Case Study

NMTC A Community of Investors

9 min read

Mosaic’s Golaski Labs uses NMTC, OZ Funds…and Crowd Funding

The question is: Why would a successful, experienced developer that relatively easily could have raised the $7.2 million needed to build a mixed-use Opportunity Zone project in northwest Philadelphia from a small number of well-heeled investors, instead go for a complex financing structure involving investments as small as $500?

The answer lies in the very reason Gregory “Greg” Reaves and Leslie Smallwood-Lewis got into the development business in the first place.

Golaski Labs is a 40,000 square-foot, mixed-use development, located in the historic Philadelphia community of Germantown. The site is the location of the former Golaski Laboratories Vascular Prosthetics and Biomaterials factory that manufactured Dacron blood-vessel replacements, at the corner of Wayne Avenue and Apsley Street. It includes 15,000 square feet of commercial area, space for co-working and a business incubator and features a coffee shop and microbrewery restaurant, as well as 39 residential units. The project is being funded using Historic and New Market Tax Credits, and a new resource for the affordable housing industry: crowdfunding.

Some backstory is in order.

Inspired Transition
Greg Reaves graduated from college (where he played varsity soccer) with a degree in chemical engineering and began his professional career with McNeil Consumer Products, a division of Johnson & Johnson, then to Merck and Company, where he quickly rose through the corporate ranks, eventually becoming vice president for research, communications and policy, which included management of the celebrated Merck Manual.

“A good friend of mine owned a large, suburban-based Philadelphia real estate company that had big tenants, like Walmart, Lowes and Ikea, and brought me on,” Reaves says.  If the transition from the upper reaches of the corporate world to real estate development seems a strange one, Reaves explains, “The common thread, the one thing I’ve always had was math, so I was able to analyze things in a systematic way. This let me take the emotion out of decisions and deal with facts. And when I saw what was involved in real estate—operations, management strategy—in an industry I never knew existed, I was fascinated.”

“Still,” he admits, “it was a big transition going from a large corporation to entrepreneur: No secretaries, no support staff. I had to actually do the work I talked about!”

The company, which Reaves joined in 2004, was the Goldenberg Group, where he rose to become a vice president and chief operating officer. There he met Leslie Smallwood-Lewis, a Villanova University Law School graduate who became Goldenberg’s senior vice president of development.

“We decided we wanted to do something needed in the market,” Reaves recalls. “There were very few people of color making decisions about how neighborhoods were developed. There was a lot of development going on [in traditional commercial corridors], but significant dollars were not being invested in neighborhoods. I had found much more diversity in corporate America than in real estate, whose companies and practices were built more on family legacies than sound engineering and business principles.”

Creating a Mosaic
Reaves and Smallwood-Lewis opened their new company, Mosaic Development Partners, in Philadelphia in 2008, “About two months before the market completely crashed,” Reaves notes. The name Mosaic is fitting, connoting as it does the arrangement of small pieces of different colors to create an artistic and satisfying whole. “We are multicultural in thought and focus,” Reaves says, and he could have added, hiring policy. “How do we help [all minorities and women] reach professional levels and become attorneys, engineers and architects?

“For the first three years, we couldn’t get any traction, but we started to build a pipeline, started working in neighborhoods with local community groups.”

Mosaic’s first project came in response to a $20 million RFP for a housing and mixed-use building, “in a very challenged neighborhood one block from Temple University.” Diamond Green’s 128,000 square footage includes 92 apartments, 12,000 square feet of retail space and a parking garage. The development, which opened in August 2012, was completed in only nine months using modular construction techniques.

“In that tough economy, we had to use modular, off-site construction,” Reaves says, his math background having paid off again. “Now we’ve completely bought into that as a strategy going forward.”

Edison Square is a $13 million, 500,000 square-foot, community-based shopping center that arose from the site of the long-shuttered Edison High School that Mosaic bought from the Philadelphia School District, in a previously high-crime area. The project, which opened in 2014, created more than 100 local jobs and employed a woman-owned general contracting firm. Mosaic used New Market Tax Credits to help finance the project.

The nearly 20-year-old New Markets program fits perfectly into Mosaic’s wheelhouse, a government initiative that generates more tax revenue than it expends and designed as it was to increase the flow of capital to businesses and low-income communities. According to the New Markets Tax Credit Coalition in Washington, DC, the $42 billion in direct NMTC investments between 2003 and 2015 leveraged nearly $80 billion in capital investments to businesses and revitalization projects in communities with high rates of poverty and unemployment. Between 2003 and 2015, the program generated more than a million jobs at a cost to the federal government of less than $20,000 per job.

