge that it is likely to be the last chance
they have as adolescents to turn their lives around. These youngsters
come from poor neighborhoods with entrenched gang structures. They
and their families tend to suffer from one or more afflictions including
poverty and unemployment, domestic violence, substance abuse,
cultural displacement, teen pregnancy, delinquency and lack of
education. SEA addresses the needs of youth in a holistic manner and
enlists the support and efforts of the entire family in solving the
problems of high-risk youth. We believe that as the family dynamic
becomes healthier and stronger, their children will be less likely to
engage in negative behavior.
http://www.seacharter.net/about_us/aboutUs.html
The SEA Charter School opened in August 18,
1997 after receiving the unanimous approval of its
special legislation by both houses of the
legislature, the signature of approval of Governor
Pete Wilson and final authorization by the Los
Angeles County Board of Education.
Los Angeles LDC, Inc. Sponsor
The Fund Purpose
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Provide community investments for CRA minded investors
Facilitate secondary market for Southern California
development loans
Provide liquidity for Community Development Financial
Institutions
Stimulate the flow of more capital into low- income
communities, small businesses and nonprofit
organizations
Los Angeles LDC, Inc. Sponsor
Los Angeles LDC, Inc. - Sponsor
Mission & Values
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Our mission is to provide the necessary human and
financial capital to promote the continuing development of
emerging or mature businesses and community based
organizations in our targeted markets.
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Our public benefit purpose requires that our financial
advisory services and capital shall be used to encourage
additional private investments and stimulate community
development in Low Income communities.
Los Angeles LDC, Inc. Sponsor
Description of the Sponsor
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Incorporated in California as a nonprofit 501(C)(3) public
benefit corporation
Licensed as a Commercial Finance Lender (CFL) by the
Department of Corporations of the State of California
Designated a Community Development Financial
Institution (CDFI) by US Treasury Department and CA
Department of Insurance
Licensed under U.S. Small Business Administration 504
program with Associate Development Company status
Los Angeles LDC, Inc. Sponsor
Summary
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Do you want community development loan?
Do you require or desire a secured investment?
Do you desire current income?
Do you desire market rate returns?
Do you desire assets with a proven track record?
Do you desire proven portfolio management?
Did you answer yes to these questions?
The 504 ACE LOAN FUND I is your best answer…
Los Angeles LDC, Inc. Sponsor