New Markets Tax Credits

Steel Warehouse

July 19, 2013 by

Founded in South Bend, Indiana in 1947, Steel Warehouse, LLC (“Steel Warehouse”) is a family-owned, downstream steel manufacturer engaged in transforming raw steel into various finished products. Steel Warehouse has grown from one location in South Bend to nine manufacturing facilities spread across the Midwest and Upper South, and welcomes a third generation of family members into leadership positions.

Steel Warehouse Alabama, LLC (“SW Alabama”) was conceived to function as a pickling operation for raw steel purchased from the new ThyssenKrupp steel mill in Calvert, AL. The $32.0 million facility would apply an acidic solution to the raw steel, removing surface impurities and preparing the steel for its end users. In June, 2013, Crescent Growth Capital worked with Steel Warehouse Alabama, LLC to close and fund a $10MM Alabama State NMTC QEI to fund the construction of the new steel pickling plant.

The Steel Warehouse plant epitomizes the ancillary investment that Alabama intended to attract to the state when it signed its NMTC program into law in August, 2012. The new Steel Warehouse plant will create 65 new full-time jobs at competitive pay with full benefits for a community with a population of 277 as of the 2010 census. Furthermore, the new pickling plant will require an additional 35 full-time employees at the ThyssenKrupp mill.

CitySquare

June 28, 2013 by

In 1988, Dallas businessman Jim Sowell was moved by his concern for the problems associated with homelessness and poverty. He took action in response to the human suffering he observed by working with friends to launch the Central Dallas Food Pantry in a strip shopping center at Henderson and Central Expressway.

In 1990, the organization received status as a 501 (c) 3 non-profit corporation and, due to its growth, relocated to larger quarters at 801 N. Peak in East Dallas. In August 1994, current President and CEO, Larry James, joined the organization. Shortly afterwards, Central Dallas Food Pantry began doing business as Central Dallas Ministries and the organization acquired an additional building at 409 N. Haskell, the current location of its food pantry.

On Monday, October 25, 2010 Central Dallas Ministries officially launched under the new name CitySquare. CitySquare offers a variety of poverty-fighting programs throughout Dallas as well as in Houston, San Antonio and Austin, based on four core values: Community, Faith, Justice and Stewardship.

In February, 2012, CitySquare partnered with Crescent Growth Capital (“CGC”) to develop a financing package for a comprehensive “Opportunity Center” at the Southeast corner of I-30 and Malcolm X Blvd. The Opportunity Center, a joint effort between CitySquare, PepsiCo, Inc., and Workforce Solutions of Greater Dallas, is a $14MM multi-service 52,000 square foot facility. It will provide a food distribution center, a new state of the art wellness center, a comprehensive employment training center that will house new offices for Work Force Solutions of Greater Dallas and CitySquare’s WorkPaths employment training division, CitySquare’s AmeriCorps headquarters/offices, and staging areas for CitySquare’s growing Summer and After-School Feeding Program funded by the Texas Department of Agriculture.

In addition, the Center will place key services and economic opportunities in one central location. Currently, our Resource Center/Food Pantry, wellness activities and WorkPaths employment program are located in three separate facilities. Centralizing these key services will create greater economies of scale in staff and resources, and allow us to serve more of our neighbors. Moreover, the Center will leverage our existing partnerships to promote greater stability in the workforce, the programs at the Center, and the overall community.

In June, 2013, CGC helped CitySquare and its partners close and fund a $12.5MM Federal Qualified Equity Investment, utilizing a $12.5MM allocation of Federal New Markets Tax Credits, provided by the Dallas Development Fund, and leveraging $4.1MM of NMTC equity provided by AT&T Corp.

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.

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.

Boy Scouts Circle Ten Council – Camp Wisdom

September 28, 2012 by

For over 100 years the Dallas-headquartered Circle Ten Council of the Boy Scouts of America has utilized outdoor instruction in woodcraft to cultivate leadership skills, independent thinking and good citizenship among the region’s youth. However, the most disadvantaged youths often struggle to participate in scouting, because the volunteer time required to establish and maintain typical grassroots Boy Scout infrastructure cannot be provided by the single parents raising so many of these children. In response, Circle Ten has long been committed to an outreach program to serve underprivileged boys, ScoutReach, which provides financial and human resources to help poorer boys participate in scouting. Last year over 8,400 of the 54,000 Boy Scouts in the Dallas region, nearly 1 in 6, were assisted by the ScoutReach program.

