Greetings Cinnaire team,

Thank you to all who participated in the brief survey regarding your views concerning our Strategic Plan. The responses were quite positive, which was good to see, but we also asked some pointed questions designed to draw out any concerns you have and/or your views regarding potential pitfalls. We want to know what your really think.

There were five recurring themes in your responses. They are listed here in order of frequency raised (most frequently raised first), along with brief replies from Mark/me in green.

·        Are we going to invest in back office staff, including underwriting? 
There were repeated suggestions that some team members are getting burned out.  The Strategic Plan includes a staffing plan that was designed to be comprehensive. It was developed based on the needs of the business units (LIHTC, Lending, Development, Title) but thought was also put into required support staffing. Once the metrics were finalized, Kevin worked with the support teams to understand the level of staffing required to manage/process the business volumes. That being said, there is no way to predict staffing needs with 100% accuracy and we will need to make adjustments. If you have concerns regarding staffing levels, you should discuss your concerns with your manager.  If that doesn’t work, speak with a member of the Executive Team.  We want to get this right, and we also want to achieve a manageable work/life balance.

·         Are the lending goals too aggressive?  
The lending goals are certainly too aggressive if we stick with the same approach to growing the Lending business. That is not our plan, because the status quo has not worked. We are looking at a variety of options to adjust our approach. Some options involve material but predictable changes to our approach, but we are also looking at options that would involve a significant shift in approach. That work is underway and we should arrive at a conclusion before the end of the year. All options are on the table. Stay tuned.  Katey will be following up with additional information about the components of the lending growth goals and some additional insights.

·        Will we be able to raise the right capital for us to be successful?  
We understand this concern. Building a plan for raising the right capital for all of our business lines was a major focus of our strategic planning work. Just as we are growing our expertise in lending/development, we are growing our expertise in raising capital for lending/development. Lending is a stage 2 business in all functions (business development, underwriting, asset management, capital raising, etc), and we are on a learning curve. Chris and Brett are working with Compass Advisors on a Business Funding Plan and a Capital Allocation Plan. The folks at Compass are experts at this work. Stay tuned for more on this work later in the year.

·        Do we have the will to change…?

Cinnaire has a “cultural reluctance to change.” People want to believe we will execute, but they want to see action before they will truly believe.  Fair enough. We have certainly struggled to grow the lending business, and we would have faced similar challenges in growing the development business. That is why we engaged in this strategic planning process.

Consider some of the actions we’ve already undertaken, which point to our will to change and determination to see this through. We not only developed a strategic plan, but we developed detailed annual metrics and a five-year financial forecast. A tremendous amount of thought went into this.  We’ve committed to hire the staff we need to be successful, and recruiting is underway. We are pushing ourselves to build out our capabilities immediately by engaging in work such as the development of a Business Funding Plan and a Capital Allocation Plan. These are all major changes, and they were all referenced and committed to in the Strategic Plan. If you have concern about our commitment to execute on this plan, Mark and I urge you to read the Strategic Plan again and make note of all of the specific commitments that are included.

We have made detailed commitments to our Board of Directors and the leadership team will be evaluated based on our success in achieving this change. We will be reporting to the Board on a quarterly basis, and we will highlight where we are on track AND where we are off track. If we are off track, we will detail the changes we are making. We are all in, and we are personally accountable for specific and measurable accomplishments. We want you to hold us accountable too. If you see us not delivering, please raise the issue to Mark, me or anyone on the Executive Team. Lets hold each other accountable and have the commitment to have Crucial Conversations when necessary.

·        Will we track the metrics and hold ourselves accountable?  

See above 😊

If you have any additional questions, don’t hesitate to reach out.
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