- change ups
National City's CDC has made a mark in area
National City corporate spokeswoman Kristen Baird Adams told the Business Journal that PNC Financial Services’ acquisition of National City means business as usual for customers, employees and the communities the bank serves. There are no immediate personnel changes related to the transaction, which is expected to close on Dec. 31, she said. After the deal is finalized, a conversion will take place and customers will be notified of the transition of their accounts to PNC.
“For now, customers will work with the same people at the same locations and can access the same services,” Adams said.
William Eiler, Michigan spokesman for National City, said the company recognized that the announcement might create some uncertainty, particularly early in the process.
“This transaction is about two companies that sit well together in terms of products, services and geography,” Eiler said “The combined company will have greater scale, scope and stability. There will be no immediate changes to accounts, and customers’ deposits, as always, remain safe and sound.”
One question is what will happen to National City’s Community Development Corp., which has been around for 25 years. Through the CDC, National City has turned investments into commercial lending for the revitalization of low and moderate income urban neighborhoods. In Grand Rapids, the CDC has been involved as a financial partner in renovation projects such as Ferguson Hospital, The Boardwalk, American Seating Park, Genesis housing and the Avenue of the Arts project. Dwelling Place CEO Dennis Sturtevant said the financial help provided by the CDC was instrumental in bringing those projects to fruition.
PNC has a community development corporation known as PNC Community Partners, but whether that program will extend to all the National City locations PNC is acquiring is up in the air.
“It’s too early to comment on the status of any National City business location,” said PNC spokesman Fred Solomon. “These issues will be addressed as we work through the integration process. What I can tell you is that PNC expects to continue National City’s tradition of corporate philanthropy and civic leadership.”
CDC acts as a contact and catalyst between various neighborhood groups, financial institutions, developers, and local, state and federal government entities to stimulate economic revitalization. The CDC purchases historic tax credits, low-income housing tax credits, brownfield tax credits, and new market tax credits from developers who either can’t use them or don’t need the deduction. In doing so, the CDC enters into a partnership with the developer, and through that partnership, the credit is passed on to the CDC. National City takes that credit against its corporate income and exchanges the credit for cash that’s then used on the development project.
Dwelling Place has sold tax credits and brought in investor equity from a number of sources, but National City has been involved in more projects with Dwelling Place than anyone else, Sturtevant said.
“If we were to lose the CDC here, it would have an impact on the kinds of development we do,” Sturtevant remarked. “For us it would be a setback and we’d have to look for alternative sources of equity from other banks and other investment organizations. Hopefully, in this environment, there will be some that will step up to the plate.”
Sturtevant pointed out that a number of banks have CDCs and investment arms, including Huntington Bank and Fifth Third Bank, and there are other investor groups, such as the Great Lakes Capital Fund for Housing and National Equity Fund out of Chicago.
“But the question is, what is their appetite in the Midwest anymore? From what I read, investors are looking for the strongest states, and that’s largely East and West Coast investments. That’s not to say they’re not working in the Midwest, but the Midwestern states are challenged more than others right now.”