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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 "brownfield" site. 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.

"This 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 making."

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 requirements.

"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, environmental impact."

"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.

As of 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.


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