Art Momjian of the Philadelphia Office, Chris Winter of the Wilmington Office, and Marc Kushner of the New York office represented Zagis USA, LLC in the closing of a Federal New Markets Tax Credit facility for the expansion of a cotton spinning facility in Louisiana. The expansion of the existing cotton spinning facility created additional employment in a non-metropolitant area of Louisiana. The financing qualified under the Federal New Markets Tax Credit targeted population regulations and was structured by Advantage Capital Partners.
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.
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 firstname.lastname@example.org.
The New York City Office of Duane Morris will host a Super Storm Sandy Conference and Reception on September 25th. 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 a wide range of financing tools available for development in the aftermath of Super Storm Sandy which include Sandy HUD CDBG grants, Federal New Markets Tax Credits, equity, debt, and EB-5 financing. 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 email@example.com
The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) released the Notice of Allocation Availability (NOAA), which officially opens the next round of competition under the New Markets Tax Credit Program (NMTC Program). The NOAA combines the calendar year (CY) 2013 and CY 2014 rounds, making $8.5 billion ($3.5 billion authorized by Congress for CY 2013 and $5 billion requested in the President’s 2014 Budget) in tax credit authority available, pending Congressional authorization.
The CDFI Fund seeks to combine the CY 2013 and CY 2014 rounds in order to achieve cost and efficiency savings to the government in addition to realigning the program calendar. The combined round would also prevent an anticipated deficit of available NMTCs and would allow the CDFI Fund to make additional allocation awards.
At this time, the CDFI Fund anticipates opening the CY 2015 round of the NMTC Program in the summer of 2014 with award decisions in the spring of 2015.
U.S. Rep. Bill Pascrell, Jr. (D-NJ-09) lead a bipartisan coalition including Reps. Joseph Crowley (D-NY), Rodney Frelinghuysen (R-NJ), Michael Grimm (R-NY), John Larson (D-CT), Frank LoBiondo (R-NJ), Charles Rangel (D-NY), Tom Reed (R-NY) and Carolyn McCarthy (D-NY) in introducing legislation to provide tax relief to the victims of the devastating storm that caused widespread destruction throughout the Northeast. The Hurricane Sandy Tax Relief Act of 2013 is aimed at providing tax relief for victims of Hurricane Sandy in areas designated as Federal Disaster Areas by the President. The bipartisan coalition will propose supplemental new market tax credit allocation authority for community development entities serving Hurricane Sandy disaster areas and increased low-incme housing tax credit allocation authority for delcared disaster areas.
The form of 2012 New Markets Tax Credit Allocation Agreement has been released by the Community Development Financial Institutions (CDFI) Fund. Notably the form allocation agreement has two significant changes. First, the Allocation Agreement provides the following definition of a Real Estate Qualified Active Low-Income Community Business: “shall mean any QALICB whose predominant business activity (i.e. activity that generates more than 50 percent of the business’ gross income) includes the development (including construction of new facilities and rehabilitation/enhancement of existing facilities), management, or leasing of real estate.” In addition, the form of 2012 Allocation Agreement has the following disclosure requirement. “Disclosure to QALICBs. Each time the Allocatee makes one or more QLICs in the form of a loan(s) to, or investment(s) in, a QALICB, it shall disclose to the QALICB, in a separate stand-alone document, any and all direct and indirect NMTC related transaction costs related to the QLICI(s) (e.g. legal, accounting, compliance), fees and compensation that the Allocatee is assessing the QALICB or otherwise requiring the QALICB to incur prior to, during, and at the conclusion of the seven-year NMTC term.”
Today the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced $3.5 billion in New Markets Tax Credit (NMTC) awards nationwide. The Treasury has awarded 85 certified community development entities with tax credit allocation authority under the tenth award round of the NMTC Program. A list of the certified community development entities which were awarded New Markets Tax Credit allocation can be found at http://www.cdfifund.gov/docs/2012/nmtc/2012%20NMTC%20Award%20Book.pdf
A prominent mandate of the New Jersey, New York City, and New York State action plans is the leveraging of Sandy CDBG grants with other federal programs and private funds. In this vein, there are several programs which are available to leverage Sandy CDBG funds. Coupling the Sandy funds with the Federal New Markets Tax Credit Program was done Post Katrina and will generate approximately 25% of project costs through Federal Tax Credit equity generated on the remaining 75% of Sandy funds which flow through the New Markets Tax Credit Structure. Under the proposed New Jersey Action plan approximately $100,000,000 is slated to go the New Jersey Housing and Mortgage Finance Agency to be used as a grant similar to TCAP to leverage the Agency’s 9% low income housing tax credit allocation as well as make 4% low income housing tax credit transactions economically feasible. In a similar vein, investment funds are forming with the plan of using private capital to leverage Sandy CDBG funds for projects. These transactions should be attractive to funds because the leverage would be relataively low and the security and financial return on the investment very good. Applicants seeking Sandy CDBG funds should be prepared to demonstrate the leveraging of these funds with public programs and private investment.
The CDFI Fund announced today its plans to award $3.5 billion of Federal New Markets Tax Credit authority for the 2012 round in April of 2013. Earlier in the day President Obama signed the American Taxpayer Relief Act of 2012 which included an extension of the Federal New Markets Tax Credit Program for 2012 and 2013. The New Markets Tax Credit authority is $3.5 billion for each year. In addition the current Senate version of the Hurricane Sandy and National Relief Act of 2012 provides for $500,000,000 of additional annual New Markets Tax Credit authority for National Disaster areas, including areas affected by Hurricane Sandy.