AFL-CIO HOUSING INVESTMENT TRUST HIT NEWS HOUSING INVESTMENT TRUST he AFL-CIO Housing Investment Trust (HIT), which has been committed to investing in the St. Louis area for nearly

A F L - C I O H O U S I N G I N V E S T M E N T T R U S T

he AFL-CIO Housing Investment Trust (HIT), which has been committed

to investing in the St. Louis area for nearly 30 years, recently announced it plans to inject critical financing into a multi-phase plan – NorthSide Regeneration – that promises to turn around the north side of St. Louis. The plan includes building new housing units, creating union jobs and forging a bold future for the neighborhood, where boarded windows, abandoned lots and condemned buildings dotting St. Louis Avenue have long been a symbol of this neighborhood’s economic struggles.

The wider redevelopment plan has an important centerpiece: the $1.75 billion construction of the new western

headquarters for the National Geospatial Intelligence Agency (NGA), a federal agency that monitors America’s “eyes in the skies” spy satellite network.

Over the past two years, the AFL-CIO and the HIT have been active in the competitive battle to convince the NGA to move its western headquarters and its 3,100 employees from a downtown St. Louis site neighboring a city icon, the Anheuser-Busch headquarters building, to the new location, northwest of downtown, rather than shift its base to Illinois.

The NGA’s selection of the north side was finalized in June and planning for the development of the 1,500 acre site

The AFL-CIO Housing Investment Trust (HIT) congratulates the International Brotherhood of Electrical Workers (IBEW) on its 125th anniversary. The union with approximately 750,000 active members and retirees is marking the occasion at its international convention in St. Louis in mid-September. IBEW funds are the

largest trade group of HIT investors, with 101 IBEW funds nationwide. The capital provided by IBEW and the HIT’s other investors enables the HIT to provide financing for multifamily properties, helping the HIT achieve competitive returns for its investors as well as creating union construction jobs, building housing for families, and revitalizing communities.

HIT in St. Louis: 27 Projectsand Still Going Strong

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Investing the Union Way • SUMMER 2016

HIT NEWS

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101 IBEW FUNDS SAY YES TO THE HIT

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Clockwise from left: The Laurel, Park Pacific, The Gatesworth, and The Heights at Manhassett

H I T N E W S

From the Casa del Pueblo senior citizen apartments in San Jose, California, to the Electchester Housing Companies in the Flushing, Queens, neighborhood of New York City, the IBEW has been an important part of helping the HIT achieve these objectives.

Founded in 1891 in St. Louis, the IBEW has partnered with the HIT since

the HIT’s creation. Since 1984, the fixed-income investment company has produced an estimated 11,400 jobs (23 million hours of work) for electrical workers, or about 15 percent, of the 76,000 jobs created for all trades.

In Queens, the partnership between the IBEW and HIT took on special meaning in recent years. In 1949, Harry Van

Arsdale, Jr., the first president of the merged New York City Central Labor Council and one-time treasurer of the IBEW, established the Electchester Housing Companies to provide affordable housing for the families of IBEW Local 3 members on 103 acres of property, off Jewel Avenue and Parsons Boulevard in the neighborhood of Pomonok.

When the 38-building residential development with its 2,399 co-op units needed major capital improvements on its aging buildings in 2012, the HIT provided an 18-month direct loan of $49 million to support a utility system conversion from oil to gas, electrical repairs, façade and roofing work and upgrades to plumbing and sprinkler systems. The HIT financing was also used to retire and restructure existing debt to maintain affordability at Electchester where many residents still claim a connection to Local 3.

HIT’s Partnership with the International Brotherhood of Electrical Workers (continued)

HIT IBEW Investors: 101

Amount Invested in the HIT: $790M

Location: Local Union Funds in 24 states; three International Union Funds in Washington, DC

IBEW Work on HIT Projects (estimated, 1984-current): 11,400 jobs (23 million hours)

IBEW AND THE HIT AT A GLANCE

“We believe in the Housing Investment Trust’s strategy of converting union pension funds into union jobs. We want the HIT to grow stronger and stronger, because, as it grows, so does the labor movement.”-- Lonnie Stephenson, International President, IBEW

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H I T N E W S

is underway. The HIT plans to invest up to $500 million in housing in the NorthSide Regeneration, and has been working closely with the development team that includes Paul McKee, the original visionary of the site, Larry Chapman of CRG Real Estate Solutions, and long-time HIT partner Marilyn Melkonian of Telesis Corporation.

“St. Louis is known as America’s gateway to the West, and we are proud to be part of the city’s gateway to a bright new future that includes union construction jobs,” said Ted Chandler, chief operating officer at the HIT.

