🔒Hartford-based real estate development nonprofit CIL finally has the means to go national

It’s a simple enough concept for any business — follow your customers.

Sometimes, though, the concept is far more simple than the execution. Just ask the Corporation for Independent Living (CIL), a nonprofit, disability-focused real estate developer based in Hartford.

CIL offers behind-the-scenes support to acquire, renovate and construct housing for people with intellectual and developmental disabilities nationwide. It then typically leases the housing to a nonprofit services provider, and at the end of the lease, donates the home to its partner.

In April, CIL announced it had obtained a $45 million credit line from KeyBank to expand its footprint nationwide.

Previously, CIL’s line of credit required it to obtain permission from its lender for projects outside of Connecticut and Massachusetts. The organization also has developed properties in Delaware, Pennsylvania, Tennessee and Vermont, and has active development consulting projects in Maine and New Jersey.

But the goal of expanding its development efforts nationwide has been around for years. It was already a key topic when Kent Schwendy, president and CEO, was hired 12 years ago.

“When I started, … part of the idea was to start expanding geographically, and that was for two primary reasons,” Schwendy said. “One is because the need is everywhere, and we feel like we have a model that can help people, (and) that very few other organizations do things the way we do them.”

The second reason, he said, was the need to diversify its geographic reach, especially when state and local government funding for programs that serve individuals who reside in CIL housing projects can be uncertain.

“A lot of the organizations work across multiple state boundaries, or they have affiliated organizations and multiple state organizations,” Schwendy said. “So, in order to be able to continue to grow and help organizations, we had to have an ability to walk across state lines.”

Gaining that ability didn’t happen as quickly as Schwendy or CIL hoped, however, in large part because of the pandemic.

Schwendy was hired in 2013 and became the CEO technically on the first day of 2015. But it took some time to find the right opportunities and build relationships before a nationwide expansion could occur, he said.

The final step was putting in place “the financing instruments we need in order to be able to accomplish it,” Schwendy said.

Unfortunately, the pandemic disrupted those efforts.

“We were going to start in 2019, and we had our plans for 2020, and then COVID hit,” Schwendy said.

$711.5M invested

CIL was founded by a group of service-care providers in 1979, around the time the Mansfield Training School, a state-run school for people with developmental disabilities, was closing.

CIL’s founders were providers who knew how to care for the school’s clientele, but did not know real estate, Schwendy said.

“They tried partnering with other developers, but they couldn’t find anybody who had the right mentality for what they were trying to do,” he said.

So, they formed their own company with the mission to support service providers primarily focused on, but not limited to, individuals with intellectual and developmental disabilities, and developing residences for them.

“Primarily that means individual group homes,” Schwendy said, noting that the organization prefers to call them community residences. “We have done some multifamily and other types of projects.”

Over the decades since its founding, CIL has determined that the greatest need is to help organizations serving clients that require a high level of services. “So, we’ve tended to focus on those 24/7 care facilities, homes in communities,” he said.

According to its 2024 annual report, CIL since 1979 has invested $711.5 million in developing community residences, including 154 development consulting projects and 321 multifamily and mixed-use units.

It has helped to develop 2,774 homes, including 544 licensed community residences in Connecticut and 287 in Massachusetts.

CIL in its most recently completed fiscal year, which ended June 30, 2024, reported $2.52 million in revenue and $4.2 million in expenses, with assets of $22.2 million and liabilities of $44.6 million, according to a 990 tax filing submitted to the Internal Revenue Service.

‘Platform for impact’

The new line of credit with KeyBank gives CIL the ability to work anywhere in the United States. It features a $20 million incremental facility.

Webster Bank, Westfield Bank and Rockland Trust also are providing backing.

Matthew Hummel, the Connecticut and western Massachusetts market president for Ohio-based KeyBank, said his organization understands CIL’s desire to expand nationwide.

“The best way to grow this business and provide for these services nationwide … is (for CIL) to follow their customers,” he said.

He noted that CIL’s previous credit facility “had them kind of landlocked,” making it difficult when clients from outside New England approached for help.

Hummel added that KeyBank is a nationwide lender that understands not-for-profit organizations.

“You need somebody who’s very sophisticated and a national real estate lender,” he said. “Our platform can grow nationally.”

‘Fee-for-service’ business

Maria Green, CIL’s vice president and chief financial officer, said the reason nonprofit service providers reach out to her organization often is that “we have the ability to give 100% financing, whereas if they wanted to get financing on their own, they’d probably have to put in 20% — and that gets really hard for nonprofits.”

Schwendy said CIL is “primarily a fee-for-service” business.”

When CIL is hired to work with a nonprofit service organization to build a community residence, he said, it will find a property, acquire it, build the home to the specifications required, oversee the construction and do the permanent financing.

In exchange, the provider agency signs a long-term lease, usually between 20 and 30 years, for the home.

“We then will offset those lease payments against the funding that we get, which is largely through tax-exempt bonds,” Schwendy said. “And when the bond pays off, we donate the residual value and the physical home to the provider agency.”

Leases are structured so that CIL covers its financing and operating costs. “We’re not trying to make money, we’re just trying to cover our costs,” he said.

He conceded that leasing something for 20 or 30 years is probably more expensive for a nonprofit than “getting your own mortgage and building it,” but there are other considerations.

“Most of the organizations don’t have the expertise to do this,” Schwendy said. “They don’t have the personnel. But more importantly, they don’t have the 20%, or nowadays 30%, that you would have to put down. We do that, and we just roll it all into the overall lease cost.”

Expanding nationwide will not immediately require CIL to expand its staff, currently about 20 people, he said, in part because they often use outside experts and contractors.

Both Schwendy and Green, though, said CIL has been talking with organizations across the country that have expressed interest in working with them.

“Development takes a while, so we’ve been talking to people for quite a while, but it’s finally blossoming now,” Green said.