ABA Banking Journal - February 2008 - (Page 34)

COVER STORY ment activity is rarely a one-organization game, rarely a simple deal. Partnerships, alliances, and more all prove necessary to accomplish such improvements. To Bridges, it is important that the bank be a “catalyst.” Sometimes, it is not so much the “how much” that is important to a project’s success, but the “when.” Frequently, the role Franklin Bank plays is financing the “site contract.” This means the upfront money necessary to acquire the site, be it building or vacant lot. Bridges explains that this is often one of the most challenging aspects of putting a deal together. “As a lender,” says Bridges, “you are buying in based on a hope, a plan.” Furthermore, she says, the lender is counting on the builder-developer, often a nonprofit organization, being able to keep the project moving along and completing it on time, so the bank’s loan is repaid timely. Such lending is considered speculative, but without it, many worthwhile projects wouldn’t begin. Franklin also provides construction financing to some projects, both commercial and residential. For instance, it has often been involved in new housing subdivisions and apartment projects of various sizes, with affordable units frequently part of the mix. One project currently pending, Heritage Park, is turning a former public housing site into a 900-unit mixed-ownership neighborhood that will include rental units, affordable housing units, and public housing units for the elderly. Franklin Bank extended the development loan to the project’s public and private organizers, and has also financed the construction of affordable single-family homes there. Overall, the bank has a strong preference for owner-occupied properties. Bridges explains that Franklin Bank does not want to encourage absentee ownership, which can cause problems for neighborhoods. Because most individuals who acquire property with Franklin Bank credit are first-time property owners, for commercial or residential needs, Bridges likes to refer to Franklin as their “on-ramp.” “The Minneapolis way is to try to reach out to the private sector and team up” —Mike Christenson, city planner Mike Christenson, director, City of Minneapolis Community Planning and Economic Development, talks with Dorothy Bridges on the banks of the Mississippi River. For instance, in place of the errant gas station mentioned earlier, a large commercial bakery firm agreed to build and operate a new bread factory on the site. Franklin Street Bakery, which opened its factory in late 2003, produces everything from famous hamburger rolls to ciabatta and other artisan breads. Thousands of items are baked in the 24/7 factory daily, chiefly for the commercial market. The bakery employs 120 bakers and other workers in a substantially automated, high-volume plant. It ships to approximately 20 states right from Franklin Ave. Some of its equipment was financed by long-term credit from Franklin Bank. For instance, to save on the cost of bagged flour, the bakery needed to install two huge flour silos, each large enough to hold 50,000 pounds of flour, pumped in from arriving tanker trucks. Picking up the ripples Other opportunities for the bank to make loans while supporting the community can result from the ripples of larger projects. 34 FEBRUARY 2008/ABA BANKING JOURNAL Involvement for improvement Bridges serves, or has served, on perhaps more than the normal banker’s share of commissions and boards, because of the bank’s community development focus. “The nature of the work that we do sometimes gets me into the arena of trying to play a role in developing policy,” says Bridges. She sits, for instance, on the Mayor’s Housing Advisory Committee. She is not particularly political on a personal level, she says, but she works with many public leaders in order to help move along community improvements. “I see it as more of a community advocacy role, a nonpartisan approach,” says Bridges. Her expertise, and that of her staff, is known, and respected. “We work closely with Franklin Bank in doing deals throughout the city,” notes Mike Christenson, director of City of Minneapolis Community Planning and Economic Development. One private nonprofit on whose board Bridges has served on for more than seven years is the Minneapolis Foundation. “We count on bankers like Dorothy to work with parts of the community that need special attention, areas that other banks aren’t always interested in serving,” says Sandra Vargas, the foundation’s president and CEO. “Dorothy is one of my first three calls when there’s an issue of community development in Minneapolis.” Bridges’ volunteerism is broad, and a longtime habit. It is also something that bankers at Franklin Bank find essential to be in this part of the banking business. Typically, Franklin bank lenders serve on at least one nonprofit board, according to Rich Esquivel, vice-president-commercial lending. “You join things that will get you involved in the community,” he explains. The bank’s lenders say getting to www.ababj.com/subscribe.html http://www.ababj.com/subscribe.html

Table of Contents Feed for the Digital Edition of ABA Banking Journal - February 2008

ABA Banking Journal - February 2008 Contents On ABABJ.COM: Have You Visited Our Brand-New Website? Editor's Column "That's Edutainment" Snapshot: Tier 1 Ratios Stable so Far 100th Anniversary: Then and Now ABA Resources ABA Chairman's Position Don't Despair Pass the Aspirin Cover Story: Socially Responsible Banking Profitably - Incoming America's Community Bankers Council Chairwoman, Dorothy Bridges Demonstrates the Way A True "Rags-to-Banker" Story Retail Banking: On the Money Hunt Community Bank Management: The Ugly Truth About Board Relations Does Core Really Matter? Security 2.0: Not Just a New Kettle of Phish A Personal Case of Mal-Serendipity DOD Credit Regs Demand Attention Mailbox Banker's Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - February 2008

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