CDFI Fund to Award $7 Billion of NMTC Allocation

The CDFI Fund will award $7 billion of New Markets Tax Credit allocation in the next round to be announced by the end of 2016.  As a result of the 5 year extension of the New Markets Tax Credit the CDFI Fund has elected to combine two $3.5 billion allocation rounds to create a historic $7 billion allocation of New Markets Tax Credit allocation.  The round of awards to be announced by the CDFI Fund later this year will be effected by the December 2015 Certification, Compliance, Monitoring and Evaluation Frequently asked Questions issued by the CDFI Fund last year.  Frequently Asked Question 44 eliminates the commonly used “one day loan” for this and future rounds of New Markets Tax Credit allocation awards.

New York Sets Amendment to Action Plan to Distribute $2.1 Billion of Additional Sandy Federal Recovery Funds

New York’s Office Of Storm Recovery last week released plans for how to divide the second tranche of billions of dollars from the U.S. Department of Housing and Urban Development Sandy relief program. The almost $2.1 billion will be used for housing, community reconstruction and infrastructure improvements. All of the funds will be issued through the HUD Community Development Block Grant program (CDBG) which is administering $16 billion of the total $60 billion allocated by the Federal government to fund Sandy relief efforts. The initial allotment to New York State was approximately $1.7 billion, while New York City received $1.773 billion in a separate allocation.

This new allotment would be distributed as follows: $1.121 billion would be allotted for housing needs, $441 million for community reconstruction, $430 million for infrastructure and the balance for administration and planning. No funds would be distributed for economic development in this allotment.

The housing distributions will be made to the following programs: New York Rising Housing Program ($435 million), Interim Mortgage and Housing Assistance Program ($57 million), New York Rising Buyout Program ($521 million), New York Rising Rental Buildings Recovery Program ($100 million) and Sandy Housing Assistance Relief Program ($7.5 million). The homebuyer buyout program given originally $156 million in the first allotment will see an increase by over 3 times to a total of $521 million in this second allotment. All of the new community reconstruction funds would go to The New York Rising Community Reconstruction Program.

The plan states that Sandy damaged or destroyed over 157,000 housing units including 35,000 in Nassau County and 10,000 in Suffolk County. According to the Governor’s office, these new funds will be used primarily to help make homeowners whole. Hearings will be held on Long Island in February and March. The plan can be found at

Deadline Extended for NYC Build it Back

Richard Dyer a partner in the New York City of Duane Morris reports that the deadline to register for the NYC Build it Back extended to Oct 31st. This program is intended to help Sandy victims repair, rebuild, get reimbursed for expenses incurred or sell their homes. The program is funded from the $645 million from Federal disaster recovery funds approved by Congress. To date there have been over 20,000 registrations to participate in the program. See the City’s press release at

New Jersey Enacts Economic Opportunity Act of 2013

The New Jersey Economic Opportunity Act of 2013 (the “Act”) was signed into law on September 18, 2013. The Act is intended to promote job creation and the redevelopment of urban centers, suburban office parks and areas impacted by Hurricane Sandy by expanding state programs that offer tax incentives. The Act phases out three existing programs and expands two existing programs: the Grow New Jersey Assistance (“Grow NJ”) Program and the Economic Redevelopment and Growth (“ERG”) Program. The Grow NJ Program provides incentives and tax credits for businesses that invest and create jobs in New Jersey. Under the Act the Grow NJ Program provides bonus tax credits for mega projects and projects located in Urban Transit Hubs and the Garden State Growth Zone, and lowers minimum capital investments and job creation requirements for 8 counties including Camden and Atlantic counties. Continue reading “New Jersey Enacts Economic Opportunity Act of 2013”

Duane Morris NYC Hosts Sandy Conference

On September 25th a distinguished panel of speakers which included Jonathan Gouveia of the New York City Economic Development Corporation, Margaret Anadu of the urban investment group of Goldman Sachs, George Olsen of the New York City EB-5 Regional Center, and Andy Rachlin of The Reinvestment Fund made presentation regarding the financial tools available for Sandy-affected areas before a capacity audience at the New York City Offices of Duane Morris. Duane Morris partner and Super Storm Sandy practice Chair Art Momjian and Marie Mascherin of the Community Loan Fund of New Jersey, Inc. moderated a lively discussion of the resources available for development and resiliency in Sandy-affected areas. The panel also provided examples of the funding sources partnering by contributing New Markets Tax Credits, HUD CDBG grants, and EB-5 financing for the development of projects in Sandy-affected areas.

