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Novogradac Journal of Tax Credits Volume 8 Issue 4
The April 2017 issue of the Novogradac Journal of Tax Credits.
Three development entities came together with a vision to revitalize New York City’s Lower East Side. That vision is a nine-site development known as Essex Crossing, which includes 1.9 million square feet of housing, retail, community service space and much more.
Summit County in northeastern Ohio has found a new home in one of its oldest buildings. In its heyday, the historic Firestone shipping and warehouse facility, or “Triangle Building,” in Akron serviced one of the largest tire manufacturers in the world. Philadelphia-based private real estate and development company Amerimar Realty Company renovated and repurposed the Triangle Building with the help of federal and state historic tax credits (HTCs), making the historic building a one-stop shop for Summit County services.
Question: How does the CDFI Fund monitor compliance with the unrelated-entity requirement of Section 3.2(d) of the allocation agreement?
Answers: Allocatees that indicate they will make qualified low-income community investments (QLICIs) in qualified active low-income community businesses (QALICBs) that are unrelated to the allocatee will be eligible for five bonus points in the application process.
For more than a decade, Connecticut has had a state historic tax credit (HTC) administered by the Connecticut Office of Culture and Tourism (CCT). The program began in 2006 as the Connecticut Historic Structures Rehabilitation Tax Credit program and was for residential conversions to incentivize housing, especially affordable housing. At that time, the program returned 25 percent of eligible costs up to $2.7 million per project, with an annual program cap of $15 million.
Developers of low-income housing tax credit (LIHTC) properties face the potential of “not in my backyard” (NIMBY) opposition. Any public hearing, whether it is for land use or zoning changes, variances or funding requests, can be subject to protest. These conflicts between neighborhoods and new developments are more likely in higher-income communities with active neighborhood associations, but can happen anywhere. The opposition can be organized and well-funded or just a minor diversion, but developers need to be prepared and have strategies in place to deal with the issues.
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Reps. Pat Tiberi, R-Ohio, Tom Reed, R-N.Y., and Richard Neal, D-Mass., introduced legislation Feb. 15 that would make the federal new markets tax credit (NMTC) permanent, while Sens. Roy Blunt, R-Mo., and Ben Cardin, D-Md., introduced similar legislation in the Senate. The bills call for the NMTC to be a permanent part of the tax code with an inflation adjustment in future years and an alternative minimum tax (ATM) relief for investors. If passed, the inflation adjustment would raise the NMTC allocation for 2017 from $3.5 billion to $4.94 billion. The House bill had 27 cosponsors at press time and was assigned to the Ways and Means Committee, while the Senate bill had an additional cosponsor and was assigned to the Finance Committee. Both bills are posted at www.newmarketscredits.com.
Reps. Tom Reed, R-N.Y., and Mike Thompson, D-Calif., introduced legislation Feb. 15 that would extend commercial and residential installation tax credits for small wind and other renewable technology through 2021. Those “orphan” technologies were left out of the extensions included in the PATH Act of 2015 and expired at the end of 2016. HR 1090 would provide a retroactive credit of 30 percent that would phase out through the end of 2021. The legislation had 35 cosponsors at press time–22 Republicans and 13 Democrats.
Six senators and 18 members of the House of Representatives Feb. 16 introduced the Historic Tax Credit Improvement Act of 2017. The bill would increase the historic tax credit (HTC) for certain small projects, allow credit transfer for certain small projects, lower the expenditure threshold from 100 percent to 50 percent of the adjusted basis to qualify for the HTC, reduce the depreciable basis adjustment for HTC property and modify certain tax-exempt property rules. S. 425 was referred to the Finance Committee, while H.R. 1158, which had seven additional cosponsors at press time, was referred to the Ways and Means Committee. Both bills are posted at www.historictaxcredits.com.
The U.S. Senate confirmed Ben Carson as the Secretary of the Department of Housing and Urban Development (HUD) March 2 and he was sworn in later that day by Vice President Mike Pence. Carson, a retired neurosurgeon, was approved by a vote of 58-41. He will oversee a department that has approximately 8,000 employees and an annual budget for 2017 of nearly $49 billion for various programs including rental assistance and investments to combat urban poverty. Among Carson’s first actions was a “listening tour” of select communities and HUD offices around the nation.
The Wisconsin Housing and Economic Development Authority (WHEDA) released Feb. 10 a list of the 10 percent test due dates for all 2016 low-income housing tax credit (LIHTC) awardees. The list contains 30 awardees with deadlines this year ranging from Aug. 20 to Nov. 16. The complete list is available at www.wheda.com.