New Markets Tax Credits News Briefs - December 2014

Monday, December 1, 2014

Pennsylvania Gov. Tom Corbett announced Sept. 29 the completion of an $8 million new markets tax credit (NMTC) transaction to help fund construction of Susquehanna Health Innovation Center, an outpatient services center in Williamsport, Pa. The new, 88,000-square-foot center is located on the campus of Williamsport Regional Medical Center and is designed to provide a central location for access to medical services. The new center is part of a $268 million project of Susquehanna Health, which includes an expanded cancer treatment center and energy service center. Development is expected to create 123 temporary construction jobs and 12 permanent jobs upon completion. Total project costs will be approximately $25 million. Construction is underway and is expected to be completed by February 2015.

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On Oct. 2, the U.S. Department of the Treasury announced it guaranteed an additional $200 million through the Community Development Financial Institutions (CDFI) Bond Guarantee program. This brings the total amount guaranteed under the program to $525 million. The bonds provided through the CDFI Bond Guarantee Program ensure long-term, fixed-rate capital for low-income properties and underserved communities. Four eligible community development financial institutions (CDFIs) received bond loans under the announcement. Capital Impact Partners received a $55 million bond loan to finance health-care facilities, senior living and long-term care facilities, affordable housing units, charter schools, commercial real estate developments and nonprofit organizations. The Illinois Facilities Fund received a $25 million bond loan to finance affordable housing units and charter school facilities. Low Income Investment Fund received a $65 million bond loan to finance senior living and long-term care facilities, commercial real estate developments, health-care facilities, charter schools, affordable housing units and day care centers. The Reinvestment Fund received a $55 million bond loan to finance commercial real estate developments, health-care facilities, charter schools, affordable housing units and day care centers.

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The CDFI announced a new capacity-building initiative training and technical assistance series Oct. 9 that will focus on native CDFIs. The series,Building Native’s CDFIs’ Sustainability and Impact, is scheduled later this year. Presented by NeighborWorks America, the series is designed to provide specialized training and technical assistance to Native CDFIs in order to promote their growth and sustainability, and to improve their ability to deliver financial services and products to Native American, Alaskan Native and Native Hawaiian communities. Examples of assistance include developing lending policies and procedures, improving compliance practices, strengthening board governance practices and exploring capitalization strategies. All certified Native CDFIs are eligible to participate and may elect a combination of services that best suit their needs. Emerging Native CDFIs are eligible to participate through a case-by-case basis. More information is available at www.cdfifund.gov.

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Tax Advantage Group, a consulting firms specializing in NMTCs, hired Pete Byford as NMTC senior program manager. His responsibilities will include assisting qualified development source capitals through the use of the federal NMTC program. Prior to joining Tax Advantage Group, Byford was general counsel and executive vice president of S.B. Phillips Co., Inc. Before that, he was president of Banker Exchange, LLC, a national qualified intermediary for Section 1031 tax deferred exchanges. He began his career as a tax and corporate attorney with Leatherwood Walker Todd & Mann, P.C., a law firm now known as Smith Moore Leatherwood LLP. Byford received his LLM in taxation from the University of Denver and his JD from the University of South Carolina School of Law.

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The American Conservatory Theater (ACT) entered the public phase of fundraising efforts Sept. 11 for the construction of the Strand Theater in San Francisco, an extension to the ACT Theater. Upon entering the public phase, funds totaled $28.9 million, or 87 percent of total needed for the $33.3 million renovation. The public phase provides ACT subscribers and donors, as well as the San Francisco Bay Area community, the opportunity to support renovations. During the silent phase of the campaign, ACT raised the $28.9 million in private donations, NMTC equity and historic tax credit (HTC) equity. The renovations will expand the Strand Theater and restore the original 1917 façade, and will include a 285-seat theater, a 120-seat black-box theater and café while creating 30 new permanent jobs. The building will feature mixed-use space for classrooms, rehearsals and cabaret performances allowing ACT to increase its capacity as an educational institution for the ACT Master of Fine Arts and Young Conservatory programs. The Strand Theater is expected to open in spring 2015.

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On Sept. 23, the Eastern Shore Land Conservancy (ESLC) received $1.3 million in NMTCs for the renovations of the Eastern Shore Conservation Center in Easton, Md. The center will be located in the previous McCord Laundry building and Brick Row building. Design and renovation costs of the buildings total nearly $7.6 million. ESLC has raised $6.3 million. Renovations will include a café, a courtyard open to the public and meeting rooms. A total of 50 jobs are expected to be created in downtown Easton.

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Morgan Stanley, Local Initiatives Support Corporation (LISC) and CDC Small Business Finance announced Sept. 24 a $25 million Clinton Global Initiative (CGI) Commitment to Action for the expansion of the Job Creation and Community Revitalization Fund. This initiative allows small businesses to access affordable capital that otherwise would not be available to build and grow businesses. This is done through the fund’s combination of the benefits of the Small Business Administration (SBA) 504 program with NMTCs. It is also made possible as the fund structure allows for investments that are smaller than those associated with typical NMTC investments. The initiative is expected to create 150 jobs.

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U.S. Bancorp Community Development Corporation (USBCDC), the community development subsidiary of U.S. Bank, and the Community Development Finance Alliance, announced Sept. 25 that $4.9 million in equity raised from federal NMTCs will go toward the construction of a new play house for the Utah Shakespeare Festival. Additional financing came from Southern Utah University, which contributed nearly $10.4 million, and Iron County, which provided $2 million in grants. The new play house, Engelstad Theatre, will be 64,000 square feet, with 900 seats, disabled-accessible entrances and a retractable roof. Engelstad Theatre will be part of the Beverley Taylor Sorenson Center for the Arts. The theater will create 33 permanent jobs, 410 seasonal positions and 250 construction jobs. The general contractor is Big-D Construction of Salt Lake City and construction is scheduled to be complete in December 2015. Project cost is expected to total $25.4 million.

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On Oct. 14, Chicago Mayor Rahm Emanuel announced the opening of Shops and Lofts at 47, a mixed-use development in the Bronzeville neighborhood of Chicago. The $46 million property provides 55,000 square feet of ground floor retail and 72 apartments above the retail space, with another 24 units in three newly constructed adjacent buildings. The retail component of development was financed with $3.3 million in NMTC equity. Construction was financed with $8.4 million in LIHTC equity, $13 million in tax increment financing assistance for site preparation costs, a $550,000 HOME loan, a $7.8 million loan from the Chicago Housing Authority, more than $600,000 in tax credit equity generated by donated land and up to $20 million in tax-exempt bonds. Shops and Lofts at 47 is part of Cottage Grove Corridor, a commercial district that was considered the epicenter of the African-American community. The apartment complex is the latest development to open as part of Chicago Neighborhoods Now, an initiative launched by Emanuel to coordinate economic development, housing and quality of life improvements across seven sections of Chicago. Development created 150 construction jobs and will support more than 100 full-time retail jobs.

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