Historic Tax Credits

Carver Theater

November 15, 2012 by

For 200 years, the Iberville-Treme neighborhood was home to New Orleans’ gens de couleur libres – “free people of color” – who were not enslaved before the Civil War. Despite sustained disinvestment, mounting crime, and the flight of its middle class to newly-desegregated neighborhoods, this community of free African Americans, the largest in the nation by the mid-19th century, provided a unique foundation for transformative artistic endeavor, most notably birthing jazz music.

Still a vital community in the mid-20th century, Iberville-Treme received its last private performing arts investment with the opening of the Carver Theater in 1950. Named after the famous African-American scientist George Washington Carver, the theater offered a state-of-the-art, non-segregated facility in which black New Orleanians could enjoy the latest Hollywood offerings from main-floor seating. By 1965 the end of Jim Crow laws made it possible for African Americans to sit with white audiences; they were no longer relegated to the balcony. Marooned within a deteriorating neighborhood, the Carver Theater closed for good in 1980.

In mid-2011, Crescent Growth Capital (“CGC”) began working with the Carver Theater to develop a plan that would rehabilitate the facility, create 133 permanent jobs and reinstate the artistic and cultural anchor of the neighborhood. In November, 2012, CGC helped the Carver Theater, First NBC Bank and the Louisiana Office of Community Development (“OCD”) close and fund a $5.5 million Qualified Equity Investment and a $2.25 million OCD Loan to finance the $9.7 million rehabilitation.

The new Carver Theater will provide badly-needed employment opportunities for the surrounding highly-distressed low-income community. The Carver will support 133 non-construction jobs, most of which will not require advanced degrees or special competencies. The positions are entry-level; the required skills will be learned on the job. Moreover, the theater is prominently situated in the center of the Iberville-Treme neighborhood – one of the most artistically fertile neighborhoods in the United States. Giving this neighborhood a platform for formal artistic expression is of inestimable value.

Furthermore, the Carver Theater’s sponsors will provide programming in support of this mission. Adjacent on-site facilities will house the Edward “Kidd” Jordan Jazz Institute. The institute will offer instruction in music performance, composition, and production. Dr. Henry Panion, a classical conductor and music arranger for Stevie Wonder, will collaborate with the institute on his new initiative, Gospel Goes Classical, providing the Carver with a prominent anchor production at the outset.

Finally, as a consequence of its use of historic tax credit equity, the Mid-Century Modern Carver Theater will be restored according to the exacting Standards for Rehabilitation promulgated by the United States Department of the Interior. The Carver’s redesign has received Historic Preservation Certifications from the Louisiana Division of Historic Preservation and the National Park Service.

Daughters of Charity Health Centers

December 30, 2011 by

With so many of the working poor lacking health insurance, supporting the provision of means-tested primary care translates into both socioeconomic advancement and the proactive management of chronic conditions before they produce real disability. Though the passage of healthcare reform should dramatically reduce the number of uninsured Americans, at last resulting in insurance coverage for the working poor, adequate access to primary care constitutes the next challenge confronting residents of low-income communities.

Crescent Growth Capital helped address the issue of access by structuring and closing in September and December 2009 two New Markets Tax Credit qualified equity investments totaling $13.5 million on behalf of Daughters of Charity Health Services of New Orleans. Operated according to the best practices “medical home” healthcare delivery model – where teams of nurses, physician assistants and doctors collaborate to deliver for patients coordinated, comprehensive treatment regimes – the two new health clinics financed in the transaction annually accommodate tens of thousands of additional primary care visits. The majority of the clinics’ clientele come from minority populations, and approximately 80% of patients are without health insurance. Fees are charged on a sliding scale, according to payment ability. Thanks to the new clinics, countless minor illnesses are being addressed prior to metastasizing, and many additional chronic conditions are being successfully managed. A significant and measurable improvement in community health is underway.

Crescent Growth Capital also secured valuable additional project funding by preparing and submitting Historic Preservation Certification Applications (Parts 1, 2 & 3), taking advantage of Daughters of Charity’s rehabilitation of the historic former St. Cecilia Elementary School. CGC solicited tax credit investor proposals and advised DCSNO through financial closing to generate an additional $1 million in gross tax credit equity, derived from the successful classification of over $4 million as Qualified Rehabilitation Expenses. Financial closing for this state historic tax credit transaction occurred in December of 2011.

