N E W M A R K E T S TA X C R E D I T O P P O RT U N I T Y

Hoen Lithograph Campus 2102 E. BIDDLE STREET | BALTIMORE, MD 21213

HOEN.CO

DESCRIPTIONCross Street Partners (CSP) and Strong City Baltimore (SCB) seek $7MM in additional NMTC allocation for Phase II of the redevelopment of The Hoen Lithograph Campus (the Project or the Campus), which is the adaptive re-use of the former manufacturing headquarters of Hoen & Co, which produced lithographs for posters, cigar boxes, sheet music covers, and maps. This crucial funding will achieve the Project’s mission of building the scale and capacity of East Baltimore’s grassroot nonprofits and workforce development organizations and catalyzing the transformation of the adjacent neighborhood.

Hoen is located in East Baltimore’s Middle East neighborhood, an area synonymous with poverty, crime and disinvestment for decades, and a few blocks away from the 3-alarm fire which destroyed a senior center under construction in the aftermath of Freddie Gray’s funeral. The 2010 census evidenced more vacant homes in this area than occupied ones. However, the Campus is located just five blocks northeast of Johns Hopkins Medical Campus, and directly across the Amtrak/MARC rail line from East Baltimore Development, Inc. (EBDI), a $1.8 billion life science and residential innovation district. Hoen represents an exciting opportunity to extend the EBDI neighborhood transformation northward, spurring additional jobs and investment outside the footprint of Hopkins/EBDI.

In January 2019, CSP closed on $24.25MM of NMTC allocation (Phase I) to jumpstart the $26MM redevelopment of the 86,000 square foot blighted complex (that includes 6 buildings) in East Baltimore’s Middle East neighborhood, which had been vacant since 1981 and was in a state of complete despair. Phase I facilitated the initial implementation of The Center for Neighborhood Innovation (CNI), a new place-based model for neighborhood transformation that is bringing critical resources and wrap-around services to the community. The flexible financing allowed for core and shell and tenant improvements for Hoen’s anchor tenants – Strong City of Baltimore (operates adult education programs and serves as the fiscal sponsor for over 100 nonprofits throughout the Baltimore), City Life (operates a construction workforce training program), and Associated Builders and Contractors (operates a state certified apprenticeship program for the construction trades).

In an effort to deliver turn-key space for a world-class community facility that will provide workforce development opportunities and the tools necessary to foster entrepreneurial endeavors in the construction trades for thousands of low-income residents and minority and women-owned businesses, the additional Phase II NMTC request will support the following uses:

• Associated Builders and Contractors (ABC) Construction Academy: To address the huge shortages in the skilled building trades, ABC is consolidating and expanding all of its apprenticeship programs that are currently scattered across Central Maryland outside of the City. With 25,000 SF, the Academy will be one of ABC’s largest training facilities in the country. The goal is to at least double the number of apprentices—currently numbered at 500.

• Morgan State University (MSU): MSU, Baltimore’s first HBCU, will be placing a number of community focused programs at Hoen as part of the Center for Neighborhood Innovation. In addition to the Construction Management Program described above, Morgan will bring faculty and researchers from their School of Architecture and Planning and a School of Social Work NIH funded community health research program. The goal is an interdisciplinary focus on issues that confront distressed communities like East Baltimore.

• Center for Neighborhood Innovation: Hoen’s non-profit sponsors will be teaming on a shared office innovation hub that will create a collaborative environment for social entrepreneurs, non-profits, researchers and funders focused on addressing the profound issues of distressed communities. This 20,000 SF facility will include shared amenities and resources including a range of conference rooms and classrooms, small private offices and co-working space, a kitchen and social gathering space. CNI will offer a 1st class set of business services and space that will be affordable with 30 day flexible, full service membership fees.

PHASE II - PROJECT HIGHLIGHTS

For more information, please contact:

Adam Rhoades-Brown, Cross Street Partners

arhoades@crossstpartners.com 631.944.0509

2400 Boston Street, Suite 404 | Baltimore, MD 21224

Learn more - click on links below:

Cross Street Partners | Hoen Lithograph Campus

Strong City Baltimore | ABC Baltimore

Allocation Sought: $7 MM Anticipated NMTC Closing: IMMEDIATELY Completion Date: October 2020

Size: 86,000 square feet

Total Cost: $7 million

Uses: Non-profit office space, construction workforce training, literacy center, café

NMTC Eligible Census Tract: 24510080400(severely distressed) • Poverty Rate: 24.8% • Percentage of AMI: 30.3% • Unemployment Rate: 8.6%

