New Markets Tax Credits News Briefs - April 2011

Friday, April 1, 2011

The Phoenix Community Development and Investment Corporation (PCDIC) approved a $34.3 million new markets tax credit (NMTC) loan for RED Development's construction of the Kimpton Palomar Hotel in downtown Phoenix, Ariz. The NMTC finance structure, which bridged a construction financing gap, used $25.9 million in developer equity to leverage $8.4 million in the NMTC structure. As part of the loan, RED Development committed a $1 million endowment to PCDIC's foundation to benefit low- and moderate-income college students living in NMTC census tracts. The 240-room hotel is the second phase of the CityScape project, which represents a nearly $500 million investment and the revitalization of two blighted blocks in the downtown core.

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The United Way of Greater Cincinnati (UWGC) completed a $16 million renovation of its facility and the construction of a new conference and training center. The project included the replacement of antiquated plumbing, electrical, mechanical, fire protection and technology systems with energy-efficient systems that are expected to save UWGC $150,000 a year in operating and maintenance costs. UWGC's new facility, the Fifth Third Convening Center, can accommodate as many as 280 visitors and features a reception area, meeting space and kitchen facilities. UWGC had planned to postpone the project but the availability of $16 million in NMTC financing made it possible for the not-for-profit to move up the timing. Financing sources include Fifth Third Bank, The P&G Fund, GE Aviation and Ohio National Financial Services, as well as other capital campaign donors.

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Orchestra of St. Luke's (OSL) received $4.6 million in NMTC equity for its new home, the DiMenna Center for Classical Music. The center will be New York City's first space dedicated to classical music rehearsal, recording and education, according to OSL. Goldman Sachs Urban Investment Group served as the equity investor and both National Community Fund I LLC and Solomon Hess Capital Management provided NMTC allocations.

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Motown Construction Partners secured more than $50 million to redevelop the historic David Broderick Tower in Detroit, Mich. When renovations are completed in September 2012, the 34-story landmark will house a restaurant and lounge, a business incubator sponsored by Invest Detroit and more than 100 apartments. Bank of America, Invest Detroit, Chase Bank and the Michigan Historic Preservation Network helped finance the transaction, which included NMTCs, federal and state historic tax credits, and state brownfields tax credits. Law firm Nixon Peabody LLP served as advisor to Bank of America in the transaction.

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Cincinnati Zoo & Botanical Garden is using NMTCs and renewable energy incentives to finance a solar project that is expected to provide one-fifth of its energy needs. A canopy of more than 6,000 solar panels will comprise the nearly 1.6-megawatt system, which upon completion will be the country's largest publicly accessible urban solar array. Melink Corporation is the project designer, developer, owner and operator. Other partners include PNC Bank, the Uptown Consortium, the National Development Council and FirstEnergy Solutions.

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