‘Free money’ for CoolTown projects
Say you want to develop a $10 million Cool
Town development - transforming a number of historic buildings into contemporary loft offices, residences and indie (independent) businesses. Say you have only $6 million.
It can be done without giving up any equity. The federal government already has two programs in place to provide that other $4 million, and they are:
Historic Tax Credits: Provides up to 20% of the rehabilitation costs (essentially all the development costs in renovating an historic building) through tax credits, with no limit on total costs.
New Market Tax Credits: Provides up to 39% of the investment through tax credits over seven years for projects in designated low-income communities, often where many historic buildings (and the best urban fabric) are located.
Kennedy Smith of the Clue Group wrote a concise description that combines these two tax credits, called twinning. It happens to be targeted toward historic theaters, but the principles are there. You can download it here.
Know of any projects that have benefited from these tax credits? Speak your mind below.
There are many examples of creative usages of New Markets Tax Credits across the nation.
As the founder of NMTCeXchange (a national NMTC consultancy), I can say that the transaction structure is not necessarily that simple, however. For news and up to date information on the New Markets Tax Credit Program, please visit: http://www.nmtcexchange.com or http://www.newmarkettaxcredits.blogspot.com/
- NaShawndra Jackson-Davis
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