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Crescent Growth Capital, LLC

Crescent Growth Capital, LLC

Structuring project financing to incorporate tax credit equity.

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Education

Family Service Association – The Neighborhood Place

December 15, 2016 by

Family Service is a nationally accredited, private, non-profit, non-sectarian agency funded by the United Way, and operating under fee-for-service contracts with a number of San Antonio’s largest outreach programs, including the Assistance League of San Antonio, the Alliance for Children and Families, and the Methodist Healthcare Ministries.

Family Service provides high quality services on more than 60 school campuses, in 8 agency offices, and within client homes.  For the past 110 years, Family Service has been characterized by four traits that drive all agency programs and services: (1) an abiding dedication to families; (2) innovative research-based approaches; (3) responsible fiscal management; and (4) collaboration with community stakeholders.

Family Service has been a leader in San Antonio’s impoverished communities for decades, providing a full continuum of life supporting services including behavioral health counseling, crisis counseling, youth development, school & community engagement programming, workforce and financial empowerment, child care resource and referral, and Head Start early childhood education.

Family Service has been recognized by both Federal and State organizations as a leader in the implementation of evidence-based models, including, but not limited to the SAMHSA Science to Service Award, Best Practices Award Winner as well as serving as a research host site for multiple national level evidence-based curricula, including Multi-Dimensional Family Therapy, ACC/ACRA, Families and Schools Together, Parents as Teachers, Nurturing and Strengthening Families.  Family Service is one of only ten nationally accredited child care resources/referral service centers and the only one in the state of Texas.

Located in the former H.K. Williams Elementary School, the repurposed Neighborhood Place is a collaborative community concept providing a comprehensive array of more than 40 programs and services designed to address troublesome community needs and improve outcomes for children and families.

The facility also represents a new and unique model for revitalizing an impoverished urban community, by focusing on services that strengthen families.  The multi-tiered collaboration at the Neighborhood Place leverages resident leadership and public-private partnerships to deliver program services that help families work, earn, and save their way toward self-sufficiency.  This model places a specific emphasis on improving the overall health of children within the family, through programs aimed at stemming child abuse, providing healthy food alternatives, and helping families better prepare children to succeed in school.

In 2014, more than 60 organizations utilized The Neighborhood Place to provide a diverse array of services to the community, including the City of San Antonio, VITA tax preparation services, H.E.B., Texas Veterans Commission, Twogether in Texas, Texas A&M, UT San Antonio, Positive Choices, Odyssey, Antioch Baptist Church, Bexar Area Agency on Aging, UT Health Science Center,  Project MELD, Boystown, Immaculate Conception, Girls Inc., KLRN, Texas Council on Family, Superior Health, Holy Cross, Ballet Folklorico, AVANCE, Hispanas Unidas, Girls Scouts, Head Start, Alliance for Veterans, etc.

The majority of the people who visit The Neighborhood Place each year come from the surrounding neighborhoods, which are predominately Latino, and are extremely impoverished: 32% of all residents, and nearly 44% of households with children, live below the federal poverty line.  Among adults in the targeted zip codes, fully 47% do not have a high school education.

Despite all the programs and services Family Service Association provides out of The Neighborhood Place, the facility was in drastic need of repairs, including an upgraded HVAC system, asbestos remediation, electrical upgrades, additional restrooms, security, as well as upgrades to parking, flooring and perimeter fencing.

In December, 2016, CGC and Family Service Association closed on a $6M NMTC financing to provide the financing necessary to renovate The Neighborhood Place, utilizing NMTC allocation provided by Enhanced Capital and Wells Fargo.

Cristo Rey Dallas College Prep

November 2, 2016 by

Founded in Chicago in 2001 by Father John P. Foley, S.J., the Cristo Rey network is the largest network of high schools in the US whose enrollment is limited to low-income youth.  Cristo Rey employs an innovative business model, wherein students work five days each month in entry-level jobs at local professional companies, with the fee for their work being directed to underwrite tuition costs. Operating on a franchise system, each Cristo Rey school is a partnership between a local operator with an established track record, and the proven Cristo Rey 9-12 programming that is based on rigorous academics, four years of professional work experience, and Catholic moral values, employed in a high-expectations environment. Students’ tuition is subsidized by the same work study program that prepares them for college, as well as putting them in good position to succeed in their first job.