Joy Theater

October 31, 2011 by

The Joy Theater, the newest of New Orleans’ downtown movie palaces, was for decades a beacon illuminating the intersection of Canal Street and Elk Place. From 1946 moviegoers enjoyed the latest Hollywood offerings, projected onto a huge single screen, from either ground-level or balcony seating. The Joy’s bold Moderne design, which made extravagant use of neon and floodlighting, exemplified the hopeful spirit of post-World War II New Orleans.

The Joy’s heyday would last a brief fifteen years. The decades following the theater’s completion witnessed a sea-change in moviegoing habits, both in New Orleans and around the country. Sustained disinvestment in urban downtowns was accompanied by the development of suburban multiplex theaters, television grew to dominate the entertainment landscape, and the single-screen movie palace became as obsolete as vaudeville. Despite these trying circumstances, the Joy Theater nonetheless persevered until finally closing in 2004, its Moderne-style beauty remaining essentially intact.

Though project sponsors concluded that the Joy was no longer viable as a movie theater, they perceived unmet market demand in New Orleans for a cutting-edge, versatile, medium-sized entertainment venue. As an architecturally-arresting mecca for live music and special events – akin to the House of Blues but possessing superior amenities, increased programming flexibility and vastly greater levels of visitor comfort – a restored Joy would dramatically punctuate the reviving downtown theater district, complementing the touring show focus of the soon-to-reopen Saenger Theatre across Canal Street.

Crescent Growth Capital was retained to model and close an intricate $5.0 million New Markets Tax Credit financing that leveraged state and federal historic tax credit equity, state Live Performance Infrastructure tax credit equity and state workforce credit proceeds to generate over $5 million in net subsidy to help realize this $12 million project. CGC and its consultants also successfully applied to the Louisiana Office of Community Development and secured $3 million of D-CDBG funds to close the project’s final financing gap.

St. Margaret’s Daughters Home

September 8, 2011 by

Mercy Hospital New Orleans was founded in 1924 and relocated to the Mid-City neighborhood in 1953 (pictured above is the original main facade of the 1953 hospital building). For over fifty years this facility was a principal institutional actor and employment center within both the Museum-City Park Cultural District and the Mid-City National Register Historic District.

Subsequent to the Katrina-induced levee failures in 2005, Tenet Healthcare – which had been operating the facility as Lindy Boggs Medical Center – opted not to reopen it.

In 2007, a demolition permit was secured by the hospital’s new owners; however, their plans for a mixed-use town center stalled. Three years later, in May of 2010, Crescent Growth Capital arranged an NMTC financing on behalf of St. Margaret’s Daughters Home to purchase the entire blighted, abandoned facility.

The redevelopment of the former Mercy Hospital/Lindy Boggs Medical Center in New Orleans by St. Margaret’s Daughters Home is a multi-phase project whose first manifestation will be the adaptive re-use of the hospital’s medical office buildings to accommodate a new permanent nursing home facility for St. Margaret’s.

Crescent Growth Capital structured and closed a $21.3 million New Markets Tax Credit qualified equity investment to fund both St. Margaret’s acquisition of the entire former hospital and a portion of the construction cost of its new nursing home within the facility. Subsequent phases will rehabilitate the remainder of the former Mercy facility for medical uses.

In addition to structuring the initial financial closing in 2010, Crescent Growth Capital, in conjunction with its consultants, secured Louisiana State Historic Tax Credit eligibility for the entire former Mercy/Lindy Boggs complex, garnering millions in historic tax credit equity for the project. The first state historic tax credit financing for the project was accomplished in September of 2011, generating $4 million for St. Margaret’s and enabling the definitive start of construction on Phase I.

CGC, in conjunction with its consultants, also secured for St. Margaret’s $3 million in CDBG funding, in the wake of a successful application to the State of Louisiana’s Project-Based Recovery Opportunity Program (“PROP”). Financial closing on these funds was achieved in July of 2011.

