New Markets Tax Credit

The New Markets Tax Credit (NMTC) program has sparked billions of dollars of investment, transforming low-income communities and achieving the business objectives of owners, developers and sponsors. BakerHostetler attorneys regularly advise NMTC participants, particularly Qualified Active Low-Income Community Businesses (QALICBs), in NMTC transactions. QALICBs partnering with us gain a competitive edge in NMTC deals, especially as demand for NMTC allocations far outweighs supply.

Clients benefit from our nationwide experience, multidisciplinary approach and creativity in planning and structuring challenging and complex NMTC-financing arrangements. Our professionals have both the technical tax knowledge needed to ensure compliance with the detailed federal NMTC regime, as well as the creativity needed to formulate different financing structures to meet clients’ individualized needs. Many of our NMTC engagements involve other types of tax credits (e.g., historic tax credits), multiple tax credit investors, tiers of entities with multiple layers of debt and equity and the involvement of tax-exempt entities. The result is a competitive edge in all areas that impact an NMTC project, which include tax, corporate, finance and real estate, among other areas.

Select Experience

  • Represented NMTC leverage lender group in connection with the development of a $25 million Ace Hotel to be located in East Liberty, PA. The project was financed with federal NMTCs and federal HTCs.
  • Represented joint venture between a Brazilian company and a U.S. private equity firm in connection with a $42 million federal and a $10 million Mississippi state NMTC financing to develop a $200 million silicon metal production facility in Mississippi; the project received senior financing from a German financial institution and incentives from the state and local government.
  • Represented developer in connection with a $30 million acquisition, construction and development of a 153-room Marriott Hotel located in the University Circle area of Cleveland, Ohio. The project was financed with federal and state NMTCs and required leveraging of multiple layers of conventional debt, HUD 108 financing and “tax increment” financing.
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Experience

  • Represented NMTC leverage lender group in connection with the development of a $25 million Ace Hotel to be located in East Liberty, PA. The project was financed with federal NMTCs and federal HTCs.
  • Represented joint venture between a Brazilian company and a U.S. private equity firm in connection with a $42 million federal and a $10 million Mississippi state NMTC financing to develop a $200 million silicon metal production facility in Mississippi; the project received senior financing from a German financial institution and incentives from the state and local government.
  • Represented developer in connection with a $30 million acquisition, construction and development of a 153-room Marriott Hotel located in the University Circle area of Cleveland, Ohio. The project was financed with federal and state NMTCs and required leveraging of multiple layers of conventional debt, HUD 108 financing and “tax increment” financing.
  • Represented a Cleveland, Ohio, non-profit performing arts center in the $40 million acquisition and rehabilitation of a historic five-story office building to be utilized by multiple tenants, including several non-profit organizations; the project was financed with the assistance of both federal and state new markets tax credit equity as well as federal and state historic tax credit equity. Multiple CDEs participating in the NMTC financing and bond financing proceeds were used to leverage the credits.

Recognition

  • BTI Client Service 30: BakerHostetler advanced 19 positions to #9 (2016)

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