February 12, 2004
CRA Fund Helps Transform Environmental Liabilities Into Social Assets
by William Baue
The CRA Fund supports environmental remediation of brownfield sites, helping transform them into
socially beneficial projects.
Throughout the first half of the twentieth century, downtown York, Pennsylvania served as a
thriving site for the production of refrigeration equipment.
"The former York
Manufacturing Company plant was a typical inner-city American factory--it was a jumble of buildings
crammed into a city block, next to a rail corridor," said Raymond Best, president of York-based
architectural/engineering firm Buchart-Horn/BASCO
Associates. In 1958, production moved to modern facilities, leaving the vintage plant
languishing vacant for the next 35 years. "It was an eyesore, a blighted mess that attracted
vagrants and crime and seemed certain to collapse or catch fire."
In the early 1990s, the
York County Industrial
Development Authority (IDA) commissioned Best's firm to design a plan to renovate this 6.2 acre
Brownfields are properties that are contaminated, or potentially contaminated, with pollution. The
IDA issued bonds to finance the initial revitalization, and recently re-issued bonds to support the
ongoing operation of what is now called the Industrial Plaza of York.
"As bonds trade in
the secondary market, it creates liquidity, which gives entities such as the York County IDA the
opportunity to make new issues," explained Alyssa Sibley, director of CRAFund Advisors, the registered investment advisor to the CRA
Qualified Investment Fund (ticker: CRAIX). "An issuing
authority will continually re-issue bonds, with the new bonds refunding the older bond series,
which creates a revolving flow of funds."
Last fall, CRAFund Advisors purchased bonds now
worth more than $800,000 (or 0.19 percent of CRA Fund assets, which topped $400 million as of the
end of January) to support the socially responsible aspects of the project.
project appealed to us on a number of levels, including encouraging minority- and women-owned
business, stimulating the local economy through job creation, and advancing environmentally
friendly development," said Barbara VanScoy, CRAFund Advisors principal. "For our purposes, it
made perfect sense to provide additional capital to sustain the positive impact it was already
The 181,000 square feet of the plaza houses the William C. Goodridge Business
Resource Center, an incubator for minority- and women-owned businesses. The plaza also adds 500
jobs with an annual payroll of $12.1 million to the local market, and injects an estimated $34.6
million annually to the local economy. And the $6.7 million environmental remediation removed
underground storage tanks, encapsulated heavy metals under floor slabs, foundation, and paving, and
mitigated pollutants such as polynuclear aromatic hydrocarbons (PAHs).
The project received a 1997
Phoenix Award, a
national prize established that year to recognize excellence in brownfield redevelopment.
This is not CRAFund Advisors' first investment in brownfield remediation. In September 2003,
the firm invested in the Brownfield
Redevelopment Fund in Cuyahoga County, Ohio, which involved the construction of a Youth
Intervention Center built to "green architecture" standards. The project achieved these
environmentally friendly standards by sheltering the building with backfill to avoid excess energy
costs, and orienting the building's living spaces with a southern exposure to conserve energy use.
The building also uses a geothermal/heat transfer system to meet the majority of its energy
"No question, we're hitting three critical needs with this investment," said
Ms. Sibley at the time. "One, the brownfield redevelopment will make a dramatic, positive,
"Two, the social dividend for the community, in terms of job
creation and helping troubled kids, is just priceless," she continued. "Finally, we get the
satisfaction of proving once again on behalf of our shareholders that mission-based investing can
earn competitive financial returns."
The fund's competitive returns earned it the top spot
on the Wall Street Journal "Mutual Fund Scorecard" as the best performer amongst the 81 US
mortgage funds tracked for the four-week period ending January 21, 2004. The fund won this
distinction twice in 2003, for the 12-month periods ending May 12 and June 30.
January 31, 2004, the fund has generated year-to-date returns of 0.94 percent, and one-year returns
of 3.73 percent. Annualized returns for the three-year period stand at 6.52 percent, and
annualized returns since its August 30, 1999 inception are 6.91 percent.