Other Success Stories
We are an affiliate of
Our subsidiary
Cape Cod Fisheries Trust
Developing strategies for sustainable ecosystems
Issues
Marine fisheries and fishing communities in the United States face a myriad of challenges: depletion of resources through over-fishing, excessive by-catch, habitat damage, as well as a rapidly increasing permit ownership consolidation among large corporations, and flawed public policies. The impacts of these problems are most severely felt by the rural coastal communities and fishing families that have for generations depended on the health of the fisheries resource. Extensive job loss, reduced wages, business closings, out-migration (defined as the transfer of the industry to another location as well as transfers of fishermen to other jobs elsewhere), and diminishing fish populations are among the most damaging and chronic effects.
Distinct from community-based management of fishery quotas, community ownership of quotas – held in a permit bank, fishery trust or similar vehicle – is fundamental to the success of a catch-share fishery. Communities are uniquely positioned, politically and practically, to own and distribute fisheries quota as a profitable and sustainable business operation. Communities also are best positioned to reinvest in fisheries management infrastructures, but for the local fishing businesses in those communities to thrive, they must be able to access financing to become long-term owners in the fishery.
Outcomes
In 2007, CLF Ventures collaborated with the Cape Cod Commercial Hook Fishermen’s Association (CCCHFA) to design and launch the Cape Cod Fisheries Trust (CCFT). The trust’s aim is to obtain fishing licenses and other “fishing rights” from the open market and lease these permits back to local fishermen to access fishery resources off of Cape Cod. In return for a permit, fishermen are required to follow predetermined sustainable fishing guidelines. The CCFT protects fisheries and improves marine management. In addition, it guarantees continued access to this resource by local commercial fishermen and preserves an important way of life for Cape Cod communities.
Specifically, CLF Ventures developed a business plan and fundraising strategy to attract institutional capital, identified and engaged capital resources, and structured a trust to hold the permits and lease-proceeds. Through development of the CCFT, CLF Ventures’ expertise in designing innovative market mechanisms will significantly advance the goals of CCCHFA, those of the local commercial fishing industry, and the environment of the Cape.
Services Utilized
Analysis
CLF Ventures identified a range of financing approaches, including PRI/private equity hybrid structures, private and government loan guarantee programs for qualified fishing businesses, new market tax credits, community allocation programs within regional fisheries management councils, underwriting criteria, and a CDFI (Community Development Financing Institution) training program on the community quota asset.
Communication
CLF/CLF Ventures has convened discussions with national thought leaders on how fisheries trusts (or any entity formed to hold quota share) can minimize capital gains and tax exposure to fishermen leasing or selling quota to the Trust and how the Trust can maintain good standing with the IRS when fishing quota is leased at below market rates. New England has a number of active permit banks, and CLF Ventures together with CLF has completed plans for a regional symposium to broaden the network of communities for whom such a vehicle might be appropriate. The goal of this one-day symposium in October 2011 is to understand the current challenges in capitalizing and managing these permit banks, to identify ways existing banks can grow and strengthen their operations, and to launch recruitment efforts to build a robust network of functioning permit banks.
Organizational Development
CLF Ventures built a matrix of replicable grant/contribution, debt, credit enhancement, and equity options as well as an itemization of alternative structures which would optimize the Trust’s objectives for purchasing, holding, leasing, and potentially selling fishing quota. Finally, CLF/CLF Ventures staff has helped create a suite of time- phased conservation goals with initial metrics of success. These metrics would be included in leases between the Trust and community fishermen.