In the early 1980s the Cleveland Foundation helped finance Lexington Village, the first market-rate rental housing built in the east-side Cleveland neighborhood of Hough in 50 years, precisely because it was a “project of scale,” not a small program that tinkered at the edge of a problem. The 183 townhomes proposed for Phase 1 of Lexington Village had the potential to offer a turnaround solution for disinvestment in the predominately African-American neighborhood, which had never been rebuilt since being engulfed in riots in 1966.

The opportunity to stem the neighborhood’s continuing decline was presented by the Famicos Foundation, a nonprofit developer of housing for low-income families, whose director approached the Cleveland Foundation with a unique proposal to build rental property at Lexington Avenue and East 79th Street, near the flashpoint of the Hough riots. The foundation’s program officer for civic affairs (and future director), Steven A. Minter, embraced the quixotic project. He recognized the immediate benefits for a neighborhood of which he had become a dedicated champion during his days as a caseworker for the City of Cleveland’s welfare department. Minter also saw the project’s potential to provide concrete evidence that middle-class suburb dwellers, provided the proper inducements, could be persuaded to live in and help to revitalize central-city neighborhoods.

The civic affairs program officer persuaded the board to make a program-related investment of $800,000 in Lexington Village—only the second time to date that the foundation had used the still-unconventional tactic of investing principal in a project. Minter then went on to assemble a coalition of 27 public and private lenders that provided the additional $13.3 million in needed working capital.

The marketing of the Phase 1 units, completed in 1986, was so successful that another $6.4 million in bank loans and private-sector and foundation investments was raised to build 93 more units on adjacent land. As the foundation had believed, Lexington Village set off a chain reaction of new development in Hough, including the Church Square shopping center, additional townhome complexes along the main arteries of Chester and Euclid Avenue, and the construction of single-family residences on side streets. Hough is no longer a dead zone, and redevelopment is slow but ongoing.