Change of Address: Ben Hecht pushes for social investment in America’s cities.
Interview by Jennifer Popovec
Ben Hecht is getting ready to celebrate his one-year anniversary as president CEO of Living Cities, a Washington, D.C.-based nonprofit organization that unites private foundations, financial institutions, and public agencies to broadly invest in cities across America.
It’s been a busy year for Hecht, who has a strong background in social investment. Before joining Living Cities, he founded One Economy Corp., a nonprofit organization that delivers high-speed Internet access to low-income people. Previously, Hecht was part of Enterprise Foundation, a Columbia, Md. based nonprofit that focuses on community development and affordable housing.
Under Hecht’s leadership, Living Cities is expanding beyond affordable housing. Armed with $110 million from its partners—the nonprofit’s largest financing commitment to date—Living Cities will invest the funds over the next three years in a number of community-building initiatives including workforce development, education and health initiatives, and asset building for urban residents.
What is the biggest impediment to investing in cities?
BH: There aren’t enough investment vehicles. One of our priorities is to build new vehicles to give investors “plug and play” options. For example, foundations have historically given money as grants, but there’s an opportunity to make very low-interest loans to nonprofit organizations instead of grants. Loan money comes back and can be redistributed, unlike grant money, which is gone once it’s given.
What kind of impact has the New Markets Tax Credit (NMTC) program had on urban areas?
BH: The needs we have far exceed any one funding source. It’s a layering process. We have low-income housing tax credits (LIHTC), but they are limited to housing. NMTCs allow people to invest in more broad commercial development. The greatest thing about these tax credits is that they bring equity and not debt.
The NMTC program is scheduled to expire at the end of 2008. Will the program be extended?
BH: We’re actively lobbying to expand the program. These tax credits are leveraged by private dollars many times over, and it’s been a very successful program. The program will likely expand for the same reason that the LIHTC program was made permanent. It’s not just the nonprofits asking for the program to be extended; the for-profits agree. There are so many federal programs where the two sides disagree, but in this case, both sides say NMTCs are a good investment for America.
What projects have used NMTCs successfully?
BH: My two favorite projects are the East Baltimore Lifesciences and Technology Park near Johns Hopkins University in Maryland and Midtown Global Market, an adaptive reuse of a former Sears building in Minneapolis into a marketplace providing a variety of ethnic food and merchandise. Johns Hopkins put up a chunk of its money to develop the 80-acre redevelopment. They needed equity and NMTCs were the perfect fuel to generate the rest of the money. For the Global Market, the nonprofit Neighborhood Development Center revitalized a vacant Sears building and helped local entrepreneurs start businesses.
