KeyBank ready to boost its already strong community development lending efforts

KeyBank's community development arm has provided significant financial support to Cleveland's Uptown project.

KeyBank’s community development arm has provided significant financial support to Cleveland’s Uptown project in the University Circle neighborhood.

by Dan Rafter

How big of an impact does KeyBank’s Community Development Lending divison have on the the markets it serves? Just look at the numbers: Last year, KeyBank provided $2.9 billion in debt and equity financing to developments in underserved communities. This helped finance the construction of more than 119,000 units of affordable housing.

And the leaders of the Cleveland-based bank’s Community Development Lending division hope to make an even bigger impact.

“Our goal is to put a lot of capital into the market for very specific uses,” said Jim Poznik, senior vice president of community development lending for KeyBank. “The company’s culture is one that encourages this kind of business. The company gives us the space to do it. It’s an important business for KeyBank. It’s about being a good corporate citizen and about providing capital for the community it works in. That’s the overarching philosophy.”

KeyBank recently named NormanC Bliss senior vice president and director of community development. In this role, Bliss will oversee the community development lending program, and will help the bank prepare to meet the requirements of the Community Reinvestment Act exam.

This exam is an important one. It charts how well banks meet the lending needs of low- to moderate-income communities.

KeyBank, to meet the requirements of the Community Reinvestment Act, focuses on lending to developers who will bring affordable housing and other construction and renovation projects to areas that are struggling economically.

“KeyBank is making a huge difference in the communities that we serve,” said Bliss, who has worked in community development lending for 25 years. “It’s not about getting outstanding ratings on our exams. That’s not what drives us. I’m proud of that. What does drive us is a deep commitment to the communities we serve. Because of that commitment, we receive the outstanding ratings on our exams.”

The challenge with community development lending, of course, is to make sure that dollars are going to the right projects. This means sending development dollars to projects that will make a positive impact in struggling communities. But it also means providing financing to projects backed by developers that have a long track record of success in the affordable-housing area.

Poznik said that KeyBank has during the last two years been lending dollars to several supportive-housing projects. Such projects feature affordable rental housing but also provide services to help renters find jobs, build their resumes and learn new technology that can help them boost their incomes.

“We want to make sure we are working with clients that are providing decent affordable housing,” Poznik said. “We want to work with developers who have a good reputation in the market, clients that are delivering needed services in their communities.”

An example of KeyBank’s community development work can be found right in Cleveland. KeyBank last year provided $9 million in New Markets Tax Credit loans and nearly another $9 million in equity to the Uptown development, an apartment and retail project in University Circle, one of Cleveland’s oldest neighborhoods.

Bliss, who has been with KeyBank’s Community Development Lending division for nearly two months now, said that he is looking forward to expanding the bank’s community efforts.

“It is a great scene here,” Bliss said. “This is a team of veteran, experienced community development professionals that I have inherited. We want to continue to provide that outstanding service to our markets. But we also want to continue to be innovative in our approaches and strategies. We want to continue to be the leader that we are. There is still more to learn. Along the way, I’m sure we’ll find some things that can be tweaked and enhanced. This is a great team for me to be a part of.”

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