Belleville Assisted Living Facility

May 18, 2011 by

Restoring job growth to the nation’s economy is the primary objective of policymakers today, and most economists believe that the most significant opportunities for new employment will be found within the healthcare industry. The boomer generation is aging, and the percentage of the nation’s population that is over age 65 is anticipated to increase appreciably in the coming 50 years, generating steady growth in demand for healthcare. Furthermore, ever-increasing longevity on the part of the nation’s elderly, coupled with the geographical fragmentation of the extended family has meant that demand for assisted living services is growing at an even faster rate than demand for healthcare overall.

Like the nation as a whole, New Orleans is in need of additional assisted living capacity, and, in the wake of Katrina, there is an insufficient supply of entry-level job opportunities available to disadvantaged individuals. Crescent Growth Capital was able to help address both challenges by structuring and closing the financing to fund the construction of the new Belleville Assisted Living Facility. The Belleville ALF will provide 53 badly-needed assisted living units in a 55,000 square-foot facility, while simultaneously creating nearly 50 jobs and returning to commerce a historic but blighted school building in New Orleans’ Algiers Point National Register Historic District.

The Belleville ALF is located on New Orleans’ West Bank, across the Mississippi River from the city’s historic core. Extensive development on the West Bank did not begin until the late 1950s, with the completion of the Greater New Orleans Bridge linking downtown to Algiers. For the next thirty years, the West Bank offered middle-income families new, affordable housing, extensive employment opportunities, and plentiful shopping. Conditions began to sour, however, in the wake of the mid-1980s Oil Bust. In a matter of months, the West Bank suffered tens of thousands of job losses; in the succeeding twenty years, poverty, crime and disinvestment increasingly characterized what had been a stereotypically prosperous American suburb.

Belleville ALF constitutes a significant and visible investment on the West Bank. A former elementary school that had lain dormant for over thirty years will be rehabilitated and restored to commerce. The historic fabric extant on the property will be adaptively re-used, embodying the highest aspirations of the green building movement – as there is no greener building than a re-used building. The region’s shortage of assisted living capacity, acutely felt on the West Bank, will be meaningfully eased by Belleville’s 53-unit facility. Most significantly, nearly fifty new jobs will be created, over half of which will be entry-level positions ideal for the West Bank’s disadvantaged low-income population.

Despite demonstrable demand for additional assisted living units, the New Orleans West Bank is considered a challenging location for market rate investment; conventional lenders had been unwilling to underwrite the entire cost of the Belleville facility. In response, Crescent Growth Capital and the principals of the Belleville ALF project devised a capital stack that took advantage of the location’s existing historic fabric as well as the highly-distressed character of the contemplated investment to integrate federal and state historic tax credit equity with the New Markets Tax Credit financing structure.

The tax credit equity generated by this structure lowered the project’s borrowing requirements and enabled the successful underwriting of a smaller conventional loan. Without the use of tax credit equity, it would have been impossible to secure funding sufficient to complete the project.

The New Orleans Healing Center

May 2, 2011 by

The New Orleans Healing Center serves to bridge the social divide between the two inner-city, historic neighborhoods it straddles, building inter-community trust while furthering post-Katrina recovery throughout New Orleans by providing a holistic, safe, sustainable facility that heals and empowers the individual and the community.

The Healing Center functions as a community center, offering needed retail services and supporting programs promoting physical, nutritional, emotional, intellectual and spiritual well-being. An adaptive reuse for the circa 1926 55,000-square foot former Universal Furniture Building at the intersection of St Claude and St Roch avenues in the 8th Ward of New Orleans, the center includes, among other amenities, yoga and pilates instruction, a cooperatively-owned organic grocery, a hydroponic rooftop garden, a street university, a health food café, juice bar and coffee shop with a youth training program, alternative healing, and a New Orleans Police Department substation.

Successfully executing a transaction of tremendous complexity, Crescent Growth Capital structured and closed in May of 2010 a $10.4 million New Markets Tax Credit qualified equity investment combining seven discrete funding sources to realize this project’s vision. Federal and state New Markets Tax Credits, federal and state historic tax credits, city and state CDBG dollars and sponsor equity were utilized. Construction was completed in 2011.

Historic Tax Credits

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