Historic Tax Credits

Kern’s Bakery (Kern’s Food Hall)

July 9, 2024 by

Born in Germany in 1836, Peter Kern emigrated to the United States and settled in Knoxville during the Civil War. By the third quarter of the 19^th century, Kern’s Bakery was established in downtown Knoxville, growing steadily in subsequent decades to become an established, beloved regional bakery. Acquired in 1989 by Sara Lee, the now-discontinued Kern’s brand remains a touchstone in the memories of Knoxvillians.

Sara Lee operated the principal Kern’s facility on Chapman Highway until 2012. For nearly a decade, plans gestated to redevelop the shuttered property, a prominent Knoxville landmark. In 2017, the historic bakery, constructed incrementally from 1931, was successfully listed on the National Register of Historic Places, though further development stalled after some exterior rehabilitation work was completed.

In 2019, Kern’s Bakery was acquired by a team led by Atlanta-based Mallory & Evans who envisioned a $32 million project that would convert the former Kern’s Bakery industrial facility into a mixed-use destination retail and food hall development to anchor the booming South Knoxville riverfront.

Hired to provide contingent fee-based historic preservation consulting and tax credit arranging services, Crescent Growth Capital structured a financing incorporating Federal Historic Rehabilitation Tax Credits, PACE funding, a TIF grant from Knoxville city government, bridge financing for the historic tax credit equity, and construction and senior loans. Crescent closed on the project’s financing in February of 2022 and then structured and closed, in December 2023, a financing to take out the PACE funding component.

Crescent’s in-house historic preservation specialist prepared a five-element Historic Preservation Certification Application (including multiple Part 2 amendments) over a three-year period. Part 3 approval of the HPCA was received on July 1, 2024, by which point Kern’s Food Hall had debuted, delighting Knoxvillians who still cherished memories of Peter Kern’s community business.

University of the Incarnate Word – Dubuis Hall

November 24, 2023 by

Present in Texas since 1867, the Catholic Order of the Incarnate Word purchased in 1897 the 283-acre estate of the late Colonel George Brackenridge, located in San Antonio at the present-day intersection of Broadway and E. Hildebrand. By 1909 “Incarnate Word College” enrolled 125 young women. Accelerating enrollment growth demanded the construction of a dedicated dormitory building, and the Collegiate Gothic-style Dubuis Hall was completed in 1929. Coeducational enrollment began in 1971, and the college was renamed the University of the Incarnate Word in 1996.

Desiring to reposition the never-renovated residence hall as a “freshman dormitory” designed to encourage the development of esprit de corps among incoming college classes, the university approached Crescent Growth Capital once again to determine whether tax credits could allow for a significant subsidy to be derived, to offset the $10 million project cost.

In April 2020, Crescent was hired on a contingent fee-basis to qualify Dubuis Hall for Texas Historic Preservation Tax Credits and monetize the resulting credit award on behalf of UIW. A twin-track process was necessary to accomplish this: 1) Nominate Dubuis Hall to the National Register of Historic Places and 2) Prepare and submit the Texas state historic preservation certification application (Parts A, B and C).

Crescent’s in-house historic preservation specialist prepared a four-element Historic Preservation Certification Application (including multiple Part B supplements) over a two-and-a-half-year period, as well as supervising the parallel effort undertaken to individually list Dubuis Hall on the National Register of Historic Places. Subsequent to its National Register listing on May 30, 2023, Crescent received Part C approval from the Texas Historical Commission on June 20, 2023. A lengthy monetization process developed, with Crescent successfully navigating numerous delays to convey net sale proceeds of approximately $2 million to the university in November 2023, representing the fourth discrete UIW capital project for which Crescent has arranged a sizeable subsidy.

Allen University – Good Samaritan-Waverly

July 21, 2023 by

The mid-20^th century Good Samaritan-Waverly Hospital building represents the culmination of the efforts of Columbia’s Black residents to establish modern healthcare facilities amidst the Jim Crow system of segregation prevailing in South Carolina before the advent of the modern Civil Rights Movement. The long-anticipated fruit of the 1938 merger of the city’s Waverly and Good Samaritan Hospitals, the present building was completed as a state-of-the-art facility in 1952 and included operating rooms, x-ray equipment, fifty beds, and a nurse training facility.

Despite the hospital’s comprehensive suite of services, operating margins were tight, due to a high debt load and persistently low reimbursement rates for care. In the wake of desegregation, Richland County completed a new, racially-integrated general hospital, which prompted the closure of Good Samaritan-Waverly in 1973.

