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Twinning Historic Tax Credits and New Markets Tax Credits

Twinning Historic Tax Credits and New Markets Tax Credits. Charlie Werhane Vice Chairman/COO Enterprise Community Investment, Inc. November 8, 2007. Enterprise NMTC Portfolio Overview. $515 million in allocations 26 NMTC investments closed 12 projects include the twinning of HTC and NMTC:

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Twinning Historic Tax Credits and New Markets Tax Credits

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  1. Twinning Historic Tax Credits and New Markets Tax Credits Charlie Werhane Vice Chairman/COO Enterprise Community Investment, Inc. November 8, 2007

  2. Enterprise NMTC Portfolio Overview • $515 million in allocations • 26 NMTC investments closed • 12 projects include the twinning of HTC and NMTC: • Broad product mix

  3. Enterprise Portfolio Closed HTC/NMTC Transactions 47% HTC/NMTC 53% Non HTC/NMTC 340 mm

  4. Project Impact Examples • Old Post Office – St. Louis, MO • Fashion Square – St. Louis, MO • Drury Hotel – San Antonio, TX • Oak Street School – Buffalo, NY • Court Square Center – Memphis, TN

  5. Court Square Center

  6. Court Square Center

  7. Sources and Uses: ($ in millions) Sources:Uses: • A Loan (Perm. Loan) $8 Site Acquisition $1 • B Loan (Sec. 108 Loan) $8.5 Hard Costs $31.7 • C Loan (BEDI Loan) $2 Soft Costs $6.8 • D Loan $.2 Other $11.5 • HTC Equity $6.3 • NMTC Equity $11.3 • Insurance proceeds $9.1 • Other $5.6 Total: $51 Total: $51

  8. NMTC Equity generated by twinning HTCs and NMTCs • Total Federal HTC Equity (based off of QREs) is $6.3MM * • Total Loans and Equity infused into project generating NMTC: • A Loan (Perm. Loan) $8MM • B Loan (Sec. 108 Loan) $8.5MM • C Loan (BEDI Loan) $2MM • D Loan $.2MM • Federal HTC Equity $6.3MM * • NMTC Equity boost to project on HTC approx. $2MM

  9. Complexity

  10. ESIC has implemented the organizational structure to allow investors to take full advantage of the New Markets Tax Credit.

  11. Example of a Master Lease Structure - 1 Investment Fund HTCs, NMTC, Distributions $ QEI Enterprise CDE Enterprise Allocatee Allocation Debt Service HTCs $ QLICI Loans $ QLICI Equity Subtenants Master Tenant Landlord $ Equity HTCs Equity/Property Developer

  12. Example of a Master Lease Structure - 2

  13. THANK YOU

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