Cristo Rey Dallas College Prep (“CRDCP”), the 30th Cristo Rey school nationwide, welcomed its inaugural 126-member freshman class in September, 2015, operating out of the St. Augustine Drive site in Pleasant Grove, under a lease with the Catholic Diocese of Dallas.  The need for a Cristo Rey school in the Pleasant Grove neighborhood in Dallas is readily apparent: of the 244,660 residents of Pleasant Grove, 64.5% are Hispanic, 29.5% are African American, and 55% of families earn $34,000 or less. The Dallas Independent School District (“DISD”) is considered an underperforming school district, and within DISD, the primary and secondary schools in Pleasant Grove are among the lowest-performing, while not benefitting from any strong, established secondary charter schools, like other areas of Dallas. Only 71% of Pleasant Grove students graduate high school, and only 41.6% of high school seniors took the ACT/SAT, and their average score was a 16/36 (22nd percentile) on the ACT, and 1104/2400 on the SAT (1550 is the benchmark for college readiness).

While the need for the new CRDCP school was apparent, the existing 60-year old facilities on the Pleasant Grove campus – originally designed for 250 elementary school students – were woefully inadequate for a 500-student 9-12 high school.  So in 2015, CRDCP began preparations for a massive capital campaign to raise the funds necessary to build a new high school.  In November, 2016, Crescent Growth Capital worked with Cristo Rey Dallas College Prep to close a $9.5M NMTC financing for the first phase of its new high school facility, utilizing $7M in NMTC allocation from the City of Dallas and $2.5M from Capital One Bank, as well as a construction loan provided by Frost Bank.

The $9.7M Phase 1 LEED-certified facility will house 15 classrooms, 4 state-of-the-art science labs, and offices for the principal, dean of students and dean of academics, while creating 32 new jobs.

The project site is located within a USDA-designated Food Desert, and Cristo Rey Dallas has a strict no outside food policy. They provide students with meals through the National School Lunch Program and have school-wide physical recreation time on Friday mornings to encourage healthy habits. Future goals include starting a community garden to provide healthy food to both students and the community.

CRDCP will employ the same Corporate Work Study Program found in all Cristo Rey schools. The program is an innovative model of education that gives students a Catholic, college-preparatory education while earning work experience in a corporate setting.  Four students rotate through the week to fill the position full-time. Each student has an assigned day on which he or she works. On Friday, the four students rotate to share the fifth day of the week. In each four-week span, each student will have one week in which he or she works two days. Student schedules are created so that students never miss a class.

Tulane University – School of Social Work

May 18, 2016 by

127 Elk Place, completed in 1917 to house Elk Lodge #30, is one of the finest neoclassical Beaux Arts structures in existence within the Lower Central Business District National Register Historic District. Though the building’s interior has received repeated renovation at the hands of its subsequent owners, including Gulf Oil, the Institute of Mental Hygiene and, from November 2001, Tulane University, 127 Elk’s beautiful exterior has remained almost completely unaltered from its original appearance, documenting the robust participation of early-20th century New Orleanians in the nationally-significant Benevolent and Protective Order of the Elks.

When Tulane University decided to relocate its School of Social Work – itself an institution of longstanding prominence – from its Uptown New Orleans campus to downtown New Orleans, they again turned to Crescent Growth Capital to handle the historic tax credits. CGC was hired to supervise the state historic tax credit application and monetization process for 127 Elk Place’s $4.5 million conversion into the new home for the Tulane School of Social Work.

CGC authored all the historic preservation certification applications for the project, translating the design of project architect Eskew+Dumez+Ripple into an easily-comprehensible narrative, resulting in – once again – no conditions attached to the Part 2 approval issued by the Louisiana Division of Historic Preservation.

Subsequent to CGC’s receipt of Part 3 approval on behalf of its client, CGC steered the project through the Louisiana Department of Revenue’s exacting review process. Over $4 million was classed as Qualified Rehabilitation Expenses, with CGC marketing the resulting credits, generating nearly $1 million in sale proceeds for Tulane University.

 

Omaha Early Learning Center – Gateway Project

May 6, 2015 by

Inspired by the Educare Learning Network, the Omaha Early Learning Centers (“OELC”) provide early childhood education programming to the most needy children in Omaha – a population that has grown significantly over the past decade.  In the ten years ending in 2011, the Midwest saw a 40% increase in childhood poverty, the greatest such increase in the US.  Studies have shown that children living in poverty start school 2-3 years behind their peers in terms a educational development, and are seven times less likely to graduate high school.  Furthermore, a November, 2009 study concluded that every dollar spent on early childhood education equates to a 7-10% rate of return: poverty-stricken children that enroll in early childhood development programs are better prepared when they enter the school, more likely to graduate from high school, more likely to earn a higher wage, and are less likely to resort to public aid, or turn to crime.

