In the Press
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Tuesday, December 6, 2011
Community and Economic Development Clinic Instrumental in Completing Shopping Center Buyout
On the Friday before Thanksgiving, students from the Community and Economic Development Clinic (CED) at Yale Law School helped their client achieve a 14-year-old dream. The Greater Dwight Development Corporation – through its subsidiary, the Greater Dwight Community Investment Corporation (GDCIC) – became the sole owner of the Dwight Place Shopping Plaza on Whalley Avenue in New Haven.
Since the opening of Dwight Place over a decade ago, the shopping center has been owned by a partnership between GDCIC and The Retail Initiative 1994 Limited Partnership (TRI), a private equity group established to promote retail development in underserved urban communities. Originally, TRI’s equity stake in Dwight Place made it possible for GDCIC, a community organization organized and operated by residents of the Dwight neighborhood in New Haven, to own a majority stake in the shopping center. As the home to Stop & Shop grocery store, the shopping center plays an extremely important role in the economic life of New Haven and the Dwight neighborhood. GDCIC provided excellent stewardship of this important community asset, but the project did not earn sufficient profits to support any additional community development activities.
Yale Law students Janis Foo ’13, Chris Hurtado ’12, and Manuel Giner ’12 and Yale School of Management student Megan McGinnis ’12, under the supervision of Selma M. Levine Clinical Lecturer in Law Robin Golden ’98 and CED Fellow John Marshall, assisted GDCIC in negotiating and executing a complex financing deal that provided enough capital to buy out its equity partner, TRI. The student team negotiated the terms of the buyout and worked with lenders to secure favorable terms for GDCIC. The work began in the fall of 2010 when students from the clinic began to negotiate the price of the buyout with TRI. In 2011, students drafted the first proposal for financing and began discussions from potential lenders about potential loan structures.
In the end, the CED clinic helped create a complex lending structure that ultimately required the participation of three different lenders: Start Bank, the Local Initiatives Support Corporation (LISC), and the Community Foundation of Greater New Haven (CFGNH). The students from CED and these community-oriented organizations were all integral in ensuring that downtown New Haven’s prize development would be wholly owned and operated by members of the community.
Over the years, students from the CED clinic have guided GDCIC through a financial crash, a project refinancing, and the decision of SuperValu, the corporate parent of Shaw’s, to close all of its Connecticut stores, including its grocery store at Dwight Place. They have provided general non-litigation legal advice to GDCIC and its parent, the Greater Dwight Development Corporation.
As an added benefit to the community, the terms of the deal require a significant amount of cash flow to be distributed to GDCIC’s parent, GDDC. GDDC currently operates the Montessori School on Edgewood in the Dwight neighborhood. Cash flow from the refinancing will enable GDDC to expand their educational programs in the Dwight neighborhood and strengthen their general operations.
“There has been literally a generation of CED students who have represented GDDC over the last 14 years and all of them helped make this happen,” said Robin Golden. “It is really rewarding to finally be able to ensure that this valuable asset is firmly in the hands of the Dwight community through the stewardship of GDCIC and GDDC.”
The students will continue to work with GDDC and GDCIC to help expand their efforts. They plan on devising a business plan for GDDC so that it can best utilize the new funds for its education-based charitable purposes. They will also advise GDCIC in its efforts to expand the current Dwight Place property and further develop the Dwight neighborhood
The Community and Economic Development Clinic is part of The Eugene and Carol Ludwig Center for Community and Economic Development, which works at the intersection of law, policy, entrepreneurship, economics, and social innovation to research and design creative, testable, and scalable solutions to community development challenges at the local, national, and global levels.