Introduction

Carson Kahoe

Hello, and welcome to Community Insights, a limited audio series from IFF where we talk to nonprofit leaders about projects they’ve undertaken to upgrade their organization’s facilities and better improve their abilities to serve their communities.

My name is Carson Kahoe, and I work at IFF, a mission-driven lender, developer, and real estate consultant that works across the Midwest to strengthen nonprofits in the communities they serve.

Today, we’re talking with Dione Boles, executive director of Larlen Communications, and we also have the privilege of talking with Dione in the lovely studio of Larlen Communications. This is the studio for NextGenMedia, the youth broadcasting academy that we’ll be talking about a little bit later today.

So thank you for joining us, Dione.

Dione Boles

Welcome. Thanks so much for stopping by and talking with us today. We so appreciate you taking the time out to come and learn about us and our organization here in our studios at NextGenMedia GR.

Carson Kahoe

Dione will be joining us today to talk about her experience building this building, Southtown Lofts, which is a mixed-income housing development in Grand Rapids’ Baxter neighborhood. In addition to serving as a critical resource of affordable housing for local neighbors and residents, Southtown Lofts is also home to Larlen Communications’ headquarters, as well as the Youth Broadcasting Academy, NextGenMedia Grand Rapids.

Joining us as well is David de Velder, IFF’s Director of Lending for Affordable Housing and Manager of the Michigan Affordable Housing Loan Program. Working through that special loan program, David collaborated with Dione to provide Larlen the financing that ultimately was central in the organization’s ability to make the lofts and this new headquarters a reality.

So thank you, David, for joining us.

David de Velder

Thank you, it’s really great to be here.

Broadcasting for the community

Carson Kahoe

I’d love to start with a little bit of background about Larlen Communications. So Larlen Communications was first established in 1997 to operate the urban gospel radio broadcast station Power 91.9 FM, which is designed to spread messages of hope and inspiration through the lens of Christian faith across the greater Grand Rapids area.

Dione Boles

That’s correct.

Carson Kahoe

Dione, you joined in 2000. So at a high level, how would you describe Larlen Communications’ mission, and how does that tie into the broadcasting work that you do through Power 91.9?

Dione Boles

Well, Larlen Communications has always been about encouraging, inspiring, and empowering the community at its grassroots level, so that’s primarily our mission when it comes to our broadcast signal at 91.9 FM WDPW. And in 1997, when we were incorporated, the FCC required us to have a nonprofit organization in order to acquire a noncommercial educational station license, so that was the original reason why we had to seek the nonprofit designation.

We found that as a non-commercial educational station, you needed to have an educational component that is tied into the license. So we established NextGen in 2015, and originally it was just for radio. We just had six students that were learning introduction to radio. We would teach them the history, the theory, and the practice, as well as all of the other wonderful hands-on activities that we provide here in the building.

And then from there, shortly, probably about two years later, we got a grant from the city of Grand Rapids where we were able to expand our classroom space, and we added television, film, and cinematography where we would teach a separate cohort where we added an additional six students. So we were able to service 12 students total.

During the spring they were able to do America 250, Birth of a Nation. We had a funder that sponsored that, the National Endowment of the Arts, and they were able to interview Congresswoman Hillary Scolton. And the kids were able to take a field trip to Fox 17, WXMI, and visited Michelle Dunaway on the Morning Mix, and they were able to talk about their experience and their journey and the program, as well as the podcast with Congresswoman Scolton.

So we had a lot of wonderful things planned in the spring, and this fall, we’re going to do some great things as well. Commissioner Kelsey Perdue is going to come in and podcast with kids and we’re going to take a trip down to City Hall and we’re going to interview some city commissioners. So we have a lot of wonderful things planned in the fall for our program, and we’re so excited and thrilled for our kids to experience all of these wonderful opportunities as we continue to teach them the power of their voice.

Carson Kahoe

You talk about affordable housing as part of the sustainability for your organization. What does that mean?

Dione Boles

Well, of course, as a nonprofit, we operate on our budget. And if anyone is looking at what’s currently going on in the world when it comes to nonprofits — and how funding has been cut at the federal level, the state level, and how the local level is trying to fill the gap but having problems doing so because they don’t have the type of resources that the federal or state doesn’t have — then it really behooves nonprofits in their strategic planning and thinking to try and have alternate sources of income and resources in order to fund their nonprofits. So having an affordable housing development project in order to provide sustainability for the organization was pretty much a godsend.

In I want to say maybe 2016, 2017, we had a particular stakeholder by the name of Darel Ross that came into the building and he said to us, “You know, you might be interested in building apartments.” And this is before the development that was happening here in the Baxter neighborhood, before ICCF, Steepleview, before Lynx, Eastern Lofts—

Carson Kahoe

Before all of these other housing—

Dione Boles

Before all of these four story mixed-use developments came to the neighborhood. When he came in and said, “Well, maybe you want to think about building apartments for the sustainability of your organization,” we really decided to give it some more thought.