Jobs: 40 construction, 25 permanent

• Club at Collington: The Club is a community based after school and summer program for middle school students located a block from Hoen. A critical component of the Club’s program services is a Health Department certified commercial kitchen which provides meals to the students. The kitchen serves dinner during the school year on school days 5 days a week to 90 students and their families. During the summer, the kitchen provides breakfast, lunch and dinner weekdays for up to 120 students. . The QALICB will provide free space and make a $250k contribution to the nonprofit, which will allow it to do the following:

o Expanded free meal service: With additional fund, the Club aims to expand meal service to students and their families.

o Expanded space: With a $250K additional pass through grant from Strong City, the Club will purchase and renovate 2 adjoining townhouses.

o Café and coffee bar: The Club will operate a café at the Associated Builders & Contractors (ABC) Construction Education Academy @ Hoen and a coffee bar at the Center for Neighborhood Innovation. Food will be supplied by the Club’s commercial kitchen.

o Culinary workforce training: The Club will hire and train community residents for the expanded commercial kitchen, café and catering operations.

o Catering: The kitchen will be the commissary for a catering business that builds on the culinary workforce training program staffing.

• Parking: In addition to funding the TI, FF&E and start-up costs of the above programs, the 2nd phase NMTC transaction will help fund the cost of off-site parking to accommodate the Construction Academy and CNI users.

Community ImpactCSP believes that at full capacity, Hoen will be a model of true neighborhood transformation when public-private partnerships are truly leveraged to improve the quality of life for all residents in historically under-sourced communities. Located in an Opportunity Zone, Hoen will create the following demonstrable impacts:

• Workforce Training: Hoen will serve as regional workforce training hub, offering an on-ramp for residents into the construction trades and food/restaurant industry. The Club at Collington will hire and train local individuals to operate a catering business and manage the coffee bar and café at Hoen. ABC’s expansion at Hoen will increase its building trades apprenticeship training capacity from 500 to 1000 individuals. 80% of ABC’s Jumpstart pre-apprenticeship program trainees are Returning Citizens.

• Job Creation: Phase II will create 40 additional construction jobs and 25 permanent jobs for East Baltimore residents and stimulate further investment in the community. Partnerships are formed with many community organizations that provide resources such as; the Collington Square Neighborhood Association, Green and Healthy Homes Initiative, Broadway East, Civic Works, the Relevancy Project and Habitat for Humanity.

• Food Access: The expansion of free meal services at the Club at Collington will allow it to provide free meals to the 120 children that participate in its after school and summer program, ensuring no child goes home hungry.

• Economic Impact & Community Development: Hoen is located in a severely distressed neighborhood and is surrounded by hundreds of vacant row homes. The creation of a lively, mixed-income community at Hoen will provide affordable housing to existing residents and encourage new residents to move to the neighborhood without displacement, acting as a catalyst for neighborhood transformation.

But ForHoen is located in a deeply distressed neighborhood where commercial rents do not justify redevelopment expenditures. This situation is exacerbated by the poor starting condition of the Hoen Building and the lack of parking. NMTCs are needed to provide tenant improvement money for tenants and the CNI shared office innovation hub. The CNI will provide affordable, flexible fully equipped Class A office space social entrepreneurs, non-profits and researchers which would not be financeable without the subsidy. NMTCs will also provide essential funding for community programming partnerships including the Club at Collington.

Project ReadinessCSP achieved significant milestones from the completion of Phase I and is well positioned to close on the $7MM in Phase II financing before the end of Q2’2020. To date, CSP has:

• Site Control: CSP acquired the site in 2018 and received all required zoning approvals, entitlements, environmental “No Further Action” notice, survey, title and other due diligence items at the Phase 1 closing.

• Lease-Up: The project is 100% pre-leased with the exception of the short term CNI short term shared office spaces. Executed leases are in hand except Morgan State University. The Morgan lease is fully negotiated with approval by senior management and the Board of Regents Finance Committee. Full Board approval is expected April 6th.

• Construction: Shell and core is 100% complete with the start of remaining tenant improvements expected to start in April.

• HTC: Both SHPO and NPS approved Part 3 Phased Advisory Letter for shell and core and Phase 1 TI in February. All that remains in a final Part 3 approval on Phase II TI with TI plans pre-approved by SHPO.

• Capital Stack: All leveraged sources are in place and ready for closing. The $7MM in allocation will be leveraged by $4.2MM in already funded City and State grants and bridged HTC equity. See the attached financial model for a detailed breakdown of sources.

Cross Street Partners is a vertically integrated real estate company exclusively focused on re-building communities by creating vibrant urban mixed-use neighborhoods built on a foundation of innovation and entrepreneurial activity. Strong City Baltimore A Baltimore- based non-profit that works to strengthen low-in come neighborhoods including improving public schools, facilitating private and public investment in commercial corridors, and developing neighborhood leadership.