CPDC President & CEO Michael Pitchford Discusses Plans for Expanding the Organization’s Reach
In early 2011 CPDC’s board of directors adopted a strategic plan that included four distinct strategic initiatives:
Strategic Opportunity #1: Partnerships with Public Housing Authorities
Increasingly, Public Housing Authorities (PHAs) are starved for capital improvement dollars from the U.S. Department of Housing and Urban Development (HUD). The result is that existing PHA stocks will be increasingly pushed toward private ownership utilizing a process known as Conversion or Demolition Disposition. A tool supporting this conversion, Rental Assistance Demonstration (RAD), continues working its way through HUD. It is a demonstration program now but, it may grow.
The opportunity for CPDC is most likely working with medium and smaller sized PHAs as the larger ones may have a different route to pursue. The opportunities will be in both partnering in the replacement and recapitalization of existing PHA units and in the provision of resident services. There may also be potential for contract asset management services. CPDC will follow the development of this trend and market our capacity as owner/operator to targeted PHAs in the boundaries of the geographic expansion articulated in the strategic plan.
Strategic Opportunity #2: Mergers, Acquisitions, and Alliances
CPDC is in a strong position both fiscally and operationally to consider merging with other not for profit developers that complement our mission, expand our reach, and strengthen our balance sheet. Merger opportunities can be carefully planned but, more often than not, come up with little notice. A deal in trouble, a leadership change, or a scandal can often open the door to merger discussions.
Besides distressed situations, there are also many logical non-distressed situations where the formation of strategic alliances with other not for profits and perhaps, for profits, to execute our strategy and achieve corporate goals, are worth pursuing.
Strategic Opportunity #3: Geographic Market Expansion
CPDC’s strengths include managing complicated HUD preservation deals in urban and inner-city environs and pursuit of same will continue as a mainstay. However, the trend toward mixed-income communities and the need for affordable housing in suburban locations cannot and should not be ignored. New and nearby geographic markets may afford growth opportunities in these arenas.
Three criteria should be met prior to entering such a new and nearby market (“new and nearby” is defined as any urban/suburban market within four hours driving distance of the District, where CPDC has two or less proximate properties today). The criteria for a new and nearby market are:
- Large number of properties/units >20 years old serving target income groups
- Strong potential for support of one or more local philanthropies
- Limited local not for profit development capacity which affords CPDC an opportunity to gain a foothold
Consistent with this definition, the seven cities of Hampton Roads and Richmond, VA along with Wilmington, DE have been specifically targeted.
Strategic Opportunity #4: Increase Grant Funding and Initiate Joint Fundraising Efforts
Several years ago CPDC embarked on a strategic initiative to shift our delivery of resident services from CPDC staff to third party providers. The full implementation of the initiative is complete, with “partner resources” providing a plethora of services to our residents. As a result, the amount of funds needed to support the staff delivering resident services has decreased, while the need to increase funds raised to support partner resources has increased. Therefore the fundraising capacity at CPDC will be refocused to incorporate joint fundraising efforts to the benefit of our residents.