Carson Kahoe

Yeah, certainly.  You mentioned Baxter a little bit; tell us a bit about the neighborhood. What is the need for affordable housing here?

Dione Boles

Well, if you know anything about real estate within the city of Grand Rapids, you certainly do know that the cause of housing has gone up exponentially — if you’re looking to buy a house, if you have children, if you’re a single mother, or if you’re a married couple with children.

So there is definitely a need for affordable housing because the cost of living has gone up, but our wages have not. The basic need of housing — it shouldn’t be a privilege. It should be something that everyone has the right to have. And it’s a testament that we were fully leased within 60 days.

In our eyes, because not only are we able to provide a service to our community right here in Baxter, because all of our apartments are 60% to 120% AMI—

Carson Kahoe

The apartments here in South Town Lofts.

Dione Boles

Correct. And as you know, according to articles and statistics, there’s certainly a need here in the city of Grand Rapids for affordable housing. I think at one point we needed over 21,000 units and we’re probably down to about, what, 13,000?

David de Velder

We’ve made a little bit of a dent.

Dione Boles

Right, we’ve made a little bit of a dent.

David de Velder

Still a long way to go.

Dione Boles

Well, yeah, there’s still a long way to go, but you know, we were a part of that initial dent, and in order to provide that type of service to the community and still be able to pay our operating expenses, it was for us a win-win, so to speak.

Carson Kahoe

Absolutely. And that’s something we hear all the time from the nonprofits that we work with, and something we see and say to them as well, that so much of doing the work of nonprofits, and the important work of serving your community, has to also be sustainable. And you can’t do that work as a nonprofit if you can’t support yourself and have a budget year after year.

Dione Boles

Exactly. And it can’t be done through grants alone. These days and times, it’s certainly showing us as nonprofit leaders that you have to think outside of the box when it comes to funding.

IFF and lending for affordable housing

Carson Kahoe

So you’re talking about Larlen Communications moving into exploring affordable housing as a way to support your operations as a nonprofit

Dione Boles

That was in 2018.

Carson Kahoe

That was in 2018.

Dione Boles

Yes.

Carson Kahoe

And it was through that long project that eventually ended here with Southtown Lofts that you first got in touch with IFF and eventually with David here.

So David, to start, could you please just introduce yourself, tell us a bit about what you do at IFF?

David de Velder

Yeah, I’m the director of lending for affordable housing. I cover mostly Michigan, and I also oversee our Michigan Revolving Loan Fund.

Carson Kahoe

And the revolving loan fund, that’s the Michigan Affordable Housing Loan Program, right?

David de Velder

Yep.

Carson Kahoe

So this revolving loan fund, it’s this public-private partnership between IFF and the Kent and Ottawa County governments to provide this low-cost, flexible funding for affordable housing in these areas. Tell us a bit about that. What is the program? When did it start? What is its goal?

David de Velder

So it started with the community, first and foremost, with some ARPA funds coming in from the federal government as a result of COVID.

Carson Kahoe

ARPA, American Rescue Plan.

David de Velder

Yep. And so during that time period, all this money was flowing, and I think those in the community, the nonprofits and such, were just saying, why don’t we use some of that money for a revolving loan fund? And so Kent and Ottawa Counties worked together to come up with some of those funds being designated for a revolving loan fund. Through the course of conversations with the Chamber of Commerce here in Grand Rapids and Lakeshore Advantage in Holland and other foundations in the area, they formulated this revolving loan fund and chose IFF to administer it.

Carson Kahoe

What does that mean, revolving loan fund?

David de Velder

So it’s blending capital from the counties, which is very low cost, very long term, 0% interest money, along with some other low cost — sometimes IFF gets other low cost investments from banks, foundations — and then also combining money from our traditional bank pool that have to meet Community Reinvestment Act requirements. So you’re pooling all this money together, designated it for the revolving loan fund for Kent Ottawa, so it has geography limitation, and so any loans we do have to come out of those counties.

We’re using IFF standard loan products, but then we’re also — because we have lower cost, more patient capital in this fund, we can do things that we ordinarily wouldn’t do: loans like this on a building like this, where we have a newer organization that hasn’t done a development project in the past of this scale, and using it to support their mission and advance more housing. This is a majority housing project because of all the units in it, and so it qualified, which was outstanding.

Carson Kahoe

Clearly a very important program. We have some information, some data on what the program has done, and to date, the Michigan Affordable Housing Loan Program has provided $83.3 million in loans to 19 borrowers, leveraging $268.6 million in capital, and from its start, it has helped create or preserve 1,157 affordable housing units. So that’s over 1000 homes that people are able to not only stay in, but afford.