The shuttered hospital was acquired in 1987 by Allen University, an HBCU founded in 1870 whose main campus is across the street. A succession of plans were considered over the years, and in 2008 the building was individually listed on the National Register of Historic Places. Subsequent to the appointment of President Ernest McNealey, in late 2017, plans began to coalesce around an adaptive re-use for the hospital. Fundraising commenced, but by the end of 2019 a significant gap remained.

In August of 2020, Crescent Growth Capital was hired to provide historic preservation consulting and tax credit arranger services on a contingent fee basis. Crescent authored the Historic Preservation Certification Application for South Carolina State Historic Tax Credits and Federal Historic Rehabilitation Tax Credits, successfully advancing an argument to justify the corner addition proposed for the project by pointing to the mid-block siting of the hospital at the time of its completion.

From a structuring standpoint, as tax credit arranger Crescent sourced $12 million in New Markets Tax Credit allocation authority, combined the resulting subsidy with federal and state historic tax credits, and took advantage of the South Carolina Abandoned Building Tax Credit to bring over $4 million in bottom-line benefit to the project.

In 2023, Allen University inaugurated the Waverly-Clyburn Building, within the original hospital, along with the Boeing Center auditorium, constructed as an addition. Building uses include a home for Allen’s newly-established school of education, for teacher training; a permanent home for the Institute for Civility; a newly-established South Carolina African-American Hall of Fame; and a new home for the university’s seminary.

Ursuline Academy – SMART Lab/STEM Studio

December 28, 2021 by

Ursuline Academy has educated young women for nearly three hundred years. Founded in 1727, only nine years after New Orleans’ establishment, the school currently occupies an eleven-acre campus inaugurated in 1912. Nearly six hundred students attend grades Pre-Kindergarten through 12.

In recent years Crescent Growth Capital has repeatedly helped Ursuline Academy leverage its capital projects fundraising to generate tax credit subsidies, resulting in a more attractive and competitive suite of educational and programmatic offerings. In 2010 Crescent structured and closed a New Markets Tax Credit financing to enable a key element of Ursuline’s post-Hurricane Katrina recovery plan: the debut of a dedicated Early Childhood Learning Center. Another central institutional objective, the rehabilitation of the school’s circa 1935 gymnasium to accommodate its enlargement and conversion into a Fitness and Wellness Center, was achieved with the assistance of Crescent’s contingent fee-based historic preservation consulting and historic tax credit monetization services. Subsequent historic preservation consulting work was undertaken by Crescent on behalf of the Ursuline Sisters to subsidize improvements to the National Shrine of Our Lady of Prompt Succor, located on the academy’s campus but administered independently.

In January 2020, Crescent was again approached by Ursuline Academy to provide contingent fee-based historic preservation consulting and historic tax credit monetization services, this time in support of its development of a SMART Lab and STEM Studio within its 1912 academic building. The academy deleted a circa 1960 library space to allow for the installation of an IOT-enabled SMART Lab, a cutting-edge practice platform for STEM instruction, a robotics competition zone, an entrepreneurship space, and a media lab. An adjoining bathroom stack was also reconstructed to code, conditioned by the new central HVAC system installed for the SMART Lab and finished with salvaged marble partitions and historic wooden fittings.

Crescent Growth Capital’s in-house historic preservation specialist prepared a twelve-element Historic Preservation Certification Application over twenty-two months. Part 3 approval was received on November 16, 2021, with credit monetization accomplished by Crescent and tax credit sale proceeds delivered to Ursuline in December.

New Orleans Museum of Art – Stern Auditorium

September 24, 2021 by

The New Orleans Museum of Art (NOMA) was established in 1910 in the wake of an endowment received from sugar planter Issac Delgado. Known as the “Issac Delgado Museum of Art” for its first six decades, the museum’s historic core consists of a Greek Neoclassical structure completed in 1911 to a design by Samuel Marx. In 1971 three wings were added, extending from the east, west and north elevations of the original museum and providing for more exhibit space, improved amenities, and a dedicated auditorium. The 1971 additions were executed in a minimalist style, devoid of ornament and clad in white concrete aggregate panels. The formerly quadrangular museum became T-shaped in plan at this point and was renamed “The New Orleans Museum of Art.” In 1993, the most recent set of additions were completed, executed in a restrained postmodern style, and resulting in the creation of two rectangular courtyards about the east-west axis of the museum.

The museum interior contains two significant spaces. The skylit, covered central courtyard, just inside the main entry, is original to the 1911 structure and is executed in a highly detailed Greek Neoclassical style modified by decorative flourishes inspired by subtropical flora. A postmodern style atrium three stories high and dating to 1993 spans the museum’s east-west axis and provides dramatic, centralized access to every programmatic component of the building.

