Community Development & Tax Credit Finance

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Investing in tax-credit incentivized projects allows investors to benefit financially, comply with specific regulations (e.g., the Community Reinvestment Act), and make positive changes and create new opportunities in disadvantaged neighborhoods, overhaul blighted areas, rehabilitate historic structures, and provide affordable housing options. Financial institutions, insurance companies, and specialized investors rely on Dickinson Wright when securing and investing in tax-credit advantaged investments, including projects where multiple tax credit investments (so-called twin deals) occur. We likewise have the unique experience of representing clients in sales or acquisitions of portfolios of tax credit-incentivized properties. Post-closing, we support our clients in their asset management needs as well as exits and dispositions. In addition, Dickinson Wright has a nationally recognized public finance team with extensive experience in economic and community development projects.

A Skilled Team Who Can Help Navigate Through Complex Projects

Dickinson Wright’s Tax Credit Finance and Community Development team provides the skilled knowledge and experience necessary to successfully navigate the tax credit incentive arena and provides clients with access to the firm’s full array of business services. Our practical and pragmatic approach has successfully navigated through frequently complex projects for investors, syndicators, lenders, state and local governments and agencies, and developers, all while recognizing the discrete goals and concerns of each type of client. Our team’s broad experience allows us to craft innovative solutions in a complex field prone to pitfalls.

We can provide assistance through all phases of a tax credit or community development transaction, including:

  1. Structuring the transaction, which frequently includes more than one tax credit;
  2. Negotiating and documenting the transaction;
  3. Closing the equity investment(s) and loans into the transaction;
  4. Providing post-closing asset management and related legal advice; and
  5. Negotiating and documenting the terms of the transaction exit while protecting and advising the client of its interests post-exit.

Our tax credit and community development lawyers regularly speak and participate at national and regional tax credit conferences and panels. Team members have also served as outside counsel to state financing authorities, are board members of development sponsors, and are Certified Public Accountants (CPAs) or have a Master of Laws (LL.M) in taxation.

Historic Tax Credits (HTCs) / Rehabilitation Tax Credit

Our lawyers can navigate through the rigors of negotiating and closing rehabilitation tax credit-incentivized financings from a multitude of perspectives. Our experience includes ongoing compliance matters and resolving tax controversies with the Internal Revenue Service as well as exits.

New Markets Tax Credits (NMTCs)

Our experience in New Markets Tax Credits (NMTCs) is comprehensive. We represent leverage lenders, investors, community development entities (CDEs) and their sub-CDEs, developers, and construction lenders. We also have experience closing complex NMTC exits, including those requiring refinancing. We have successfully obtained favorable cost-saving and tax mitigation measures for our clients.

Low-Income Housing Tax Credits (LIHTCs)

We help investors and syndicators deploy capital nationwide into housing and community development projects that are eligible for low-income housing tax credits (LIHTCs), including representation of upper-tier investment structures. We also represent developers in their LIHTC representation needs. Our experience at the project level ranges from scattered-site developments in Ohio to high-rise multiuse developments using multiple layers of private and public debt in the urban core of Chicago.

We also represent issuers in connection with the issuance of tax-exempt bonds for qualified residential rental projects, which are issued in connection with 4% LIHTC financing. We are uniquely positioned to navigate the complex tax-exempt private activity bond rules that apply to qualified residential rental projects, as well as the often overlapping LIHTC tax rules.

State and Local Tax Credits, Development Incentives, and Bond Financing

State and local tax credits, whether they are HTCs, NMTCs, LIHTCs, and other state and local incentives, often parallel federal tax credit programs, but often have specific nuances. We help our clients leverage the availability of these credits to maximize available capital or assist them in securing an attractive investment opportunity.

We also have broad experience navigating other available state and local development incentives in the markets we serve, including property tax abatements, tax increment financing (TIFs), brownfield redevelopment incentives, and other jobs creation-based tax incentive programs.