Duane Morris Sandy Conference on September 25th

On September 25th the New York City Office of Duane Morris will host a Super Storm Sandy Conference and Reception in its New York City Office. The focus of the Conference is “From Disaster to Recovery: Financing Tools for Development after Super Storm Sandy”. The panelists are Jonathan Gouveia, Senior Vice-President of the Strategic Investment Group of the New York City Economic Development Corporation, Margaret Anadu, Vice President of the Urban Investment Group of Goldman Sachs, George L. Olsen, Managing Principal of the New York City EB-5 Regional Center, and Andrew Rachlin, Vice President and Market Leader of The Reinvestment Fund. The speakers on the panel will discuss the distribution of $4 billion of HUD CDBG monies by the New York City Economic Development Corporation, the allocation by the Treasury of $8.5 billion of New Markets Tax Credit allocation next Spring, and the availability of the Federal EB-5 program for the development of Sandy related projects. The Conference will be from 5 pm to 6 pm followed by a cocktail reception from 6:00 pm to 7:30. For further information and to register contact Art Momjian at

NYC Economic Development Corp. to award Sandy CDBG Grants

Duane Morris New York City partner Richard Dyer reports that the New York City economic Development Corp. is requesting proposals from qualified firms or individuals to establish programs to “catalyze significant long-term economic growth” in five areas impacted by Hurricane Sandy. See here.

The RFP process is described by the EDC as:

Continue reading “NYC Economic Development Corp. to award Sandy CDBG Grants”

Hurricane Sandy Recovery Bonds

As previously reported, Rep. Bill Pascrell (D-NJ-09) led a bipartisan push for introduction of the Hurricane Sandy Tax Relief Act of 2013 (H.R. 2137). This bipartisan bill included a total of 28 co-sponsors. In addition to the tax credit allocations detailed earlier, the legislation also authorizes creation of Hurricane Sandy Recovery Bonds for the impacted area. Hurricane Sandy Recovery Bonds will be a new state-by-state private activity bond allocation, including $9.2 billion for New York, $9.2 billion for New Jersey and $3.2 billion for Connecticut. The bond allocation will provide financing for the rebuilding of certain housing and critical infrastructure including: water and sewage systems, docks and wharfs, commuter facilities and energy production facilities. The bill has been referred to the House Committee on Ways and Means for review.

Michael Pehur is Development Finance Consulting Director at Duane Morris Government Strategies (DMGS), a consulting firm created from the former entities Duane Morris Government Affairs (DMGA) and GSP Consulting. DMGS supports the growth of organizations, companies, communities, and economies through a suite of innovative government and business consulting services.

A New Look at the 4% Federal Low-Income Housing Tax Credit

During the past several years as a result of reduced federal and state subsidies, the 4% Federal low-income housing tax credit has been an infrequently used Federal subsidy. However, with the competitiveness and unclear future of the Federal New Markets Tax Credit Program and the conservative underwriting of conventional debt, the 4% Federal low-income housing tax credit may have a new role for a wide range of projects. The advantages of the 4% Federal low-income housing tax credit are that it is virtually automatically available for residential rental projects with at least 20% of the units set aside for low to moderate income tenants and whose project costs are at least 50% financed with volume cap tax-exempt bonds. Accordingly market rate projects with a desire or requirement to set aside affordable units can both access tax-exempt financing and generate additional equity through the use of the 4% Federal low-income housing tax credit. In addition, the amount of the tax credit is only limited by eligible costs and may be increased if the project is located in a qualified census tract or difficult to develop area. Further in certain instances a percentage of the cost basis of community service facilities may be included in eligible basis and generate additional equity. In any apartment or mixed use development consideration should be given to the potential equity to be generated by the 4% Federal low-income housing tax credit.

Private Equity Roll Ups for Small Scale Renewable Energy Projects

Renewable Energy projects can be viewed as falling into one of three categories. A large and growing industry is the residential solar project market. This market consists of large operators which through their dealer networks have developed a very popular and profitable model for homeowner installation. A well-established market is the utility-scale projects. This market benefits from the demand from traditional owners of energy plants, infrastructure funds and private-equity funding. The third category is the small scale commercial market. While the economics of the small scale market are strong, the market suffers from the inability of sponsors to access the debt and tax credit markets for small commercial projects. In addition, the complexity of renewable energy projects generates substantial transactional costs which are more difficult to be absorbed by smaller commercial projects. Attorneys in the interdisciplinary renewable energy group at Duane Morris are working with middle-market renewable energy sponsors to aggregate small scale renewable energy projects to a critical mass. These projects will then be rolled up to a private equity fund which has access to capital at very favorable interest rates. In addition, the aggregation of the projects generates a larger renewable energy investment tax credit which is more attractive to tax credit investors.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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