Cleveland Development Advisors (CDA), an affiliate of GCP, will provided a $2.5 million bridge loan and a $5 million allocation of New Markets Tax Credits (NMTCs) to support the renovation of the nonprofit May Dugan Center in Cleveland’s Ohio City neighborhood. For over 50 years, May Dugan Center has provided comprehensive health and human service programs to primarily low-income people in need of basic needs, behavioral health counseling, community education services, preventative health care and more.
May Dugan’s current building, built nearly 50 years ago, is in need of significant repairs and upgrades to increase organizational capacity to meet the growing need for the their services. The 29,780 square foot facility will receive a nearly $7 million of improvements, including: new and upgraded HVAC systems; new elevators; electrical systems replacement and upgrades; and a building expansion of 500 square feet.
The project is expected to significantly grow the number of people served by May Dugan via its core programs. After completion, over 141,000 meals will be served annually to low-income and housing insecure individuals. May Dugan will also be able to increase services by 1,500 additional clients, bringing the total to over 7,500 individuals served in areas such as trauma recovery, counseling, and education. All programs will provide improved quality of service through the upgraded facilities.
Construction is set to begin in October 2022 and completed by the end of 2023. CDA’s allocation of NMTC equity bridges a gap in financing and will help leverage the impressive capital campaign May Dugan has undertaken to secure grants and gifts for the project. The provision of a $2.5 million bridge loan through the CDA-CRF loan fund will provide fluid capital, allowing the project to move forward while allowing campaign pledges and grants to be realized over time.
The May Dugan project was also made possible by the City of Cleveland’s willingness to sell the facility to the center for one dollar under a permanent deed restriction limiting use to community services for low- and moderate-income residents. This allowed May Dugan to leverage state capital dollars for the project and secure the site in perpetuity within the rapidly developing Ohio City neighborhood.
For the project, CDA again tapped the $50 million NMTC award it received in late 2021 from the U.S. Department of the Treasury Community Development Financial Institutions Fund. NMTCs were created by the federal government to attract private investment for catalytic projects that create positive economic impacts in Low Income Communities, such as workforce development, quality employment, and neighborhood revitalization. Over the history of the program, CDA has been awarded a total of $265 million in NMTCs.
The May Dugan project meets the goals of the NMTC program and advances CDA’s own strategic goals of increasing services to families, children and people in need; creating and retaining jobs; advancing overall community initiatives; and meeting neighborhood needs.
“The May Dugan Center has played an important role in serving Clevelanders in need for over 50 years, and their renovation and expansion project will add significant capacity that allows more community members to access their high-quality services,” said Yvette Ittu, President and CEO of CDA. “CDA is pleased to be part of the broad group of supporters who have helped make this impactful project possible by adding our bridge loan funds and our new markets tax credit capacity to the capital mix.”