The social and community benefits of scouting flow from the Scout Method, a time-tested program of informal education and character development that the hinges upon the intrinsic appeal of the outdoors to young men. The Scout Method develops in participants individual initiative, self-reliance, collaborative skills, and, in general, encourages young men to achieve their full physical, intellectual, social and spiritual potential. Empirical research suggests that men who were Boy Scouts are less likely to drop out of high school, substantially more likely to graduate from college, and go on to earn higher incomes when compared to the population at large.

Within metropolitan Dallas, the ScoutReach program targets underprivileged young men, bringing the benefits of participation in Boy Scouts to those individuals most at risk of becoming anti-social, unproductive members of society. However, several years of participation in scouting is typically required for these benefits to be realized. Boy Scout statistics indicate that 85% of scouts who go camping in their first year will continue in scouting for another year. By contrast, retention rates among those who do not camp in their first year are appreciably lower, with only 50% continuing to participate for another year. Bolstering Circle Ten’s camping capacity and improving the camping experience is therefore crucial to the effectiveness of the ScoutReach program.

Located on 371 acres just 11 miles from downtown Dallas, Camp Wisdom is the primary campground for scouts participating via the ScoutReach program. Camp Wisdom also serves as a venue for the Boy Scouts’ school-based Learning for Life character-building leadership program and is home to nearly four dozen campsites, rifle and archery ranges, a fully-stocked lake, an outdoor amphitheater, and a high-ropes fitness challenge course. Camp Wisdom’s last round of infrastructure improvements occurred decades ago.

Circle Ten Council hired Crescent Growth Capital to structure and execute a $5.7 million NMTC financing to help fund badly-needed facility and infrastructure upgrades. With a program including construction of a new leadership conference center, to double teaching capacity and replace an antiquated 1940s-era dining hall, the Camp Wisdom improvements will not only be utilized by the Boy Scouts but will also be available for use by outside organizations, such as the Dallas Independent School District.

In the course of successfully closing the NMTC financing for Camp Wisdom, CGC located a Dallas-based multinational corporation to act as the tax credit investor on the transaction. The willingness of this firm to invest at an appreciably higher price than the going market rate resulted in a net benefit to the Boy Scouts of nearly 20% of the value of the New Markets Tax Credit financing, a significant improvement over the 12-13% common to NMTC financings of this size.

Consequently, CGC was able to effect over $1 million in subsidy for the Circle Ten Council in service of their plans for Camp Wisdom, improving retention rates among ScoutReach participants, better integrating the facility with the surrounding highly-distressed low income community, and bringing the benefits of scouting to more individuals far sooner than would otherwise be the case.

University of the Incarnate Word – Eastside Vision Clinic

September 14, 2012 by

San Antonio’s Eastside neighbohood has long struggled economically, with metro San Antonio income growth and investment largely occuring at the urban periphery. San Antonio Mayor Julian Castro’s administration has pledged to focus attention and resources on the Eastside, an area familiar to Crescent Growth Capital through its involvement in structuring the Healy-Murphy transaction, which closed in April 2011. More recently CGC was able to recommence catalyzing needed investment on the Eastside, thanks to an invitation received from its past client, the University of the Incarnate Word, to execute a $10 million NMTC financing to help fund the Eastside Center for Vision Science & Health Care.

The Eastside Center promises to remedy an acute need for eyecare, as well as support better targeting of social services. Currently, there is only one eye care specialist maintaining a practice on the Eastside, a sprawling neighborhood of 170,000 residents. Partnerships with other Eastside social service providers and educational institutions will be implemented, such that activities ranging from literacy assessments to internships for students at a nearby community college, St. Philip’s, will transpire within the new facility.

The Eastside Center itself will be a 30,000 square-foot, new-build public health facility dedicated to bringing badly-needed vision care to the disadvantaged population of the Eastside. Approximately 50,000 patients will be treated annually, with all insurances accepted, including Medicare and Medicaid, and with a sliding fee schedule in place to permit treatment for even the uninsured. The vision clinic will build upon UIW’s pre-existing expertise in providing optometry services to impoverished minority populations, employ 50 permanent staff and generate the additional pedestrian and vehicular traffic essential to bolstering aggregate market demand for new retail establishments on the Eastside.

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