Between 1987 and 2016, the HIT has had a significant effect on St. Louis area development. Its impact has ranged from pumping new life into the city’s downtown by helping finance two major mixed-use projects – the Park Pacific, the $98 million transformation of the former Missouri Pacific-Union Pacific headquarters building and The Laurel, the $175 million substantial rehabilitation of the former Dillard’s Department Store – to financing the

$13 million renovation of low-income housing for seniors at the Holy Infant and Saint Joseph Apartments.

During this time, the HIT invested a total of $546 million of union funds in 27 St. Louis area projects that have had a total of $898 million in development investment. The projects have resulted in an estimated 6,530 union construction jobs, generating $392 million in wages and benefits. In total, these projects have produced an estimated $2 billion in economic benefits as the impact of the construction has rippled through the local economy. This includes a total of

14,400 jobs across industries, providing $823 million in wages and benefits for workers.* The projects have led to the building or refurbishing of 4,660 housing units including 1,589 affordable units.

Back near downtown St. Louis, as America’s intelligence workers get ready to move the headquarters, union construction workers prepare to break ground in early 2017, with the transformation of the International Lighting Buildings into apartments.

“The International Lighting project is a good start to shining a new light on the North side,” said HIT COO Chandler.

HIT in St. Louis: $900 Million in Development (continued)

*Job and economic benefit investments (in 2015 dollars) are estimates calculated by Pinnacle Economics and the HIT using an IMPLAN input-output model based on HIT project data and secondary source materials.

“It has been a great job to work on. All the trades are working together. I love being a part of the AFL-CIO. Thanks to the Housing Investment Trust for investing in this project.”-- Kevin Brugmann

Sheet Metal Worker, Local 36, at The Heights at Manhassett

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6,530 union construction jobs

14,400 total jobs across industries

27 projects in the St. Louis area

$546 million HIT investment

$898 million total development investment

4,660 housing units; 34% affordable

$2.0 billion in total economic benefits

$392 million wages & benefits for union construction workers

$823 million total personal income

$65 million state and local tax revenue

HIT’S IMPACT IN ST. LOUIS* 1987-present

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H I T N E W S

AFL-CIO HOUSING INVESTMENT TRUST

Stephen Coyle, Chief Executive Officer

Ted Chandler, Chief Operating Officer

Erica Khatchadourian, Chief Financial Officer

Chang Suh, Senior Executive Vice President & Chief Portfolio Manager

Nick Milano, General Counsel

Debbie Cohen, Chief Development Officer

Thalia Lankin, Director of Operations

Eric W. Price, Executive Vice President

Lesyllee White, Executive Vice President &Managing Director of Marketing

Stephanie H. Wiggins, Executive Vice President & Chief Investment Officer

National Office2401 Pennsylvania Avenue, NW, Suite 200Washington, DC 20037202.331.8055

New York City Office Carol Nixon, Director1270 Avenue of the Americas, Suite 210New York, NY 10020212.554.2750

New England Regional Office Ten Post Office Square, Suite 800Boston, MA 02109617.850.9071

Western Regional OfficeEmily Johnstone, Managing Director, Business DevelopmentOne Sansome StreetSan Francisco, CA 94104415.640.5204

Southern California Office155 North Lake Avenue, Suite 800Pasadena, CA 91101626.993.6676

Midwest RegionPaul Sommers, Marketing Director937.604.9681

Celebrating Workers in St. Paul

The HIT recently hosted a worker appreciation lunch at the construction site of 333 on the Park in Saint Paul, MN, where union workers are transforming an eight-story office building constructed in 1913 into an apartment building with 134 market-rate units. The workers were joined by HIT staff, building trades and general contractor representatives and local business managers.

“The rehabilitation will provide jobs for our members while increasing the area’s number of multifamily housing units,” noted Don Mullin, Executive Secretary of the Saint Paul Building and Construction Trades Council. “This is a good example of investing union pension dollars to create construction jobs with healthcare and retirement benefits at the same time benefiting the community at large.”

The HIT is providing $27.7 million for the $42 million project, which is expected to generate approximately 190 union construction jobs. Jamie McNamara, Business Manager IBEW Local 110 remarked, “The IBEW is very appreciative of the Housing Investment Trust’s commitment to downtown Saint Paul and is grateful for its partnership with the HIT.”

The HIT has invested $139 million in 10 projects in Saint Paul and a total of $564 million in 42 projects in the Twin Cities area since 1991. With total development investment of nearly $920 million, the 42 projects have built or preserved some 6,500 housing units and created an estimated 5,075 union construction jobs and 6,775 jobs across other industries.

