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Sofia, Bulgaria Achieving Self-Sufficiency through Innovative Real Estate Loan Program
Morning and evening, doctors, nurses and visitors step down to the coffee shop located in the rear of the hospital for a bite to eat or a much-needed reprieve. It is part of their daily ritual here in Sofia, where some stop in for their daily java and pastry while others enjoy a juice and speak about the friend or relative with whom they are visiting. While all appreciate the friendly faces behind the counter and the warmth of the locale, few know the origins of the shop or its greater significance to the local Jewish community that operates it.
This former Jewish hospital in Sofia, Bulgaria, was built in 1930 and nationalized in 1959 by the Communist regime. The property was used as a state-run hospital and was restituted in 1997 to the Jewish community, which allowed the state hospital to remain in the building and only charged them a symbolic "social rent". But then the community discovered an unused storage area at the rear of the building, which would soon change the community’s perception of real estate and entrepreneurship. Seeing the potential to economically empower the local Jewish community, in 2001, JDC issued them a pilot loan with which they developed a coffee house and a gift shop [which has since become an insurance office space] in the hospital building. "These loans from JDC are an example of Jewish solidarity in action," says Sara, the Jewish community’s executive director. The idea is that over time and with borrowed monies from JDC, these restituted properties can become income-generating sources for the Jewish community that could then support ongoing renewal activity. The experiment proved a huge success, and the community soon began repaying the loan with the rental proceeds from both stores. This loan became the precursor to JDC’s Strategic European Loan Fund (SELF), founded in 2003. Since its founding, JDC has provided not only critical emergency aid to Jews in need but also loans to income-generating enterprises as a means of getting Jewish communities back on their feet and encouraging longer-term self-sufficiency. "The modern day example of this approach is the Strategic European Loan Fund (SELF), which is helping to bring the post-Communist reconstruction of Central and Eastern European Jewish life to the next level", according to Earle, Chairman of the JDC SELF Committee. Through privately-donated monies in tandem with technical assistance from JDC, communities are enabled to turn restituted properties from a liability into a commercial boon that will help to fuel further Jewish communal activity. 
JDC continues to provide training and on-site consultations; facilitate the hiring and support of professional-level community property managers in Romania, Bulgaria, and Poland, as well as a European Property Management Coordinator for JDC, based in Budapest; and to facilitate the process by which communities apply and are awarded the SELF loans.
In January 2006, five years after the initial loan to Bulgaria, the local Jewish community in Sofia will complete its repayment. "This marks not only a monumental step in the community’s quest for financial and greater independence, but also an important step for the SELF program," explains Jerome, Chairman of JDC’s Property Reclamation Committee. "This was the first loan of its kind, and its being paid in completion is testament to the vision and determination of both JDC and the local communities in reaching their shared goal of self-sufficiency for Jewish communities around the globe." In the interim, the community has also parlayed its learned real estate savvy into other profitable projects and successfully applied for three additional SELF loans. Following the hospital project, the Jewish community in Bulgaria received support to convert a former Jewish orphanage across from the main synagogue in the city center into a self-sustaining, mixed commercial and Jewish communal site. While a SELF loan is being used to convert the first two floors into upscale retail and office space, the third and fourth floors are being restructured into a much-needed second Jewish Community Center (JCC) with capital commitments from World Jewish Relief in the UK. "What we could once only dream of is today a reality," says Sara. Interest-free monies from SELF are helping many Jewish communities in Central and Eastern Europe to shape their own financial future. The recent approval of four new projects by a JDC committee brings the total number of SELF loans to 12, including an early loan of $45,000 to the Jewish community in Bratislava, Slovakia, which they used to upgrade the heating system in a former Jewish hospital and convert the building site into an extended stay hotel. The loan has successfully been repaid. An adjustable repayment schedule enables Jewish communities to retain some of their income during the repayment period — a unique characteristic that helps the community to appreciate its efforts and motivates them to develop other projects. In Bratislava, for example, JDC lent the Jewish community funds for preconstruction startup costs such as design, engineering, and attaining building permits in order for them to begin a multi-million dollar project with an outside investor. "This would never have been a possible endeavor for the local community without SELF assistance," notes Herbert, JDC Assistant Executive Vice President. Additionally, loans in both Lodz and Warsaw, Poland have helped the local communities improve the infrastructure of buildings so that they can then be rented out to commercial tenants. In the longer term, profits from these buildings will fund Jewish institutions and activities. "JDC is enabling Jewish communities in Central and Eastern Europe and beyond to see themselves as more than social service or cultural institutions," says Herbert. "More and more, we are helping them to realize their potential as strong partners in meeting the challenges facing them and world Jewry." To find out about the SELF program guidelines and for an application, click here. January 2006 |
