New Markets Tax Credits

Lexington Regional Health Center (“LRHC”) opened as Tri-County Hospital in September of 1976.  The hospital began with seven patients, 40 beds, five physicians, one PA, a board-certified surgeon, and visiting specialists.  The organization grew through the 1980’s and added additional services including radiology, therapy, rehabilitation, and hospice.  A 4,300 square-foot expansion in 1989 relocated six physical therapy rooms, added a meeting room, and included an area for wellness programs for the community.  The addition of Home Health Care services, which encompasses a 45-mile radius of Lexington, Nebraska, was completed in 1994.  Another expansion in 1996 provided more room for the physical therapy department with the opening of the Community Health & Fitness Center.  In 2005, Tri-County Hospital was designated as a Critical Access Facility by the State of Nebraska.

Over the past 10 years, the Hospital’s inpatient and outpatient utilization has grown significantly.  LRHC handles roughly one-third of all discharges in Dawson and Gosper counties, and more than half of the Hospital’s annual discharges are Medicare/Medicaid patients: LRHC has the 4th highest Disproportionate Patient Percentage out of all Nebraska hospitals.  In response to the ever-increasing demand for its services, LRHC began laying out a comprehensive renovation and expansion plan in 2010.

The two-phase construction plan includes the addition of a new operating room suite including 3 operating rooms, a new sterile processing department with supporting space, a new specialty clinic area, and a new central utility plant, as well as the renovation of 25 inpatient beds.

On July 28, 2014, Crescent Growth Capital worked with LRHC, Enhanced Capital, and Wells Fargo to close and fund Phase 1 of the NMTC financing, a $10.4MM State NMTC QEI, leveraged with Great Western Bank debt and USDA Rural Development Loans, for the $25MM renovation/expansion.

On November 20, 2014, Crescent Growth Capital and LRHC closed on Phase 2 of the expansion financing, utilizing $7MM of Federal NMTC allocation provided by Raza Development Fund.  By using the same leverage sources and NMTC investor, the Hospital minimized the incremental transaction costs associated with the second closing, and used the additional subsidy to round out the construction budget.

The two-phase NMTC financing provided significant subsidy to the project, facilitating the expansion of the Hospital’s footprint and scope of services — all at no additional cost to the low-income census tracts surrounding the Hospital.  The expansion is expected to create 24 new permanent FTE positions, while retaining the Hospital’s existing 170 FTE employees.

16 Burbank Avenue, Brunswick, ME

In 2005, the federal government initiated its most recent round of military base closures under the Base Realignment and Closure (BRAC) process. The U.S. Department of Defense (DoD) and Congress have used this process five times over the last two decades to reduce and realign the nation’s military installations.

During the 2005 BRAC round, three Maine military installations were targeted for closure or realignment: Naval Air Station Brunswick, Portsmouth Naval Shipyard, and the Defense Finance and Accounting Services Center in Limestone. In August of 2005, the federal BRAC Commission saved two of those installations, but voted to close Naval Air Station Brunswick (NASB) after 68 years of operations.  The closure resulted in 6,500 jobs lost within the immediate community and far reaching economic impact.

In August, 2013, Priority Real Estate Group completed Phase I of the renovation of 16 Burbank Avenue and 62 Pegasus Street – two properties at the former Naval Air Station known as Brunswick Landing.  16 Burbank Avenue is the former Navy Lodge, a 15,000 square foot building converted to accommodate 28 classrooms and a life skills room on the main floor and professional offices on the second floor.   62 Pegasus Street, the 26,000 square foot former Navy Recreational Building and Bowling Alley, was converted to classrooms, a day care, an indoor recreational room, occupational therapy room and professional offices.  Both of these properties are leased to Providence Services Corporation – the largest provider of services to children with Autism and developmental disabilities in Maine.

In March, 2014, Crescent Growth Capital helped Priority Real Estate Group (“PREG”) close and fund a $10.2mm Maine State NMTC QEI to consolidate Phases I & II and complete the construction of Brunswick Landing Phase II.  These two Phases represent much needed job creation and an economic stimulus to an otherwise blighted area: Phase I of the Brunswick Landing created a combined 142 new jobs for Providence Services and Coastal Ortho & Sports Medicine, with annual salaries ranging from $28,000 to $650,000.  Phase II will allow Providence to combine two more regions at the Brunswick Landing location, relocating 60 staff members to the area and setting the stage for future growth.

There are over 10,000 veterans in Midcoast Maine, many of whom had a connection to Brunswick Naval Air Station. With the base closure, the veterans did not have a presence in the community to offer services nor the financial means of establishing one.  As part of Phase II, Priority Real Estate Group renovated 2,000 square feet of the 62 Pegasus Street property at a cost of $200,000 and leased the space to the Midcoast Veterans Council of Maine for $1 per year.  This donation allowed the Council to set up a Midcoast Veterans Resource Center aptly located on the former Naval Air Station Property where they can service the many veterans in our community.

Tracing its origins to the creation in 1913 of a pediatric dysentery clinic established on the lawn of Parkland Hospital, Children’s Medical Center Dallas has grown to the fifth largest pediatric healthcare organization in the nation. In 1967, the present facility opened within the nascent Dallas Medical District. In the past 45 years Children’s has developed numerous centers of excellence, among them pediatric cardiovascular care. The Comprehensive Center for Heart Care at Children’s Medical Center today attracts referrals from throughout the region, the nation, and internationally.

The Heart Center’s units have always been spread out across different floors of the hospital, scattered throughout the campus. To increase patient capacity, improve care outcomes, and provide additional research opportunities, Children’s developed a Master Design Plan for a state-of-the-art centralized Heart Center.  In 2010, after three years of planning, Children’s launched a $77 million, multi-phase initiative that would result in the consolidation of every functional unit of the Heart Center onto one floor of Children’s main hospital. Children’s anticipates that its plan, once fully realized, will meaningfully improve collaboration among specialists, streamline administration by locating back offices adjacent to care administration areas, and promote improved cooperation from the families of the children receiving care, an essential component of pediatric medicine.

In late 2012, Children’s brought Crescent Growth Capital (“CGC”) in to help them secure New Markets Tax Credits to help finance the fourth phase of this plan: a new $11.1 million Interventional Suite.  The fourth and most expensive phase of Children’s Master Design Plan, the Interventional Suite project will include new, state-of-the-art operating rooms and catheter labs, MRI facilities, a multi-purpose procedures room, and a relocated cardiac prep & recovery unit.  On October 31, 2013, CGC helped Children’s close and fund a $10.5MM Federal Qualified Equity Investment to finance the construction of the Interventional Suite, using a $10.5MM allocation of Federal New Markets Tax Credits provided by Hampton Roads Ventures, and NMTC equity provided by AT&T Corp.

Not only will this subsidy consolidate and significantly upgrade Children’s ability to provide state-of-the-art patient care, but it will also free up hospital funds to open 5 additional pediatric primary care clinics in distressed neighborhoods, locating non-emergency care within communities of need and freeing up valuable ER space within the main hospital for emergency cases.