In January 2014, Congress appropriated $500M to expand the number and quality of early learning opportunities for infants and toddlers through the Early Head Start – Child Care Partnerships grant program.  OELC, in partnership with the Buffett Early Childhood Fund, found itself in a unique position to combat Omaha’s alarming rise in poverty by leveraging these Federal dollars into new early childhood programming.  That program needed a home, though, so in mid-2014, OELC engaged Crescent Growth Capital to facilitate the NMTC-financing for two new early childhood development facilities in Omaha.

In May 2015, OELC, the Buffett Early Childhood Fund and CGC closed on a stacked $10.26M State/$3M Federal NMTC financing to construct the Gateway ELC, utilizing NMTC allocation provided by Enhanced Capital.  The new 16-classroom facility will include a full kitchen and multi-purpose room, that will serve up to 96 infants and toddlers, and 68 pre-kindergarten students.  The project is anticipated to create 38 full time jobs, and an additional 10 jobs for contracted service providers.  Using the Educare model as its inspiration, the Gateway center will focus enrollment on the most impoverished children first, thereby maximizing its impact on those most in need of help.

Ursuline Academy – Fitness and Wellness Center

October 31, 2014 by

Ursuline Academy in New Orleans was founded in 1727, nine years after the city’s establishment. It is both the oldest continuously-operating school for girls and the oldest Catholic School in the United States. For 284 years, Ursuline Academy’s core values have rested upon consistent support for the advancement of women in society, regardless of their family’s station. This conviction has manifested itself repeatedly, and has included through the years a steadfast commitment to the education of African Americans and Native Americans, and an early recognition of the importance of sheltering battered women, among other groundbreaking stances.

In 2005, Hurricane Katrina threatened to extinguish this landmark institution. Floodwaters surged onto Ursuline’s State Street campus, and gale force winds tore holes in the roofs of the school’s historic buildings. Two years of consultations within the Ursuline community produced a compelling roadmap for institutional recovery. A key component of the school’s recovery plan was the construction of a multi-purpose fitness/wellness center. Notably, the Wellness Center was not intended to help Ursuline students alone; it was designed to serve the broader local community by promoting health, wellness, fitness, and good nutrition. The Fitness & Wellness Center’s design provided for the historic rehabilitation of the school’s circa 1935 gymnasium, an adaptive re-use embodying the highest aspirations of the green building movement – as there is no greener building than a re-used building. A new addition was also prescribed, with architecture that complemented but did not imitate that of the historic Ursuline campus.

Following upon its success structuring the financing for Ursuline’s Early Childhood Learning Center, Crescent Growth Capital was retained to arrange a dual New Markets Tax Credit/state historic tax credit financing. In October of 2011, CGC closed on a $5.5 million NMTC financing, permitting the start of construction. Authoring the state historic preservation certification applications for the project, CGC qualified the project for state historic tax credits, resulting in nearly $2.2 million in project costs being deemed Qualified Rehabilitation Expenses. Furthermore, CGC’s Part 2 application so effectively communicated the design of project architects Waggonner & Ball that no conditions were attached to the Part 2 approval issued by the Louisiana Division of Historic Preservation. In October of 2014, CGC completed its historic tax credit arranger services by accomplishing the monetization of the state historic tax credits on behalf of Ursuline Academy.

In the final analysis, Ursuline Academy received a total subsidy of over $1 million on their $6 million project.

Educare of Lincoln

October 21, 2014 by

Educare is a research-based program that prepares young, at risk children for school; a specially-designed place that nurtures early learning and sends a bold message about the value of investing in the first five years; an innovative partnership between the public and private sectors to create a more efficient, more effective early learning program; and a compelling platform to drive change among policymakers, business leaders and early childhood providers by showing what quality early learning looks like.

Educare of Lincoln opened in February of 2013 with 100 students and 35 staff. Educare of Lincoln represents a unique public-private collaboration among several community partners, including: Lincoln Public Schools, Community Action Partnership of Lancaster and Saunders Counties, the University of Nebraska, the University of Nebraska Foundation, and the Buffett Early Childhood Fund. In the typical Educare model, private funds build the facility and public funds are braided to support operations.

As with every Educare Early Childhood Learning Center, Educare of Lincoln specifically targets the most impoverished children first.  By providing crucial early childhood development to the most needy children, and developing a culture of parental involvement, Educare’s model is set up to affect lasting change in the lives of Lincoln’s most at-risk children.

In October, 2014, Educare of Lincoln, Buffett Early Childhood Fund and Crescent Growth Capital closed on a $10MM State QEI.  Using Nebraska NMTC allocations provided by Enhanced Capital Partners and Stonehenge Capital, the financing will provide nearly $1MM of net NMTC subsidy to the existing operations.  This subsidy will allow Educare to double its capacity to 191 students and increase employment to 50-60 full-time staff, putting the program in position to positively impact the lives of Lincoln’s poorest families for years to come.

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