New Markets Tax Credits

Lime Wind Farm

August 6, 2012 by

In August, 2012, Crescent Growth Capital (“CGC”) worked with Lime Wind, LLC to secure a NMTC investment from Wells Fargo and an $8.4MM NMTC allocation from Albina Community Bank to fund a $8.4MM wind farm in Lime, Oregon. The Lime Wind Farm project leveraged Federal New Markets Tax Credits, a USDA Guaranteed loan and REAP Grant, a 50% Oregon income tax credit, an Oregon DOE Small Scale Energy Loan, and Federal 1603 Income Tax Credit Grant proceeds, providing sufficient subsidy to make the Renewable Energy project feasible.

The $8.15MM Lime Wind budget financed the installation of six rebuilt Danish Nordtank 500/41 wind turbine generators (“WTGs”), resulting in an estimated combined 7,806 megawatt-hours per year of renewable energy – enough power for 800 homes. The project is connected to the Idaho Power Company’s transmission grid to allow the electricity from the Project to be sold to Idaho Power Company under a 20-year Power Purchase Agreement (“PPA”). The Project also sells Renewable Energy Credits to the Bonneville Environmental Foundation.

The project is the brainchild of Randy Joseph, a woodworker and entrepreneur from Baker City, Oregon. Joseph has long been a proponent of leveraging small, locally-owned renewable energy projects that can provide energy independence for a region with few energy alternatives. So he spent 10 years securing approvals, juggling the requirements of five separate lending agencies, solving equipment purchase and installation issues, and negotiating the requisite PPA to make his wind farm a reality.

For more information, please visit the Lime Wind Farm website, and watch their promotional video.

Update (7/17/2014): Wells Fargo recently released a promotional piece on the Lime Wind Farm, you can watch it here.

St. Mary’s University

June 28, 2012 by

Founded in 1852, St. Mary’s University was the first institution of higher learning established in San Antonio. St. Mary’s is the oldest Catholic university in Texas and is a nationally-recognized liberal arts institution with a student population of nearly 4,000 of all faiths and socio-economic backgrounds. St. Mary’s is a federally-designated “Hispanic Serving Institution” with a 70% student minority population. Furthermore, 45% of the student body are first generation college attendees.

Located in the heart of San Antonio’s predominately Hispanic Westside, St. Mary’s is one of the largest employers in the neighborhood and boasts a long history of neighborhood engagement. The university’s students, staff, and faculty are committed to community service. The Westside neighborhood suffers from poverty, high unemployment and poor health on the part of its inhabitants. In 2007, the university established a task force to work with community leaders and local business proprietors in order to develop a comprehensive plan suited to the Westside’s specific needs. The task force identified a targeted area consisting of seven census tracts; all are low-income, and six are severely distressed.

The resulting St. Mary’s Neighborhood Revitalization Project, part of the school’s five-year strategic plan, commits the university to working on the revitalization of the areas surrounding the main campus and to be actively involved in community outreach, development and improvement. The Neighborhood Revitalization Project has three chief components: the Neighborhood Resource Center, the Sports Complex, and the renovation of St. Louis Hall.

The Neighborhood Resource Center component of St. Mary’s Neighborhood Revitalization Project will provide desperately needed technical assistance and microgrants to struggling businesses and residents in the neighborhood.

The sports complex component will combat endemic obesity among the poor Hispanic population of the Westside by providing access to state-of-the-art recreational facilities. The new complex will also generate significant new tax revenues for local government, in recognition of which Bexar County has set aside $6 million to help fund the facility.

The final component of the university’s revitalization project, the renovation of historic St. Louis Hall, preserves for future generations one of the most significant buildings remaining on the Westside and the centerpiece of St. Mary’s University.

In June 2012, Crescent Growth Capital accomplished a financial closing on a $12 million Qualified Equity Investment, providing St. Mary’s University with a significant New Markets Tax Credit benefit. This NMTC financing, the first of two that are projected, will keep St. Mary’s Neighborhood Revitalization Project on track by compensating for city budget cuts that threatened the Neighborhood Resource Center with closure, as well as by alleviating pressure on alumni donors and the university’s endowment.