333 On the Park

“Everyone works together on the job and we create a safe environment. We make good wages. I can provide for my family.”-- Bill Wolf, Painters Local 61

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stablished in 1987 by the Sisters of Charity of New York, the Elizabeth Seton

Pediatric Center has a simple philosophy, “Changing lives, one child at a time.” Founded to provide specialized clinical and rehabilitative services to children with multiple physical and neurological conditions and disabilities, the Pediatric Center relocated from Manhattan in

early 2012 to a brand new, state-of-the-art facility in Yonkers, N.Y., just north of Manhattan’s West Side. The center primarily serves lower-income New York State patients covered by Medicaid.

The HIT financed $100 million of the $116 million first phase. It includes a four-story, 165,000-square foot facility featuring a 137-bed inpatient center and

an on-site school for resident children as well as community and quiet rooms, recreation areas, therapeutic suites, and family respite areas.

The Pediatric Center’s leaders are now implementing a second phase, adding two floors to the current facility to accommodate 32 additional children who are dependent on ventilators. This addition will triple its capacity and enable New York City area families on the waiting list to keep their children close to home.

The HIT stepped in to invest $18.3 million in the $21.1 million addition, creating an estimated 105 union construction jobs. The expanded unit’s new staff will be covered under the existing collective bargaining agreement with 1199 SEIU United Healthcare Workers East, AFL-CIO.

“We are utilizing union and public pension funds to invest in a care facility that will help children suffering from major health challenges,” said Steve Coyle, HIT’s CEO. “The pediatric care facility addition will enhance Elizabeth Seton’s ability to service the area’s medically fragile low income children. We are pleased to be able to support their health and growth.”

Wheelchair painting given to the HIT as an expression of gratitude

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Stephen Coyle, Chief Executive Officer

Ted Chandler, Chief Operating Officer

Erica Khatchadourian, Chief Financial Officer

Chang Suh, Senior Executive Vice President & Chief Portfolio Manager

Nick Milano, General Counsel

Debbie Cohen, Chief Development Officer

Thalia Lankin, Director of Operations

Eric W. Price, Executive Vice President

Lesyllee White, Executive Vice President &Managing Director of Marketing

Stephanie H. Wiggins, Executive Vice President & Chief Investment Officer

National Office2401 Pennsylvania Avenue, NW, Suite 200Washington, DC 20037202.331.8055

New York City Office Carol Nixon, Director1270 Avenue of the Americas, Suite 210New York, NY 10020212.554.2750

New England Regional Office Ten Post Office Square, Suite 800Boston, MA 02109617.850.9071

Western Regional OfficeEmily Johnstone, Managing Director, Business DevelopmentOne Sansome StreetSan Francisco, CA 94104415.640.5204

Southern California Office155 North Lake Avenue, Suite 800Pasadena, CA 91101626.993.6676

Midwest RegionPaul Sommers, Marketing Director937.604.9681

H I T N E W S

Helping Our Most Vulnerable at Elizabeth Seton

Working families now have a new instrument to add to their toolbox of retirement investments: the AFL-CIO Housing Investment Trust Daily Valued Fund (HIT DVF), a new core fixed-income Collective Investment Fund, is a labor-friendly option for participants in trustee-directed annuity, qualified 401(k), and similar defined contribution plans. The HIT DVF, created this April is sponsored by Hand Benefits & Trust Company (HB&T), a BPAS company.

The HIT DVF is designed to achieve competitive bond returns while aiding communities nationwide with the creation of union construction jobs as well as housing affordable to low income and working families.

The fund includes access to benefits the HIT has been providing defined benefit pension plan investors since 1984. As one of the nation’s oldest impact investment funds, the HIT invests in union-built multifamily projects across the U.S.

The HIT DVF is a fund-of-funds valued daily and comprised primarily of shares of the monthly-valued HIT with a smaller percentage of shares of a

liquidity component which tracks the Barclays Aggregate Bond Index.

Since 1984, HIT investments have created an estimated $25 billion in total economic benefits nationwide, including nearly $10 billion in personal income (wages and benefits), close to 162,000 jobs across industries, including 76,000 union construction jobs, and over 101,000 housing units, with over 65% affordable and workforce housing.*

The HIT DVF is not a mutual fund. Its shares are not deposits of Hand Benefits & Trust Company, a BPAS company, or the HIT, and are not insured by the Federal Deposit Insurance Corporation or any other agency. The HIT DVF is a security which has not been registered under the Securities Act of 1933 and is exempt from investment company registration under the Investment Act of 1940.

*Job and economic benefit investments (in 2015 dollars) are calculated by Pinnacle Economics and the HIT using an IMPLAN input-output model based on HIT project data and secondary source materials.

HIT DVF: A labor-friendly 401(k) fixed-income option

H I T N E W S

AFL-CIO Housing Investment Trust2401 Pennsylvania Avenue, NWSuite 200Washington, D.C. 20037

www.aflcio-hit.com