The billboard by the Zvago Cooperative at Lake Superior along London Road has some information that might catch your eye: The AFL-CIO Housing Investment Trust (HIT) is helping finance it.
HIT is a $6.6 billion fixed income fund that finances 100 percent union-built affordable and market rate residential projects. The trust purchased $13.6 million of Ginnie Mae loans for the $18.4 million project.
“Minnesota has been huge market for us,” says Paul Sommers, Midwest Regional Director for AFL-CIO HIT.. This is the second project in last three years that trust has committed to in Duluth; in 2017, it financed the District Flats at the top of Miller Hill.
The trust’s “bread and butter” is government-insured loans, Sommers said. The developer gets approved for the loan and the trust buys the debt. As debt provider, everything HIT builds is done 100% union and work very closely with local Building Trades Council to ensure requirement. And as Minnesota’s building boom continues, that means a good outloook for everyone involved.
“Minnesota is important to us and has a really favorable environment,” Sommers said. “It’s surrounded by right-to-work states, but in the state itself, both politically and in the amount of activity, it’s very favorable.”
The trust sees trade unions and coalitions as partners as well as clients, Sommers said, as those organizations can invest in the trust as well.
“It’s a great program and they’re a good partner to work with,” said Craig Olson, president of the Duluth Building and Construction Trades. “I encourage all the locals to look into working with them.”
The HIT, established in 1984, describes its work as social responsible impact investing with an objective of providing competitive returns for Taft-Hartley and Public Fund investors and to promote the construction of affordable housing while generating jobs for union members in the trades.
The HIT has done 94 projects valued at about $1.4 billion in Minnesota. About two-thirds of those are in the Twin Cities area, Sommers said. “There’s not another manager out there that active that’s doing what we’re doing and creating, jobs. Minnesota has been a huge market for us and will continue to be, and Duluth will be a part of that.”