Dione Boles

It’s important work.

Carson Kahoe

So David, through the affordable housing loan program, IFF was able to provide Larlen Communications a $4 million loan, which it used to help develop the Southtown Lofts project.

What was unique about this loan coming through the program, and is this something that IFF would have been able to do outside of the program?

David de Velder

We could have tried, but I think the difference with this one really has to do with lower interest.

Dione Boles

Yes.

David de Velder

The lower interest really helps, and so the $4 million construction loan that was provided on this building — the difference with IFF, and then looking at the lower interest capital, is we’re financing 95% of the project cost. So the total project cost is about 4.6 million, so we were financing around 4 million in the construction because of the way that we size our loans.

And so they could probably get a loan through a traditional bank at a really competitive rate, but to get a project going like this, you really need IFF’s loan sizing requirements, that 95% loan to value. So we’re not loaning based on some portion of the project costs, we’re loaning on the majority. A traditional bank’s going to require about 20 to 30% down on a project like this, which would have required Larlen to come out of pocket with a lot of cash to make something like this work.

Dione Boles

That’s right. And as a small nonprofit, that just wasn’t feasible for us to come up with that type of down payment.

Carson Kahoe

So Dione, did you explore any other financing options before connecting with IFF and getting going through this loan program?

Dione Boles

Oh yes. I approached a number of different banks here within the city of Grand Rapids and heard “no” after “no” after “no” after “no” after “no,” until I finally came across a particular bank that said,  “We can’t help you, but I think I know of an organization that can. And they recommended that we get in contact with IFF, and they were able to provide an introduction and bring you guys to the table, and we’ve been rocking with you guys ever since.

Carson Kahoe

That’s great. We love rocking with you guys.

Dione Boles

Yeah.

Carson Kahoe

So what did this loan from IFF mean for the Southtown Loft project?

Dione Boles

We wouldn’t have been able to have any type of loan without IFF, so it was everything to the project. We wouldn’t have been able to garner the funding that we needed in order to construct this building, so in essence, if IFF wouldn’t have granted the loan, this building would not be sitting here right now, and the transformation that has happened on this corner and in this community — and taking it one step forward and revitalizing our neighborhood and our business corridor — it wouldn’t have been possible.

Southtown Lofts’ community impact

Carson Kahoe

So the project is done now. When did you finish construction?

Dione Boles

We had our certificate of occupancy January 13^th, and we moved into the building probably a couple weeks after the moving trucks came in and rolled in the furniture and the desks and the chairs, and we had our students back in the building for a spring cohort in February, and they were in the building until the end of May. So we’ve been steadily moving along since we’ve had our occupancy in January — and we are just, we’re thrilled.

Carson Kahoe

How does it feel to be in this new space?

Dione Boles

Amazing. We’ve come a long way from the two-story dilapidated building that used to be located here on the corner of 640 Eastern. At one point in time, I think there were a number of neighbors within the community that thought that the building had been condemned, even though we were operating our offices and we were also operating our program out of the building. What it looked like on the inside — you remember David, because you were in the space before the transformation that now sits at this corner — the outside definitely didn’t match the inside. And we always said that if we could just get the inside to look like the outside, then we could really make a difference here in the community and how people viewed our organization.

Carson Kahoe

So in addition to this beautiful studio space, the studio here, there’s another TV and radio studio upstairs, a separate TV broadcasting studio upstairs, both for Power 91.9 and—

Dione Boles

For the NexGen program. And the classrooms!

Carson Kahoe

And the classrooms.

Dione Boles

Yes, we have two classrooms, a Mac classroom where they learn about television and film, and the Macs have Final Cut Pro software where the students, after they shoot the content, then they come in and edit. And then I’ve got a Windows-based lab that teaches the radio and the podcasting, where students come in and they learn scriptwriting and interview skills and editing.

Carson Kahoe

You also have these 12 affordable units. Tell us a bit about these units.

Dione Boles

The 12 apartment units, they are one bedroom, one bath, and as I said, they’re fully leased out for the next 12 months, and we’re really excited to be providing affordable housing here in the Baxter neighborhood.

You know, if you looked at my units like David has, anybody would want to live with stainless steel appliances, picturesque windows, in-suite laundry, 9 foot ceilings, tile backsplashes, you know—

Carson Kahoe

And this is escribing the beautiful apartments here at Southtown Lofts.

Dione Boles

Yeah! We designed them with the thought of, we would want to live here. So if we want to live here, we’d certainly know you want to live here too.

David de Velder

I think you set the bar really high on the standards here, standard of quality.

Carson Kahoe

And as you had mentioned too, I mean all of these features are beautiful and so important to have in an apartment, but also having these apartments being leased for, you had said, between 60 and 120% of area median income — that’s also so important, that having these amenities is accessible, that people can have this sort of space.