That facilitates a lot of new taxpayers. And as Reaves declares, “Our mindset is to build wealth in communities of color.”

The second phase of Edison Square will be known as Edison 64, a $13 million, 68-unit veterans housing development dedicated to fallen soldiers from Vietnam. The former annex of Edison High School is being converted into a 60,000 square-foot residential development that will also provide training and job placement and is being developed in conjunction with Orens Brothers Real Estate, Inc. and the Veterans Multiservice Center with the support of Low Income Housing Tax Credits from the Pennsylvania Housing Finance Authority. Edison High School lost 64 graduates to the Vietnam War, one of the highest tolls in the nation, which has particular significance to Reaves, a military brat born in Germany who partly grew up in California and went to high school in New York state.

Eastern Lofts, in a former Railway Express building that had remained roofless and vacant for decades, opened in 2016 with 37 residences, a parking garage, eight office spaces, a community-based child care center and a coffee shop. Using New Markets and Historic Tax Credits, the 70,000 square-foot building, “has helped the [North Philadelphia] neighborhood become very diverse,” says Reaves.

Edison Square and Eastern Lofts are emblematic of the objective put forth on Mosaic’s website of focusing on “improving communities through the redevelopment of real estate,” through “building new ideas, especially in locations where solutions aren’t obvious.”

A Community of Investors
Which brings us back to Golaski Labs, which Reaves characterizes as “a mix of everything we’d done and learned. We decided the highest and best use for the site would be affordable market-rate residential at 80 to 120 percent of AMI [area median income] and commercial businesses to support the residential New Markets tax structure.”

In addition to New Markets Tax Credits, Golaski Labs is in an Opportunity Zone, which relieves the federal taxes on capital gains income from any source if that profit is reinvested in a state-designated, low-income or economically distressed area. The incentive was part of the Tax Cuts and Jobs Act of 2017. Accredited investors, an SEC term for those with an annual income of at least $200,000 for the past two years or a net worth of at least $1 million, can invest a minimum of $5,000.

“We were involved with Opportunity Zones before the term existed,” says Reaves. “Eighty percent of our projects happened to be in Opportunity Zones.”

Not only is Mosaic employing modular construction at Golaski Labs, in addition to repurposing the old commercial structure, it is getting the community involved on the most basic level: through personal investment.

Reaves says, “Typically, our investor is a high-net-worth individual prepared to put in $500,000-plus. That creates nice projects, but the moment we don’t own that project, anything can happen. What we are interested in is creating a mechanism for [neighborhood residents] to invest.”

That mechanism is through a crowdfunding service called Small Change, whose website,, proclaims:




The minimum investment through this mechanism is $500. “Fifteen hundred dollars with a 20 percent return is not much,” Reaves concedes, “But it is powerful in changing mindsets and giving people a tangible stake in their own communities and their shared concerns. I don’t underestimate the power of money!”

Having said that, he and Smallwood-Lewis did underestimate what it would take to educate a population with little previous investment opportunity or experience. For Mosaic’s next project, they plan to budget for an educational outreach effort.

The community investment component is one of the ways Reaves hopes to preserve Opportunity Zones for their intended purpose and are not so “successful” that they displace local businesses and residents, as has been feared by many stakeholders and observers.

“Our problem is a little bit like Don Quixote tilting at windmills, in that what we’re fighting, what we’re up against all the time, is the triad of infrastructure, tradition and institutional thinking. Our approach is not consistent with current thinking.”

Ultimately, Reaves believes that education is the key to minority advancement and transforming neighborhoods, and those cities and areas with the highest levels of education have fared the best. “We really haven’t mastered education yet.” He sees education and economic empowerment going hand-in-hand. “It’s one of the creative ways to develop neighborhoods,” he says.

His wife Beth has a key role in that effort as president of the Washington School for Girls, a private, tuition-free Catholic-based school in the Anacostia section of the nation’s capital, whose stated mission is to close the educational gap and broaden the educational opportunities for girls from economically disadvantaged communities in grades three through eight. Beth and Greg have three children: Jordan, Josh and Mia. They live in the DC area, and Greg spends an average of two days a week in Philadelphia.

He hopes Mosaic Development Partners can be a model for other companies in terms of inclusion and diversity, both corporately, and in the urban communities they impact.

“We are a for-profit company, and we need for-profit models,” he states, “but ones that meet the needs of the people we’re working for. That’s the goal.”

Story Contact:
Gregory Reaves,