CDFA // BNY MELLON DE DEVELOPMENT FIN FINANCE WEBCAST SERIES Capital for Main Street The Broadcast will Begin at 1:00pm Eastern Submit your questions in advance using the GoToWebinar control panel View previous webcast recordings online at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM
Hello! Welcome to the webcast. Pearl-Jean Mabe Director, Research and Technical Assistance Council of Development Finance Agencies Columbus, OH Are you a CDFA Member? Members receive exclusive access to thousands of resources in the CDFA Online Resource Database. Create your unique login today at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM
Legal Disclaimer CDFA is not herein engaged in rendering legal, accounting, financial or other advisory services, nor does CDFA intend that the material included herein be relied upon to the exclusion of outside counsel or a municipal advisor. This publication, report or presentation is intended to provide accurate and authoritative general information and does not constitute advising on any municipal security or municipal financial product. CDFA is not a registered municipal advisor and does not provide advice, guidance or recommendations on the issuance of municipal securities or municipal financial products. Those seeking to conduct complex financial transitions using the best practices mentioned in this publication, report or presentation are encouraged to seek the advice of a skilled legal, financial and/or registered municipal advisor. Questions concerning this publication, report or presentation should be directed to info@cdfa.net. WWW.CDFA.NET / / WWW.BNYMELLON.COM
Join the Conversation Listen through the telephone for best audio quality. Submit your questions to the panelists here. WWW.CDFA.NET / / WWW.BNYMELLON.COM
Capital for Main Street Panelists St Stuart Wei eiss ss, Mod oderator Vice President, Business Development, The Bank of New York Mellon Suzanne Per Suz erreault Han annah Whi hite Small Business Program Manager, Director of Outreach and Engagement, Community Development Unit, The National Main Street Center Michigan Economic Development Corporation Laura Burns Lau Community Impact Compliance CDFA Training Institute Lauren Mau Lau auldin Manager, Director of Neighborhood Revitalization, National Trust Community Investment 16 courses in development finance Historic Macon Corporation designed for all skill levels. Learn more and register today at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM
Capital for Main Street Stuart Weiss Vice President, Business Development The Bank of New York Mellon Los Angeles, CA Are you a CDFA Member? Members receive exclusive access to thousands of resources in the CDFA Online Resource Database. Create your unique login today at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM
Capital for Main Street Hannah White Director of Outreach and Engagement, The National Main Street Center Chicago, IL CDFA Training Institute 16 courses in development finance designed for all skill levels. Learn more and register today at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM
MAIN STREET AMERICA + Main Street America is a program of the National Main Street Center. It is a national movement of 1,000+ local affiliate organizations and 45 State, City, County-level Main Street Coordinating Programs. + For 40 years, the Main Street program has been a leader in preservation-based economic development, supporting thousands of communities across the country bring new economic activity and enhance quality of life in their downtowns.
MAIN STREETS ACROSS THE MAP
MAIN STREETS ARE MORE IMPORTANT THAN EVER
ENGAGEMENT AND LEADERSHIP
PUBLIC SPACE
SMALL BUSINESS ECONOMY
COMMON CHALLENGES Main Street redevelopment faces a number of fundamental challenges – Aging infrastructure and historic buildings – Small lenders, which traditionally serve entrepreneurs and small businesses, have been disproportionately affected by new compliance measures – Consolidation of community banks – Local Capacity – Main Streets’ scale itself poses a challenges – the size of the deal is often too small to be considered worth the risk
Capital for Main Street Laura Burns Community Impact Compliance Manager, The National Trust Community Investment Corporation Washington D.C. CDFA Training Institute 16 courses in development finance designed for all skill levels. Learn more and register today at www.cdfa.net WWW.CDFA.NET / / WWW.BNYMELLON.COM
Using Tax Credits in Your Main Street LAURA BURNS | COMMUNITY IMPACT COMPLIANCE MANAGER
Who is NTCIC? • NTCIC finances sustainable economic development in communities nationwide by providing tax credit syndication , technical assistance & advocacy for the preservation of historic properties, especially in low- income communities , and the production of renewable energy • Formed in 2000 to take advantage of the newly created New Markets Tax Credit Program • Qualified Community Development Entity ( CDE ) • Tax Credit Syndicator – Connect private investor capital with developers rehabilitating historic buildings NTCIC 2
NTCIC’s Tax Credit Role • As a Tax Credit Syndicator • Provides guidance to developers and individuals seeking tax credits for historic rehabilitation • Evaluates specifics of development projects and identifies additional sources of capital available • Connects individuals to investors actively seeking historic projects to support and finance • Supports projects through their ongoing compliance periods from financial closing to exit NTCIC 3
NTCIC’s Tax Credit Role • As a Community Development Entity • Seek projects in underserved communities looking for both New Markets Tax Credits and Historic Tax Credits • Guide projects through the allocation process • Offer products that directly support smaller-scale real estate development projects located in Main Street Communities • The Irvin Henderson Main Street Revitalization Fund is actively seeking projects to support NTCIC 4
The Irvin Henderson Main Street Revitalization Fund NTCIC offers low-cost tax credit financing to historic properties in Main Street communities. NTCIC’s Main Street Revitalization Fund provides up to $2 million in NMTC allocation per project. NTCIC 5
How it Helps • Targets historic preservation efforts in Main Street communities • Historic Tax Credits are combined and enhanced with New Markets Tax Credits to provide additional equity into a project • Financing partnerships with legal and accounting experts cap transaction fees • Offers above market pricing and more attractive rates than traditional real estate financing • Provides vital gap financing for projects that have $4MM - $8MM in QREs NTCIC 6
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Community Benefits • How do community benefits factor in to tax credit utilization? – Overall impacts are very important • Examples: – Jobs • Quantity • Quality – Low-Income Individuals served – Community input – Annual Participants – Required reporting over full 7-year compliance period NTCIC 8
Case Study: The Owosso Armory NTCIC 9
The Owosso Armory NTCIC 10
The Owosso Armory • The Owosso Michigan National Guard Armory was constructed in 1915. • During World War I, Company M deployed from the Armory for France. – These soldiers took part in the Battle of Argonne-Seuse and were among the first American troops to set foot on German soil during the war. • By mid-century the Armory was home to the 144th National Guard unit. • Armory served as a community space by hosting debates, prize fights, weddings and artists • In 2007 the 144th left the nearly century-old building for a modern facility and the Armory remained vacant until it’s redevelopment in been vacant until its restoration in 2017 NTCIC 11
Revitalization Efforts • Led by the local community and designed to catalyze economic development • Project sponsored by Shiawassee Chamber of Commerce whose mission is to stimulate economic development in Owosso and Shiawassee County • Project goal was to create and spin out new businesses into the community by creating small business support and office space • Initial starts in 2013 – Worked with a developer and created an early cost model • Encountered early predevelopment challenges – Reached out to several lenders – Financing gap existed even with historic tax credits NTCIC 12
The Owosso Main Street • Member of Main Streets America Program • Main Street Coordinators act as a connector at the local level to support community transformation efforts • Main Street connected Owosso Armory preservation efforts to NTCIC and the Main Street Revitalization Fund NTCIC 13
The Closing Process • All sources of funding are identified and secured • Lenders, CDEs, investors, and project sponsors engage their individual counsels as well as tax credit accountants to begin negotiating terms and determining how the funds will flow • Project sponsors are simultaneously working with the construction and development teams to finalize plans NTCIC 14
Revitalization Efforts NTCIC 15
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