The MCW Capital Investment Fund
The MCW Finance and Land Assembly Committee developed an investment fund to provide bridge financing for key development projects in the Midtown Corridor.
One of the initial projects to demonstrate the redevelopment potential of the Midtown Corridor was the Urban Village, a 3 block, 220 unit housing project adjacent to the Midtown Greenway. The project had broad support and diverse sources of funding. The City of Minneapolis approved a redevelopment district for this project, and provided tax increment financing for the land assembly activities, including acquisition, relocation of existing property owners, demolition, and site improvements.
Although the project incurred these land assembly expenses up front, the proceeds from the tax increment were not available until the project was constructed and the redeveloped property began to generate increased property taxes. While the City of Minneapolis ultimately issued bonds to be repaid with the tax increment proceeds, it did not undertake to do so until the project was under construction. Hence, there was a critical need for "bridge" financing to address the early cash needs that would ultimately be funded through tax increment financing.
The MCW Capital Investment Fund responded to this need. The MCW Partnership intended that the investment fund model developed through the Urban Village offering be replicated for subsequent projects in the Midtown Corridor. The MCW Finance and Land Assembly Committee carefully evaluated the real estate market potential of subsequent projects.