The Lakewood-Tuscaloosa neighborhood in Durham is one of the last downtown communities to still retain its historic character. As with other parts of this rapidly changing city, the challenge of how to revitalize a community in a way that includes its long-term residents is a key concern for many. The Scrap Exchange, a community-based, nonprofit that works to build community, create jobs, promote the arts and education, and protect the environment, all through an innovative set of “creative reuse” strategies, is taking the lead in doing this work in Lakewood.
In 2014 the Scrap Exchange bought an abandoned movie theater in the Lakewood Shopping Center and transformed it into a vibrant creative reuse center serving community residents, children and families from across Durham and the greater Triangle, as well as teachers and other professionals. Through its work, the Scrap Exchange diverts more than 160 tons of solid waste from the landfill annually, and has created more than 80 jobs in the process.
When nearly 85,000 square feet of commercial space in the Lakewood Shopping Center went on the market in early 2016, the Scrap Exchange recognized a tremendous opportunity. The Scrap Exchange’s goal: to extend its mission of “Revitalization without Gentrification” with the creation of a Reuse Arts District for the benefit of the Lakewood-Tuscaloosa community and its residents. Yet the Scrap Exchange didn’t have the capacity to get traditional bank financing for the project. It turned instead to Initiative Capital, the CDFI arm of the North Carolina Community Development Initiative.
Initiative Capital’s staff worked closely with the Scrap Exchange to develop a financial plan and strategy that worked for the Scrap Exchange and would be a responsible investment for Initiative Capital. Hours and hours of pre-development and project planning work led to a $2,500,000 bridge loan, closed in August of 2016, that enabled the Scrap Exchange to acquire the property, stabilize it, and commence the redevelopment process.
Fast forward to August 2017: after twelve months of hard work and close collaboration with Initiative Capital, the Scrap Exchange has leased up 55,000 of the Center’s square footage, and is in negotiations with other prospective tenants for the remaining space. What was a vacant strip center and a blight on the community is being reborn as a vital community asset.
This week the Scrap Exchange closed a new credit facility for the project for approximately $4.2 million with the Self Help Ventures Fund. A portion of this new loan was used to repay Initiative Capital in full, so its role in this project is, at least for now, completed. Initiative Capital’s President and CEO Tara Kenchen notes that Initiative Capital’s legacy with the project, however, will continue.
We are proud that Initiative Capital was able to leverage its status as a CDFI, and its expertise as a community lender, to enable the Scrap Exchange to buy this property. Because of who we are and how we work, we found a way to get this deal done when others couldn’t. That is special and something that we are proud of.