Black Banks to Provide Financing for $45,000,000 Deer District Hotel Development in Milwaukee
MILWAUKEE--(BUSINESS WIRE)--Dec 16, 2021--
The National Black Bank Foundation announced Thursday that a pair of Black-owned banks are participating in a $45,000,000 transaction to develop The Trade, a new Autograph Collection® hotel by Marriott at the steps of the Fiserv Forum in Milwaukee’s Deer District.
Milwaukee-based Columbia Savings & Loan Association and Citizens Trust Bank are providing financing to North Central Group, which is developing the property through a long-term land lease with the Milwaukee Bucks. The scope and nature of the transaction, coupled with NCG’s strong credit rating, will diversify the two banks’ loan portfolios and bolster their capital cushion, allowing them to extend new capital into disadvantaged communities of color. The partnership follows a summit between the presidents of four of the country’s largest Black banks and Milwaukee Bucks President Peter Feigin earlier this year.
“The Bucks organization appreciates the essential work of Black banks, and we also understand that these lenders are offering market-competitive rates and excellent customer service,” said Peter Feigin, President of the Milwaukee Bucks and Fiserv Forum. “That’s why we were so pleased that NCG brought two Black banks, including one in Milwaukee, into this deal. Black banks’ participation in this project will breathe life into Black and brown neighborhoods in the form of life-changing home and business loans across our city.”
“I’m grateful to play with a team whose front office understands and supports the role and the mission of Black banks in bridging America’s racial wealth gap,” Bucks point guard Jrue Holiday said. “Every time I leave Fiserv Forum and see this development, I’ll be reminded that businesses can support their bottom line and their communities at the same time.”
Black-owned banks break the continuum of poverty in America by providing people of color the tools necessary to build intergenerational wealth. However, federal regulation prevents banks from extending credit greater than ten times their Tier 1 capital, a key measure of financial solvency based on interest on deposits, banking fees, and stock sales. Because most Black banks have scant Tier 1 capital on which to draw, their impact in the communities they serve has been limited. But deals such as The Trade development reverse that trend.
“When corporate America banks Black, they’re demonstrating their support for real economic equity by supporting the institutions that are at the front lines of this country’s racial wealth gap,” National Black Bank Foundation (NBBF) general counsel Ashley Bell said. “Because Black banks were allowed to participate in this deal and grow in turn, there are Black and brown families and entrepreneurs who will get loans that change their lives.”
For Milwaukee-based Columbia Savings & Loan Association, which has historically provided only small mortgages and savings products to individuals and churches, The Trade deal is transformative and historic. The project is similarly impactful for Citizens Trust Bank. Fees from the loan and interest income on the property will ensure these banks can continue their mission for many years to come.
“Deals like this are essential to the growth and sustainability of Black banks,” NBBF Chief Financial Office Brandon Comer added. “Increased opportunities for Black banks to extend credit to large high credit quality borrowers allow the banks to diversify portfolio risk and potentially move funds away from lower-yielding assets, such as government securities, thereby earning more interest income and growing their capital capacity to provide capital for underserved communities of color.”
ABOUT THE NATIONAL BLACK BANK FOUNDATION
The nonprofit National Black Bank Foundation and its investment unit, the Black Bank Fund, were formed in 2020 to uplift Black-owned banks and the communities they serve. Working with corporate and philanthropic partners, the Foundation provides legal, regulatory, and operational assistance to Black banks while the Fund will invest $250 million in direct Tier 1 capital into existing Black banks through stock purchases. Last year, the NBBF facilitated a first-in-professional sports $35 million transaction between a syndicate of 11 Black banks and the Atlanta Hawks. Learn more at NBBFoundation.org.
View source version on businesswire.com:https://www.businesswire.com/news/home/20211216005881/en/
CONTACT: Media contact: James Richardson
KEYWORD: UNITED STATES NORTH AMERICA WISCONSIN
INDUSTRY KEYWORD: OTHER PHILANTHROPY LODGING FINANCE TRAVEL BANKING PROFESSIONAL SERVICES PHILANTHROPY FOUNDATION
SOURCE: The National Black Bank Foundation
Copyright Business Wire 2021.
PUB: 12/16/2021 02:00 PM/DISC: 12/16/2021 02:00 PM