From her office in Covington’s RiverCenter, Jeanne Schroer sees the development in downtown Cincinnati, but she doesn’t see it stopping at the river’s edge.

“I think what we’re doing is an extension of the redevelopment of the Cincinnati urban core,” says the president and CEO of the Catalytic Fund Corp. of Northern Kentucky. “We are an extension of what’s happening in Over-the-Rhine, downtown Cincinnati and the Banks. I view our region’s downtown as a complete urban core that includes assets on both sides of the river and happens to have a beautiful river as its Main Street.”

The private, nonprofit Catalytic Fund, which came out of the Vision 2015 urban renaissance initiative, is having an impact on Northern Kentucky’s urban neighborhoods after getting off to a slow start due to the 2008 recession.

The fund was launched less than a month before the Sept. 15, 2008 bankruptcy filing of the Lehman Brothers investment firm, which spurred the major financial crisis. It took four more years to assemble the $10 million in investment pledges for the fund.

“At the time, it was frustrating,” says Schroer, a real estate professional who has led the fund since its formation. “But it allowed us to put together a very detailed business plan and real estate development strategy, so that when the fund finally was completed at the end of 2012, we had targeted exactly what we wanted to do.”

The first fund investor was Bill Butler, founder and chairman of Corporex Companies, who committed $1 million.

“We’ve made a lot of progress in Northern Kentucky’s suburbs over the last 25 years, but there’s a huge opportunity for more progress in the urban core,” says Butler, who is currently vice chair of the fund’s board.

“The word CORE comes from the Latin word for heart. For a community to be vibrant, its heart must be vibrant as well,” he says.

Over the last 18 months, the Catalytic Fund has provided funding or development services for nine projects. It has directly invested $915,000 supporting a total investment of $25.5 million. Those projects are creating 170 permanent jobs, not counting construction jobs, some 134,000 square feet of commercial space and 86 residential units.

Schroer, who has spent 30 years in the real estate industry, makes a strong case for investing in Northern Kentucky’s cities.

First, she says, a sense of place is critical to economic development today. “Companies won’t locate where they don’t think they can attract the skilled employees they need.”

And demographic trends continue to favor investment in cities.

By 2030, the biggest increase in households will be singles and childless couples. All kinds of data show the millennial generation wants to live in cities, not suburbs, she says.

Finally, she says, there’s that most basic real estate fundamental: location.

“Look where Northern Kentucky sits: adjacent to a major metropolitan downtown, which is on an upswing, with world class arts and major league sports facilities. Imagine the impact when GE’s global operations center has 1,500 jobs right there,” she says pointing across the river. “There will be a huge demand for residential units, retail and restaurants right here.”

Butler says Schroer, who spent part of her career at Corporex, “brings tremendous passion and skill” to her role as CEO

“The Fund has already accomplished a lot, but that’s nothing compared to what it will do over the next 18 months,” he says.

The fund’s biggest investment to date was $511,000 for the restoration of downtown Covington’s historic Mutual Building at 619-629 Madison Ave. It was one of six funding sources for the $2.6 million renovation project begun in July to transform the vacant, three-story downtown building into 11,000 square feet of retail space and 15 market-rate apartments.

“What we do is help to build what I call the funding stack. We assisted the developer with obtaining city grants and loans, we applied for a Duke Energy revitalization grant and assisted with arranging the first mortgage loan from Citizens Bank,” says Schroer.

Although it has been compared with the Cincinnati Center City Development Corp. (3CDC), the private nonprofit that has energized urban redevelopment in downtown Cincinnati and Over-the-Rhine, the Catalytic Fund is not exactly the same.

“We have similar goals and objectives as 3CDC, but we’re sort of a hybrid with elements of 3CDC and the Cincinnati Development Fund,” says Schroer.

As a non-traditional lender, the Catalytic Fund doesn’t provide primary financing, but what’s known as gap financing.

“We fill the gap between what the primary lender will provide and what a developer’s able to provide in equity,” says Schroer. “We wouldn’t get in unless we’re needed to make the project come together. That’s one of our criteria: That the project needs our financing to be executed. All of our investments are very strategic.”

For example, at the Northern Kentucky Scholar House, on West Sixth Street, in Newport, the Catalytic Fund provided $500,000 in standby financing to allow the $8.7 million project by Newport’s Neighborhood Foundations (the Housing Authority of Newport), Brighton Properties and the Model Group to move forward.

The novel project, which will create 48 apartments and on-site childcare and other services for single parents pursing a two or four-year college degree, is financed using low-income housing tax credits and other grants. But because all the grants weren’t awarded when the application for the tax credits was due, the Catalytic Fund stepped in.

“We were prepared to fund with a standby loan,” says Schroer. “As turned out, they got the grants and the project was better off funded that way.”

The Fund, which has a staff of five, also provides a variety of real estate services such as deal structuring.

For example, the Fund helped arrange a complicated property swap to allow the $4.8 million Kentucky Career Center to occupy the former Robke Chevrolet site on Madison Avenue and expand the Northern Kentucky Life Learning Center into the former Stewart Iron Works building on 18th Street in Covington.

“We didn’t invest any money, but we basically spent about 18 months putting the transaction together,” she says.

The Fund also is applying to the U.S. Treasury to obtain the certification needed to apply for an allocation of new market tax credits and other financing for redevelopment projects. Schroer says she’d like to eventually double the Fund to $20 million.

“We could undertake more projects and larger projects,” she says. “I’m impatient. I want things to happen a lot quicker, but I feel good about what’s happening.”