Historic Tax Credits

The Troubadour Hotel

May 22, 2015 by

Crescent Growth Capital was approached by a tax lawyer in the summer of 2014. Familiar with our experience structuring historic tax credit equity, interfacing with state historic preservation offices and authoring historic preservation certification applications, he introduced a development team comprised of a commercial real estate developer, Slumber Corners, a hotel manager/operator, Commune Hotels & Resorts, and an equity backer. These partners envisioned developing a $42 million, 185-key Joie de Vivre boutique hotel. The development team had under contract for $5.5 million a gutted, fire-damaged, 16-story building dating to 1967: the former Rault Center.

The effort to qualify this structure for Federal and State Historic Tax Credits ran parallel to the project financing track. Though 1111 Gravier was less than 50 years old, its historic significance from the standpoint of building life safety codes justified pursuit of an individual listing on the National Register of Historic Places (Under Criterion A: Buildings associated with events that have made a significant contribution to the broad patterns of our history). Our team’s presentation to the Louisiana State National Register Review Committee was successful, and 1111 Gravier (“The Rault Center”) was ultimately named to the National Register of Historic Places on January 20, 2015.

In addition to working on the HTC eligibility front and related lease-pass through financial structuring requirements, CGC assisted the development team in their search for a senior construction lender, securing a $28 million senior loan. The total Qualified Rehabilitation Expenses to be incurred will approximate $30 million.

The outcome? A long-abandoned, 16-story building will be returned to commerce as the Troubadour, adding momentum to the ongoing renaissance of New Orleans’ downtown district, post-Katrina.

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.

Tulane University – Devlin Fieldhouse

October 15, 2014 by

Constructed in 1933, partially with funds earned by Tulane University’s football team in its 1932 appearance in the Rose Bowl, Devlin Fieldhouse is the 9th-oldest continuously active basketball venue in the United States. In 2012, Crescent Growth Capital was hired to supervise the state historic tax credit application and monetization process for the fieldhouse’s $5 million historic rehabilitation.

CGC authored two sets of historic preservation certification applications for the two-phase project, translating architect Gould Evans’ design into an easily-comprehensible narrative resulting in no conditions attached to the Part 2 approvals issued by the Louisiana Division of Historic Preservation.

The rehabilitated fieldhouse retains the original’s fine Art Deco exterior while re-exposing the steel trusses and redwood ceiling decking formerly obscured by a drop ceiling installed in an earlier renovation. The entrance lobby and common areas were recast according to a more spacious design prescribing clean lines and a dark color palette. Additional work was accomplished renovating and expanding public restrooms and locker rooms.

New Orleans Military & Maritime Academy

October 3, 2014 by

Inspired by the acclaimed military academy model employed by the Noble Street Charter School in Chicago, the New Orleans Military and Maritime Academy (“NOMMA”) opened its doors in August 2011. Requiring that all its student-cadets enroll in an on-campus Marine Corps Junior Reserve Officer Training Corps (MJROTC) unit, NOMMA accepts all students who have passed Louisiana’s 8th Grade high-stakes LEAP test. Students defined by the state as “at-risk” are particularly sought. School leaders believe that NOMMA’s emphasis on self-discipline and “moral literacy” coupled with a “standards-based” curriculum that clearly defines academic and behavioral expectations, creates a uniquely potent platform to inculcate good habits in today’s youth.

The charter school opened in a temporary facility, a former public elementary school dating to the 1950s, but from the beginning its leaders envisioned moving to a permanent home. A plan was devised to rehabilitate historic Buildings 16 & 71 in Federal City, a former naval base, and link them with new construction to produce an 85,000 square-foot, state-of-the-art school campus.

Click this link to watch a short video on the school: Community Impact: NOMMA

In October 2012, Crescent Growth Capital helped NOMMA close on a $17.9 million aggregate QEI with Dudley Ventures and SECDE Ventures, leveraging CDBG proceeds and Qualified Zone Academy and Qualified School Construction Bonds (“QZABs” and “QSCBs”) to help fund the $18.4 million construction budget. The closing was a massive undertaking, requiring a team effort from a number of parties, including Iberia Bank, the New Orleans Federal Alliance, the Algiers Development District, the U.S. Marine Corps and the Louisiana Office of Community Development.

Simultaneously, CGC authored sets of federal and state historic preservation certification applications for Buildings 16 and 71, mediated between project architects and the Louisiana Division of Historic Preservation, and aided in the creation of a new National Register Historic District: the U.S. Naval Station Algiers Historic District, which came into being on September 11, 2013. In 2014, the historic tax credit application and financing process was closed out, with NOMMA having incurred $10 million in Qualified Rehabilitation Expenses. This QRE total generated over $4.5 million in federal and state historic tax credit equity for the school.

For more information on the school, please visit their website.

New Orleans Center for Creative Arts

December 19, 2013 by

New Orleans Center for Creative Arts is a regional, pre-professional arts training center that offers students intensive instruction in culinary arts, dance, media arts: filmmaking & audio production, music (classical, jazz, vocal), theatre arts (drama, musical theatre, theatre design), visual arts, and creative writing, while demanding simultaneous academic excellence.