The New Orleans Museum of Art today boasts a collection of almost 40,000 objects, with notable strengths in French and American art, photography, glass, and African and Japanese works. The preferred venue in the region for important touring exhibitions, NOMA in its early years hosted a retrospective on Pablo Picasso (1940) organized by the Museum of Modern Art in New York City and welcomed, on the occasion of the 150th anniversary of the Louisiana Purchase, a survey of five centuries of French painting (1953), populated exclusively by works on loan from the Louvre. The museum’s 1971 expansion enabled the hosting of still more elaborate exhibitions, including those displaying treasures from the tomb of King Tut (1977) and artifacts addressing the life and times of Alexander the Great (1982), with the former exhibition welcoming nearly one million visitors in the course of its short run. The completion of the 1993 expansion permitted additional notable exhibitions, including one on the paintings of Claude Monet (1995) and, in honor of New Orleans’ 300th birthday, an exhibition (2018) displaying together for the first time since the 18th century many of the works collected by the city’s namesake, Philippe II, Duc d’Orleans. The most recent physical enlargement of NOMA’s footprint occurred with the debut in 2003 and expansion in 2019 of the outdoor Besthoff Sculpture Garden, installed around several lagoons adjacent to the museum.

Hired in late 2019 to provide contingent fee-based historic preservation consulting and tax credit monetization services for a $7.1 million rehabilitation of the museum’s Stern Auditorium, east courtyard, and café, Crescent Growth Capital’s in-house historic preservation specialist prepared a six-element Historic Preservation Certification Application over an eighteen-month period. The project reconfigured the non-historic auditorium to increase the space’s flexibility and technological capacity, with three of its four walls serving as the new location for Enrique Alferez’ “Spirit of Communication” (1967), salvaged from its original installation within the escalator lobby of the now-demolished Times-Picayune building in New Orleans. The non-historic east courtyard (1993) was enclosed, though extensive glazing preserves its light-filled character. Part 3 approval was received on May 17, 2021, with credit monetization accomplished by Crescent in September. Tax credit sale proceeds of approximately $1 million were subsequently delivered to NOMA.

St. Ann Square

June 21, 2021 by

Sometimes a setback paves the way for a successful project. Affordable housing developer Providence Community Housing had approached Crescent Growth Capital to determine whether historic tax credit equity could subsidize its planned 53-unit, mixed-income Sacred Heart at St. Bernard housing development. The adaptive re-use of the Our Lady of the Sacred Heart Church (1955) was to be teamed with new construction of an adjacent, four-story building. Unfortunately, the prescribed subdivision of the intact, historic church interior into multiple individual units could not, despite several creative design iterations suggested by Crescent, be squared with the Secretary of the Interior’s Standards for Rehabilitation. Providence ultimately completed the project, incorporating the former church and including Crescent’s suggested design refinements, but without an HTC subsidy.

Pleased with Crescent Growth Capital’s historic preservation consulting process, its disappointing outcome in that instance notwithstanding, Providence Community Housing was receptive when Crescent reached out in late 2017, in the wake of Providence receiving an award of $7.5 million in Low Income Housing Tax Credits. While Providence had not contemplated attempting to incorporate historic tax credit equity into the capital stack for the project in question, a housing development of 59 units for low-income seniors to be called St. Ann Square, Crescent suggested that both federal and state historic rehabilitation tax credits could indeed be secured.

St. Ann Square presented considerable complexity from an historic preservation consulting standpoint. The project would combine a rehabilitation of the historic St. Ann Church and School building (1924) and adjacent 19^th century structures – themselves the subject of a federal HPCA process which concluded successfully in 2002 – with the addition of two historic “shotgun” style dwellings sharing the square and the erection of a two-story, newly-constructed apartment building. The multiple historic buildings shared little to no functional relationship during their period of significance – all were contributing elements to the Esplanade Ridge National Register Historic District – which necessitated authoring six individual federal and state HPCAs.

Accordingly, Crescent’s in-house historic preservation specialist prepared and submitted no fewer than thirty-seven elements to six federal Historic Preservation Certification Applications over a three-and-a-half year period, also submitting Louisiana State HPCAs in conjunction with the federal application parts. Skillful navigation of the Secretary’s Standards was required, with particular work going into windows, exterior cladding, and the faithful conservation of remaining character-defining elements and intact interior spatial organization.

Part 3 approval for the final building was received on June 15, 2021, at which point some $4 million in federal and state historic tax credit equity had been generated to subsidize the completed $16.5 million St. Ann Square project.

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