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Lenders show Colors raising restaurant cash.

The Nonprofit Finance Fund (NFF) announced that it has succeeded in spearheading a consortium of lenders that raised over half of the $2.2 million needed for more than two dozen former Windows on the World restaurant workers to launch Colors, a new restaurant using a cooperative ownership model that is common in the food service industry in Italy.

Colors, which is located in Greenwich Village at 417 Lafayette Street near Astor Place and the Public Theater, begins serving the public this week.

Sponsored by the nonprofit Restaurant Opportunities Center of New York (ROC-NY), Colors required $2.2 million for the renovation and equipping of its 4,000 square foot space, as well as additional working capital.

On top of $1 million in equity provided by ROC-NY and a consortium of Italian cooperatives, NFF put together $1.2 million in financing from 15 lenders, including community development financial institutions (CDFIs), foundations, a credit union, and others.

NFF provided Colors with a $210,500 term loan, while Renaissance Economic Development Corporation and NCB Development Corporation lent $250,000 and $150,000, respectively.

NFF President and CEO Clara Miller said: "This project has many strengths, perhaps the greatest of which is the collective skills, experience, drive and goodwill of the surviving Windows on the World employees who took on this project.

"The organizations and people committed to financing this important project have diverse interests ranging from support of social enterprise and entrepreneurship to worker justice, cooperative businesses and improvement of immigrant conditions. To me, it just seemed like the right thing to do.

"Among the projects that NFF and many others have done for those affected by the 9/11 attacks, this stands out for me as being very special--a forward-looking effort that builds on the remarkable 'human capital' of these survivors and also serves as a fitting memorial to the Windows on the World workers who died."

Saru Jayaraman, co-director of Colors Restaurant, said: "The Nonprofit Finance Fund helped us to put together more than half of the roughly $2 million needed to open Colors. In addition to providing one of the largest loans that Colors received, NFF has been instrumental in organizing the consortium of 15 community development lenders, who financed more than $1 million of the amount needed for us to get off the ground.

"We wouldn't be opening without the help of organizations like the Nonprofit Finance Fund, which stepped up to the plate when typical sources were not prepared to help us move beyond the ruins of the World Trade Center."

In addition to the NFF-led investments, two equity partners put $500,000 each into Colors: ROC-NY, a nonprofit organization that was founded after 9/ 11 to speak out on behalf of displaced World Trade Center restaurant employees; and Good Italian Food ("GIF"), a consortium of Italian cooperatives anchored by CIR Food Group, which is a $350-million food and restaurant group.

Each equity partner diluted its stake by 20 percent so the workers at Colors will start out as cooperative owners. Over time, the workers are expected to buy out GIF's shares at their original valuation, eventually owning 51-60 percent of the equity. ROC-NY will keep 40 percent of the equity, using returns to seed other cooperative projects in the restaurant industry.

For 25 years Nonprofit Finance Fund has helped nonprofits match their passion and dedication with financial strength and sustainability. NFF provides impartial analysis and flexible financing that nonprofits typically are unable to get from other sources.

Nationwide, NFF works with over 170 funders including financial institutions, foundations and government agencies to invest directly and develop new ways of meeting the capital growth needs of the nonprofit sector and social enterprise sectors. NFF has provided over $250 million in financing to such organizations.
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Title Annotation:Banking & Finance
Publication:Real Estate Weekly
Date:Jan 11, 2006
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