Our bank has a large (>1 million) construction loan to a health services business to build a new office and surgery center. The office and surgery center is being built in a high income census tract. The clinic/surgery center will produce numerous new jobs with varying incomes and will draw customers and $ from a wide regional area. The City/County has issued a letter of intent to issue IRBs for the health services business at completion of the building. Our bank will then refinance the bonds. If the City/County economic strategy is to bring in service businesses from outside the area and/or to help expand local businesses which may have regional customers, shouldn't we be able to get community development loan credit for both of these loans? If so, what do I need to document? This is going to have a huge effect on our community. Even if the majority of jobs were middle and upper incomes, this will increase the average wage here which is currently below the national average.

This looks familiar It just showed up on my work email this morning. Apparently the term "refinance" caused our nifty new spam monitor to grab it and keep it in the big black hole we call "spam". Someone finally sent it on to me this morning. Makes sense huh? I mean how many emails to bankers would includes evil words like "refinance"

So here is the answer cut and pasted from my email (I wasn't done so I'll finish here)

(Since you're anon I'll leave your name off G)

This loan is a great example of the type of loan the proposed CRA regulation will allow, but at this point, you have to do some leg work to really make it work. It's worth the effort.

I have a similar deal that was approved last year by the examiners. Here is my write up (in brief, names changed to protect the innocent)

Purpose of the loan funds was to construct a four story medical building adjacent to the current location of Named Hospital. Located in one of only two middle-income census tracts within the Renaissance Zone, and the only middle-income tract in the Empowerment Zone, the addition of this building provides much needed jobs to residents of the community as well as additional medical services through specialty physicians moving into the building. This building being of the stable nature of a hospital facility provides Community Stability/Revitalization within the local area, a specified goal of the municipality. The addition of a new hospital building encourages additional businesses to locate in the area, turning what was a run down group of empty lots in the middle of the tract, into office spaces. The building space will house high-income professionals in the medical field, but also attracts support positions for less skilled labor as well as building maintenance and facility support positions. Under the Empowerment Zone requirements, simply the creation of jobs, and particularly jobs with higher incomes, within a designated zone, qualifies the development/employer for special status because of the creation of a higher economic benefit to the adjacent areas. The building meets with the Municipalities goals for the area being located in a Renaissance Zone as well, a group of tracts within the muni chosen due to a higher need for focus on revitalization. The additional Empowerment Zone goals stated in the Municipalities plan were also met due to the fact that this building “Provides a well-located sites for health care facilities for current and future needs”. (The building was built with the needs of the next 7 to 10 years in mind).

The hospital was also able to provide anticipated client base data with their request. While the hospital will expect to serve the middle income tract it is located in, it will be the only hospital in the municipality providing two specialty services (one involving surgical procedures, the other radiology) which will provided to residents throughout the state. In the current location, medicade billing for these specialties runs in the 60 to 75% level for these services annually. In addition, the hospital bills approximately 54% medicade for services provided through the emergency services sector. While the value to the community was the focus of this CD loan, it is apparent that the hospital also provides significant value to LMI individuals in the greater community.

I included muni documents with the write up, showing the goals for the two zones. It sounds like your community also has a focus. Is it defined? and able to be included in your write up?