Dione Boles

And at that price point and income level.

Carson Kahoe

Once you’ve opened this or have this project done now, have you seen any impact on the neighborhood?

Dione Boles

I think there’s a certain sense of pride as you ride down the street and you look at all of these beautiful buildings and you look at all of the other up and coming development that we have sparked, like Cliff’s Corner right around the corner of Henry and I want to say Logan, and more development that’s planned here along Eastern, as well as MLK. So I see the neighborhood changing for the better, and we’re excited about it.

David de Velder

New roads, new parking, street parking, new sidewalks.

Carson Kahoe

So what is the importance of having an affordable housing development that is mixed-use, that has both the units and an educational space?

Dione Boles

I think it was important for us to have a designated area for the students to learn, grow, and play, so it was a safe environment for our kids to come into and just take a breather after school and just really enjoy themselves. So in creating this mixed-use development, providing them with that type of environment was essential to their mental health.

And then to see some of the tenants see the students coming in and out of the building and then saying, “What are you guys doing down in that space?” Oh, well, we have afterschool programming through NexGenMedia. “Well, what exactly is that?” And then saying, “Well, I have children that would be interested in that particular program.”

David de Velder

It’s so neat to see a building like this that’s multipurpose be active day and night. So a really smart use.

Dione Boles

Exactly.

Takeaways and final thoughts

Carson Kahoe

So, Deon, I’d love to get some sort of final thoughts now that you’re through this project and you’ve completed everything.

Southtown Lofts is, as you said, all leased up and the educational program is going. Now that you’re on the other side of this project, what do you wish you would have known at the start?

Dione Boles

You always need more money.

Carson Kahoe

Ain’t that the truth?

David de Velder

Especially grants, right?

Dione Boles

Free money is always great. And making sure that your numbers are in alignment and that everyone is all on the same page when it comes to the budget of the project and the total scope of the project.

And something that I always recommend with any developer that’s looking to move into this sphere to always check, double check, triple check your numbers. And then sometimes going back and saying, “Well, has this number changed because of the economic climate that we’re in, the fact that steel is more, appliances are more, everything is more. How is that going to overall affect the budget?”

Carson Kahoe

Were there any unexpected challenges that arose in the process of completing this project?

Dione Boles

Oh, absolutely. When we dug the foundation out of the street, we had to shore up more of the street that we anticipated, and it ate into the contingency, that ate into the budget. So those unexpected things that you don’t anticipate — I think the contingency budget probably should have been bigger.

And I was relatively conservative in saying we need 25% in our contingency budget. And when I said that, others said, “No, you don’t need that much. It’s, standard 10, 15.” And it was like, “No, 20, 25.” I think we met somewhere in the middle — and it still wasn’t enough.

So show me the money. Show me the money!

David de Velder

It’s a little more complicated when you’re taking down an existing building and putting a new one in its place in a very compact environment like this. So, yeah, unfortunately, contingencies are very important, and I’m glad it all worked out.

Carson Kahoe

So, what do you see coming next for Larlen Communications? What’s in your future?

Dione Boles

We’ve got a brand new development that we’re looking to construct on a three acre parcel, 46 units, townhouse style, that we are currently working on. So we’re excited about that project as we continue to move in this development sphere.

Carson Kahoe

And where’s this new development?

Dione Boles

Off of Medical Mile in the 49505 ZIP code.

Carson Kahoe

Lastly, what has been most satisfying for you to see coming out of this project?

Dione Boles

Seeing the building standing here. It’s a joy just looking at it and walking through the doors and seeing the kids come through, and as they step off the elevator, and they get into the classrooms, and they sit down at the computers, and the teachers are up at the front teaching the content and showing them how to be creators and amplify their voices — that’s just phenomenal, and it’s the reason we do what we do.

Carson Kahoe

That’s really fantastic.

Dione and David, thank you again both so much for sitting down and talking with me today about the work that you do and about this beautiful building.

Dione Boles

Thank you.

David de Velder

It was a pleasure, thanks for having us.

Conclusion

Carson Kahoe

That about wraps up today’s episode.

Again, I want to thank Dione and David for coming out and talking with me today; it was really lovely hearing from them.

If you’d like to learn more about Larlen Communications, you can visit their website at power919.org or reach out to Dione directly at larlencomm@SBCglobal.net.

Would you like to learn more about the Michigan Affordable Housing Loan Program? Visit iff.org to learn more about this unique and crucial program. You can also learn more about our lending and real estate consulting program at our website, iff.org, or feel free to follow us on Facebook, LinkedIn, X, and YouTube @IFFcdfi.

And feel free to reach out to David directly if you have any questions for him at ddevelder@iff.org.

Thank you for listening, and we’ll see you next time.