The executive director of a fund created to invest in downtown Hamilton redevelopment says he can keep his job leading the nonprofit’s day-to-day work and his personal architecture business separate.
Launched in December 2012, the Consortium for Ongoing Reinvestment Efforts (CORE) Fund is a private nonprofit that has raised more than $6 million to acquire blighted properties and make non-traditional loans to developers for projects in the area of High and Main streets.
Before Mike Dingeldein was named executive director of CORE Fund, he also launched in December 2012 his own for-profit business Community Design Alliance with wife Cindy Dingeldein. The small firm was founded to provide architectural, design and planning services for downtown-area projects in Hamilton.
Now that CORE Fund is ready to both make its first loan to a developer of a downtown restoration project and sell its first fixed-up building, CORE and Community Design Alliance — because of their similar missions to restore downtown Hamilton — could provide services to the same project or private developer.
For example, the CORE Fund could loan money to a developer that hires Community Design Alliance to draw building plans. Either that, or sell a building to a private developer that then hires the firm.
Or, Community Design Alliance could be hired by a developer to do design and planning work for a project that later seeks funding from CORE.
But the independent board of CORE Fund says it has policies in place to prevent potential conflicts of interest.
“The CORE Fund has a typical conflict of interest policy that requires full disclosure in all CORE Fund actions related to any other parallel personal, business, or civic interests. We discuss our overlapping roles in community revitalization and we abstain from any votes that might be related to these overlaps,” according to a statement provided by the CORE Fund’s board.
“Although it has not come up to date, it is board policy as an organization that Community Design Alliance would abstain from engaging in any fee for service with any private developer if they received gap financing through the CORE Fund,” the board’s statement reads.
And if the design firm starts work on a project that seeks financing in the future, “I would have to make them aware we would have to sever our service relationship before they would apply for funding,” Dingeldein said.
Community Design Alliance has a consulting contract with the CORE Fund for Dingeldein to work part-time as the CORE Fund’s director. The contract also pays the small architectural firm, located at 236 High Street, a fixed-rate for bookkeeping, office and meeting space, copy machines, and phones. The CORE Fund does not have its own office space.
As director of CORE Fund, Dingeldein’s responsibilities include managing contractors of ongoing remodeling projects, promoting the CORE Fund to groups of potential developers and recommending projects.
Because Dingeldein and his firm is paid via a fixed-rate contract, “there is no impact, financial or otherwise, for the executive director to make any recommendations that could change the consulting fee paid to Community Design Alliance,” the CORE Fund’s board said in its statement.
Additionally, Dingeldein doesn’t vote on which properties to buy and or which projects to loan to, he said. The board members, representing the fund’s investors, has the final say. Board members include: Claude Davis, chief executive officer of First Financial Bank; Rick Demmel, Butler County community bank president of U.S. Bank; John Guidugli, president and chief executive officer of Hamilton Community Foundation; and Lee Parrish, local attorney and legal counsel.
Hamilton Realtor Phil Morrical III with Combs Group - DC Realty said he wonders how transparent CORE Fund’s activities are.
“Who’s in the know and when is it good for the public to know?” Morrical said.
Dingeldein was approached to be director of CORE because of his technical expertise and knowledge of downtown, said Hamilton City Manager Joshua Smith. “Mike just seemed a natural fit,” Smith said.
The city is one of several underwriters of the fund, and to date has invested $1,967,000, according to the city’s finance director.
While CORE Fund and Community Design Alliance have similar missions to revitalize downtown Hamilton, the architecture practice is not limited to work in the city like the nonprofit agency is. The for-profit firm can work on projects throughout Butler County, said Dingeldein, who retired from a 30-year career with SHP Leading Design at the end of 2012.
“I think there’s a 10-year window for Hamilton to make some of these catalytic changes and I want to help with that,” Dingeldein said.
PROJECT DETAILS
The CORE Fund is actually the name of an umbrella organization consisting of three funds: the CORE Investment Fund to provide gap financing for projects; the CORE Strategic Acquisition Fund for property purchase and building improvements; and the Residential Redevelopment Fund for acquisition of historic residential property and property improvements.
A total more than $6 million has been raised. Three million was donated to the investment fund by U.S. Bank, First Financial Bank and Hamilton Community Foundation ($1 million each). More than $2.4 million combined has been donated to the strategic property fund by the City of Hamilton and the foundation. The foundation contributed an additional $625,000 to the residential redevelopment fund, according to Dingeldein.
Since CORE Fund was launched late 2012, seven commercial and residential properties have been purchased. These properties will be readied for development — cleaned-up, with some restoration work, liens settled and environmental studies completed, Dingeldein said.
The fund provides lower-interest capital with lengthier payback terms than traditional business loans to applicants that qualify. CORE Fund loans are meant to cover up to 10 percent of a project’s cost, and not be the sole source of financing.
No loans have been made yet.
“There’s been more progress in the last 18 months in downtown Hamilton from what several people have told me than the last 10 years,” Smith said. “I think it’s doing exactly what it needs to be doing. I’m hoping the activity just continues to pick up.”
Plans are to make loans and sell properties currently owned by CORE before acquiring more properties, Dingeldein said.
One commercial building owned by CORE, the former Elder-Beerman building at 150 High St., is under a memorandum of understanding with EMD Holdings of Cincinnati. The Cincinnati developer has until the end of October to seek tenants for the space, study redevelopment and do their due diligence. When the one-year agreement expires, the CORE Fund could agree to sell the building to EMD if the fund approves EMD’s redevelopment proposal, Dingeldein said.
Sara’s House, which sells home décor, gifts, jewelry and refurbished furniture and fixtures, opened May 8 in the former Hungry Bunny building at 254 High Street. The building was also purchased by CORE, which paid to build out the tenant space.
Along with other tenants in buildings owned by CORE, the rents pay for property taxes and utilities, for example, Dingeldein said.
“We are consistently performing better in Hamilton as an independent store than we did in Bridgewater as part of a large shopping center,” said Sara Vallandingham, owner of Sara’s House. She first opened at Bridgewater Falls in Fairfield Twp. in 2012.
“In turn I hope (Hamilton) gained a really great stable business and it’s going to continue to flourish and encourage other businesses to do the same,” Vallandingham said.