GRAND BOULEVARD — The developer trying to revive the Forum has decided crowd-funding won’t work for redevelopment projects on the South Side, and is now relying on changes to federal regulations to fund the project.
Bernard Loyd has spent five years trying to fund the revival of the Forum building at 318 E. 43rd St. and is now looking to a breed of small investors newly on the scene to help him move forward.
Loyd saved the 119-year-old building right before it was about to be demolished in 2011, and has struggled to cobble together enough donations, investments and tax subsidies to get his $25 million vision of a community hub with art and performance spaces, a coffee shop and other small retail shops.
Where other bold visions would turn to Kickstarter or another crowd-funding platform to rally lots of small donations to get the project started, Loyd said it’s not a realistic option for projects like his.
“Kickstarter tends to be limited to smaller projects,” Loyd said. “Some projects have gotten bigger, but that very much has been the exception.”
He said crowd-funding tends to work best when it operates almost like a pre-sale for a product someone is developing.
“For folks like us, we’re not selling anything,” Loyd said. “Most folks are willing to make a donation up to a certain amount, but after that they want something back.”
He said he’s hoping to use a change in regulations for investors to give people cash back for the money they put into his project.
Until new federal regulations kicked in, Loyd could legally only sell securities offering a return on the investment to a specific class of investor — the wealthy.
He was limited to wooing “accredited investors,” people with at least $1 million in net worth, excluding their home or an income of at least $200,000 a year for the last two years. Those limitations meant only 3 percent of the U.S. population was legally allowed to invest in startup projects, and only a fraction of those people actually do, according to an analysis by Quartz.
But in May, federal securities law changed creating a whole new class of small investor, a group Loyd hopes will see the South Side as a place to invest.
“Now we can invite people who are neighbors to invest with us if they believe in what we are doing,” Loyd said.
New platforms are already popping up to take advantage of the change, and Loyd is taking advantage of Wefunder to try to raise $100,000, offering a return of 5 percent over the two-year term.
True to all crowd-funding sites, there are some perks. For the minimum investment of $100, investors get an open invitation to all Bronzeville Bikes events. The perks range up to a private catered dinner for 50 people and a personal tour of all of Loyd’s projects, including the Forum and Bronzeville Jerk Shack for investors who commit $50,000 or more.
So far the project has attracted $17,000 in investments from everyone from Mountain Headwear founder Alan Tabor to Lelan Bosch, who works in electronics at a management and drone firm in Fargo, N.D., according to his profile.
Loyd is hoping to show that his project can legitimize the idea of small investors pooling their resources on the South Side and the regulatory change can fuel more projects like his own.
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