NOCCA was founded in 1973 by a diverse coalition of artists, educators, business leaders, and community activists who saw the need for an institution devoted to our region’s burgeoning young talent. Wynton and Branford Marsalis, Harry Connick, Jr., Terence Blanchard, Jeanne-Michele Charbonnet, Wendell Pierce, Anthony Mackie, Mary Catherine Garrison and Gary Solomon Jr. are only a few NOCCA graduates who can attest to the extraordinary educational opportunity the Center represents to the children of Louisiana.

NOCCA was operated for its first quarter-century by the Orleans Parish School Board; students were required to be residents of New Orleans. In 2000, the school relocated to its present campus, on the banks of the Mississippi River in the Faubourg Marigny neighborhood, and its governance was revised to provide for direct administration by the Louisiana Board of Elementary and Secondary Education. At this time NOCCA began accepting students residing anywhere in Louisiana, in service of its broadened role as the premier performing and visual arts high school for the state.

In the ensuing years, NOCCA’s curriculum matured to encompass concentrations in eleven disciplines, including jazz, classical instrumental music, drama and the visual arts. The events of 2005 tested the institution, scattering its faculty and student body across the country, but NOCCA’s stakeholders responded by embracing a bold plan for growth.

Additional concentrations, in the digital media and culinary arts were launched, and, in 2011, a longstanding dream to offer at NOCCA a full school day of instruction came to fruition with the debut of the Academic Studio. For the first time, curricula in math, science and the humanities were taught on campus, making it possible for NOCCA students to acquire an innovative, fully comprehensive, arts-centered secondary education without having to leave the site. NOCCA’s progress has come in the face of ten budget cuts, some occurring mid-year, over the last four years; the school’s state funding has decreased by 25% during this period.

Responding to these challenges with characteristic boldness, the NOCCA Institute – NOCCA’s community support and advocacy organization – developed a plan for the NOCCA Forum, a dramatic $26.4MM proposal to lay the foundation for the school’s future. The Forum will incorporate cutting-edge facilities and include revenue-generating elements to provide independent means to the institution’s endeavors. In early 2013, NOCCA contacted Crescent Growth Capital (“CGC”) to assist them in bringing together financing for the Forum.

On December 19th, 2013, CGC helped NOCCA close and fund a $12.5MM Qualified Equity Investment (“QEI”), using New Markets Tax Credits allocations of $6.5MM and $6MM provided by First NBC Bank and Whitney Bank, respectively, and leveraging an estimated $7.8MM in Federal and State Historic Tax Credit equity, and $14MM of Qualified Zone Academy Bonds (“QZABs”). The Federal and State New Markets and Historic Tax Credit equity, combined with $14MM of QZABs provided the NOCCA Institute with nearly $12.5MM in combined subsidy, which amounts to nearly half of the project budget.

Myrtle Banks

May 17, 2013 by

At its mid-20th century heyday, the Oretha Castle Haley Boulevard corridor – then called Dryades Street – was simultaneously a welcoming retail area for New Orleans’ African American population and the center of Orthodox Judaism for the region. By the 1970s, however, the street was in steep decline, with the relocation of synagogues to the suburbs and the retail strip’s raison d’être removed by desegregation. For nearly 40 years, repeated revitalization attempts consistently faltered, despite O.C. Haley Boulevard’s proximity to both downtown New Orleans and St. Charles Avenue.

Since 2005 investment in the corridor has slowly gathered steam, with non-profit groups like Café Reconcile joining with public bodies like the New Orleans Redevelopment Authority (NORA) to focus on the O.C. Haley corridor. Amidst this gathering momentum, New Orleans-based Alembic Community Development identified the former Myrtle Banks School as a prime target for redevelopment. Constructed as McDonogh 38 Elementary School in 1910, the historic structure was deemed surplus in 2002 and closed. A dramatic fire ravaged the shuttered property in 2008, transforming it into an enormous, conspicuous eyesore one block away from NORA’s new headquarters building. Undaunted, Alembic envisioned the adaptive re-use of the school building as a commercial office and fresh food hub for the surrounding low income community.

While Alembic had successfully completed a number of projects employing Low-Income Housing Tax Credits, Myrtle Banks presented the development company with its first opportunity to use New Markets and historic tax credits. In July 2011, Alembic hired Crescent Growth Capital to structure and close the financing for the project. After nearly two years of work, the financing for Myrtle Banks closed in May of 2013, with CGC incorporating New Markets Tax Credit, federal and state historic tax credits, a subordinated loan, sponsor equity, and CDBG dollars sourced from NORA and Louisiana’s Office of Community Development to fund the $13.8 million redevelopment of the school.

Now under construction, the Myrtle Banks Redevelopment will be anchored by a 23,000 square-foot grocery store, the Dryades Public Market, which will seek to make available locavore produce at an affordable price point.

The Myrtle Banks redevelopment also features 10,000 square feet of landscaped green space/edible landscape and 11,000 square feet of small business office space; 25-30 permanent, full-time jobs will be created.

Historic Tax Credits

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