Our public finance attorneys serve as bond counsel, lender’s counsel, and developer counsel in connection with the issuance of private activity bonds and municipal securities to finance eligible economic development projects and other public-private partnership transactions.

Representative Experience

  • National Bank re LIHTC and Syndicated Funding: Representing a national bank in the creation and population of a syndicated fund comprised of several multiple low-income housing tax credit (LIHTC) investments and warehouse lending to bridge equity installments.
  • National Insurance Company re LIHTC: Representing a national insurance company with the creation and population of a proprietary fund comprised of multiple low income housing tax credit investments.
  • National Bank re Syndicated LITHC Fund: Representing a national bank in the creation and population of a multi-investor syndicated fund comprised of multiple low income housing tax credit investments.
  • Community Nonprofit and QALICB Finances New Headquarters: Advised a nonprofit foundation and qualified active low-income community business (QALICB) entity in the financing of a new headquarters to house its administrative offices as well as facilities to directly advance its charitable purpose. The project utilized multiple New Markets Tax Credit (NMTC) allocations, and the project economics relied on, in part, future pledges of charitable giving from community partners.
  • Regional Bank Provides Construction Loan for Historic Hotel Renovation: Advised a bank on a significant construction loan for the rehabilitation of an historic hotel, which project’s capital stack included tax increment financing (TIF), historic tax credits (HTCs), other economic incentives, and a master lease/master sublease structure.
  • Developer Renovates Multiple Historic Buildings with Various Incentives: Represented developer with the financing of multiple historic buildings financed by state and federal HTCs, traditional construction financing, and state economic development loan funds.
  • Community Development and Tax Credit Finance Subsidiaries Receive Asset Management Advice: Representing community development and tax credit finance subsidiaries of insurance companies and national banks in all asset management needs, including project refinancing, LIHTC, NMTC, and HTC exits, as well as resolution of disputes or advice on significant project modifications after the project has been placed in service.
  • Formation of Opportunity Zone Fund for Regional Real Estate Developer: Formed of Opportunity Zone Fund to facilitate investments in various projects located within designated opportunity zones.
  • Community Medical Nonprofit Builds Headquarters and Facility: Advised on complex multi-tax credit transaction with multiple layers of financing for the creation of a nonprofit headquarters and community health facility with a principal finance component consisting of NMTCs (Qualified Low-Income Community Investment (QLICI) loans).
  • Regional Developer Completes NMTC Transaction Involving the LIIF: Advised a regional developer on a complex NMTC transaction, in which the Low Income Investment Fund (LIIF) both made a bridge loan secured by capital campaign pledges and provided NMTC allocation to finance the construction of a new facility to operate as a federally qualified health center in Tacoma, Washington.
  • National Syndicator-LIHTC Investor Finances Chicago Mixed-Use Housing Property: Advised a national syndicator-LIHTC investor with the financing of a mixed-use housing property in Chicago, Illinois that included several layers of debt financing for multiple city blocks and easements for the use of an active subway route.
  • National Bank Receives LIHTC, Fund Syndication Advice: Advised a national bank on guaranteed low income housing tax credit investment fund investments and fund syndication.
  • National Bank LIHTC and NMTC Investments for Developments in New York CityRepresented a national bank with a twin LIHTC and NMTC investment in portions of a large residential and commercial condominium development in Brooklyn, New York.
  • State Housing Authority Invests in 47 LIHTC Projects: Acted as bond and tax counsel on the issuance of tax-exempt bonds that financed qualified resident projects and were twinned with 47 LIHTC projects.
  • State Development Agency Develops Subordinated Loan Program: Counseled agency on loan program used to provide frequently-subordinated loans to projects where environmental remediation is a requirement for redevelopment. The loans are often utilized with one or more tax credit programs and other economic incentives.
  • State Housing Authority Receives Tax Compliance Advice: Advised state housing agencies about on-going tax compliance matters, including project scope, spending requirements, project eligibility, and scattered site restrictions.
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