San Antonio Food Bank

June 20, 2012 by

Founded in 1980, the San Antonio Food Bank (“SAFB”) is a non-profit organization that serves as a clearinghouse, receiving and storing donated food, fresh produce, and other groceries. SAFB distributes these items in manageable quantities to over 500 independent partner agencies that help people in need. However, SAFB’s activities are not limited to distributing food to street-level food kitchens; the food bank also encourages better nutrition throughout the region via additional services, and operates programs to help individuals escape the poverty that produces chronic hunger.

San Antonio Food Bank’s activities meaningfully improve the lives of thousands throughout the organization’s sixteen-county service area. Every week, 58,000 people receive food as a consequence of SAFB’s programs. SAFB directly operates three community kitchens in the area, including the facility located at San Antonio’s Haven For Hope homelessness social service campus. The food bank sponsors initiatives targeting seniors and children, and, using repurposed beer trucks, delivers perishable fresh foods to partner agencies that lack refrigeration facilities onsite.

The region served by SAFB struggles with an average 20.5% poverty rate, with correspondingly high rates of food insecurity. San Antonio’s Bexar County is burdened by a 25.1% poverty rate, and 32.5% of residents within the highly-distressed low income census tract housing SAFB’s facility live in poverty. The poverty rate is known to closely approximate rates of food insecurity; individuals below the poverty line face painful trade-offs every day, with half reporting that they often have to choose between paying rent and buying food.

The now-financed SAFB expansion project will double the size of the facility, to 204,000 square feet, and will bring a significant benefit to the region. The project will create 105 direct FTE jobs and 50 construction jobs, with most permanent jobs in facility operations (warehousing, truck drivers). A direct economic impact of $50 million for the Bexar County economy is anticipated. Freezer space will triple in size, permitting SAFB to accept an additional 7 million lbs/year of high-quality, protein-rich foods. Annual fresh produce capacity will also triple, to 81 million lbs/year, and the expansion will accommodate an additional 41,600 hours of volunteer labor a year. Notably, SAFB’s new facility will permit the food bank to accept donations from an additional 20 grocery stores operated by local chain HEB, meaning that all 44 regional HEB stores would participate in donating short-shelf items to SAFB.

Currently, forty-five percent of all donations are perishable, and this proportion will grow as best practices demand that those suffering from food insecurity receive nutritionally beneficial assistance. Encouraging a healthy San Antonio is, along with feeding the hungry and ameliorating poverty, a key element of SAFB’s mission. Increasing the amount of space available to store perishables meaningfully aids this ongoing initiative, especially since the food bank’s service area suffers from above-average rates of obesity and diabetes. Within Bexar County itself, 65.8% of adults are overweight or obese, and 15.6% of residents are diabetic, twice the national average. Promoting the consumption of fresh foods, including plentiful servings of fruits and vegetables, also reinforces federal government policies designed to encourage fresh food consumption and eliminate food deserts.

In recent years, non-profits such as SAFB have experienced increasing difficulty in fundraising, due to the nation’s weak economic recovery from the Great Recession. The $27 million NMTC financing structured by Crescent Growth Capital for the San Antonio Food Bank will generate upwards of $4 million in bottom-line subsidy for the facility expansion.

Significantly, this benefit lets SAFB continue to direct all monetary contributions it receives toward supporting ongoing operations and programming. For instance, funding for SAFB’s continuing efforts at nutrition education will not diminish. Ongoing programming, such as the Summer Food Service Program for children and the Healthy Options Program for the Elderly (“HOPE”), will receive more resources.

Absent the NMTC financing, the timetable to complete the expansion would have been highly uncertain, held hostage by the limited amount of philanthropic dollars available within SAFB’s sixteen-county service region, and the food bank’s programming would doubtless have suffered greatly as resources would have been diverted from operations to help finance the facility expansion.

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.

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