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Case study: An ambitious dream that brought a community together

If you want to know what being tenacious and invested look like, then look no further than the Boys and Girls Club of Detroit Lake’s (BGCDL) new facility. It is an example of how dedicated leaders from the club rallied a community together to raise $6.5 million, and how Bremer became the spark that ignited the project.

Building a new facility has been on the top of Patrick Petermann’s list for over a decade. Patrick has been the executive director of BGCDL since 2005. The club offers many enriching after-school and summer programs to help school-aged children build self-esteem and succeed academically, socially and civically.

“Our old facility was 12,000 square feet. We had a daily attendance of 148 kids, including 20 staff, so it was a tight fit. And because BGCDL kept getting bigger, the old facility was no longer conducive to what we are trying to accomplish,” Patrick explained. They needed a much larger facility.

Despite the need, Patrick acknowledged that money was always an issue because BGCDL does not receive state funding. “We didn’t think we could raise that much money to build a new facility,” added Ron Mueller, board president of the BGCDL.

Yet, the club knew that they could not give up on that goal if they wished to provide a safe environment to better serve the community. The club plays a vital role in providing valuable services to families in Detroit Lakes and its surrounding area. Detroit Lakes is located in Becker County of Northwest Minnesota, one of the top 10 poorest counties in the state with an unemployment rate of 5.4%.

Patrick elaborated, “We serve breakfast, hot meal at noon and afternoon snacks. We do all-day activities and we charge $25 per day per child. So, I think we are a bargain to the community. And families know that we will provide services to them even if they can’t afford our fees. We don’t turn anyone away. We also have a scholarship, which is used up every year, to help these families.” 

Bremer’s Capital Markets Group

In 2017, after 11 years of wishing for a larger space, the club felt it was the right time to launch a capital campaign, aptly called “Building the Future”, to raise funds for the construction of the new facility.

That was when Ron approached Bremer’s Capital Markets group for advice.

The Capital Markets team suggested the club’s leadership look into New Markets Tax Credits (NMTC), a federal tax incentive aimed at bringing capital to underserved communities. The NMTC provides a 39% tax credit to an investor in exchange for capital or equity investments in communities that are severely distressed. This 39% tax credit helped bridge the gap in BGCDL’s capital budget.

Receiving funds from the program was vital to the club’s fundraising success. The NMTC allocation from Bremer’s Community Development Entity, Bremer CDE, was truly the springboard for the club’s fundraising campaign. “Being able to tell potential donors that we have secured funding from Bremer through the NMTC was key in getting them to donate,” Ron explained.

“If you are asking people to donate to a large project, they need to be assured that the project will be completed. Telling them that we have already secured $1.1 million gave our donors the confidence that we will be able to achieve our goal,” he added.

Director of Capital Markets Vassil Zanev echoed Ron’s sentiments. “This is a project that absolutely would not have happened if not for the NMTC. Through the NMTC program, we were able to provide additional capital that the club needed to make the project possible.”

Capital Markets’ community development finance work focuses on delivering creative financing solutions for projects that benefit underserved communities. The group works closely with Bremer bankers to increase access to capital by leveraging programs (such as NMTC) that create incentives for investing in or developing projects that benefit distressed communities. In many cases, Bremer bank also serves as an investor by providing the equity capital for those projects. 

The future has arrived

In the case of BGCDL, although the NMTC allocation and Bremer’s investment and debt financing provided the momentum for the “Building the Future” campaign, Patrick and Ron both knew that they needed the community to pitch in.

Tapping into his business and personal network in the community, Ron and Patrick raised the remaining $6.5 million needed to construct the new facility. Ron’s phenomenal fundraising success highlights BGCDL’s strong standing in the community, a point that Patrick was proud to point out.

“Our reputation in the community is second to none. We proved it by the support we’ve had in building the new facility. It took us exactly two years to raise the money. In my mind, I was thinking it was going to take us three to four years. So, I think people appreciate what we do and believe in our mission.”

The new facility is 30,000 square feet and boasts an outdoor sports court, a gym and computer room. The club also recently added five new staff to their roster and increased their membership capacity.

Outside the entrance to the “Clubbie Space” is a dark blue Bremer plaque acknowledging the vital role the Bremer team played in the construction of the new facility. “Bremer’s footprint is all over this project,” Ron smiled. While that may be true, with a team of leaders as dedicated and committed to the success of the club as Patrick and Ron, the future has never looked brighter.

About Vassil Zanev

Vassil joined Bremer Bank, National Association in the fall of 2013 and currently serves as a Senior Vice President and Director of Capital Markets. He provides support and serves as a partner to commercial relationship managers and bank presidents in pricing and structuring complex loan and deposit transactions as well as managing bank and customer interest rate risk through the use of derivatives. He also oversees the bank’s equity investments in community development projects under the New Markets Tax Credit, Low Income Housing Tax Credit, Historic Tax Credit and Investment Tax Credit Programs and manages the bank’s international trade fin...

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