Historic Tax Credits News Briefs - December 2015

Tuesday, December 1, 2015

The Advisory Council on Historic Preservation (ACHP) on Oct. 23 released a document, “Guidance on the Use of Real Property Restrictions or Conditions in the Section 106 Process to Avoid Adverse Effects.” The guidance is meant to help federal agencies that are considering placing a preservation condition on properties they intend to transfer out of federal ownership. The information will also help agencies that desire to use a preservation condition to support a no-adverse-effect finding in the Section 106 review of the transfer. In addition, ACHP designed the content to educate historic preservation stakeholders and the public regarding preservation conditions. ACHP’s full guidance is available at www.achp.gov.

***

On Oct. 20, Bellwether Enterprise Real Estate Capital LLC announced the origination of an $8.15 million commercial mortgage-backed securities loan for the financing of Scott’s Edge Apartments, located in Richmond, Va. Bellwether Enterprise, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., structured new permanent financing around a historic tax credit structure (HTC), which included the negotiation of a subordination and nondisturbance agreement with an HTC investor. The loan provides 10-year fixed rate financing, with a three-year interest period. Following that is a 30-year amortization schedule. Scott’s Edge Apartments is an adaptive reuse, multifamily property providing 94 luxury apartment units in three historic warehouse buildings. Construction was complete in October 2014.

***

Blank Rome LLP announced Oct. 13 the appointment of Scott DeMartino as partner for the law firm’s tax group. DeMartino advises lenders, investors, developers and nonprofit sponsors on how best to use HTCs, new markets tax credits (NMTCs) and renewable energy tax credits (RETCs) as sources of project financing. DeMartino previously worked as counsel at Bryan Cave LLP, but began his career as a senior tax advisor for national accounting firms. He was recently elected vice president of Washington, D.C.’s, Preservation League, of which he also chairs the Governance Committee. He is located in the Blank Rome’s Washington, D.C. office.

***

The Illinois Department of Revenue ruled that a taxpayer cannot transfer or sell its River Edge HTC in Private Letter Ruling (PLR) IT-15-0001. The PLR also stated the HTC does not apply against the personal property replacement income tax imposed on a partnership or S Corporation. However, it can pass through to partners. The department held that an agreement between partners cannot alter the allocation of a passed-through credit. There is no sale or transfer of the credit allowed to another taxpayer, and there is no recapture provision and no provision is made to carry over excess credits to later taxable years. The PLR is available at www.revenue.state.il.us.

***

On Nov. 3, the U.S. Department of Housing and Urban Development (HUD) and the National Trust for Historic Preservation awarded the Salvation Army and its development partners with the 2015 National Trust/HUD Secretary’s Award for Excellence in Historic Preservation. The award recognized the $12.29 million restoration of Father Dunne’s News Boys’ Home and Protectorate, founded in 1906. The three-story building served as a refuge for orphaned or abandoned boys. The former boys’ home underwent multiple renovations during the course of several decades and was converted into the 3010 Apartments. A total of 58 one-bedroom, private residential apartments are available to low- to very low-income adult residents, with preference given to Veterans and those experiencing long-term or chronic homelessness. Rehabilitation work was performed on the main entry and staircase, the stained glass windows and the hallways. The former chapel now serves as a meeting space while the reception room was reopened and restored to its original appearance. The restoration of Father Dunne’s News Boys’ Home and Protectorate is part of the Salvation Army’s Midtown Project. The Midtown Project will include an estimated $48 million in new construction.

Journal Category: