New Markets Tax Credits

Victory Lumber

December 29, 2014 by

In 2009, the principals of Victory Lumber purchased a shuttered lumber/chip mill facility from Arkansas Economic Development Commission. Over the past 5 years, Victory has operated the chip mill, while developing a strategy to rebuild and restart the larger lumber mill.

On December 29, 2014, Victory Lumber and Crescent Growth Capital closed on a $12.06MM Arkansas State NMTC allocation and a $9MM Federal NMTC allocation to finance the $10MM renovation budget. NMTC allocations were provided by Enhanced Capital and Stonehenge Capital who provided $7.3MM and $4.8MM of State NMTC’s, and $5MM and $4MM of Federal NMTC allocation, respectively. First NBC Bank provided term and bridge construction debt.

The fully-renovated lumber mill will add 54 full-time jobs to Victory’s 11 existing positions at the chip mill, in a census tract with more than 15% unemployment. The project will also bring back to commerce one of Camden’s largest manufacturing facilities.

Educare of Lincoln

October 21, 2014 by

Educare is a research-based program that prepares young, at risk children for school; a specially-designed place that nurtures early learning and sends a bold message about the value of investing in the first five years; an innovative partnership between the public and private sectors to create a more efficient, more effective early learning program; and a compelling platform to drive change among policymakers, business leaders and early childhood providers by showing what quality early learning looks like.

Educare of Lincoln opened in February of 2013 with 100 students and 35 staff. Educare of Lincoln represents a unique public-private collaboration among several community partners, including: Lincoln Public Schools, Community Action Partnership of Lancaster and Saunders Counties, the University of Nebraska, the University of Nebraska Foundation, and the Buffett Early Childhood Fund. In the typical Educare model, private funds build the facility and public funds are braided to support operations.

As with every Educare Early Childhood Learning Center, Educare of Lincoln specifically targets the most impoverished children first. By providing crucial early childhood development to the most needy children, and developing a culture of parental involvement, Educare’s model is set up to affect lasting change in the lives of Lincoln’s most at-risk children.

In October, 2014, Educare of Lincoln, Buffett Early Childhood Fund and Crescent Growth Capital closed on a $10MM State QEI. Using Nebraska NMTC allocations provided by Enhanced Capital Partners and Stonehenge Capital, the financing will provide nearly $1MM of net NMTC subsidy to the existing operations. This subsidy will allow Educare to double its capacity to 191 students and increase employment to 50-60 full-time staff, putting the program in position to positively impact the lives of Lincoln’s poorest families for years to come.

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.

UAB Health Systems

September 4, 2014 by

The University of Alabama at Birmingham Health Systems is an academic health center, comprised primarily of UAB Hospital and the VA Medical Center. Spanning 11 city blocks of downtown Birmingham, UAB Hospital is the 18th largest hospital in the nation, with nearly 1,118 beds, and serves as the primary teaching hospital for the UAB School of Medicine. Becker’s Hospital Review recently ranked UAB Hospital as one of the “100 Great Hospitals in America,” and UAB Medicine as one of the “150 Great Places to Work in Healthcare.” Additionally, the publication reported that more than 290 physicians across 55 specialties were named to the “Best Doctors in America.” With more than 16,000 employees, UAB Medicine is also the second largest employer in Alabama.

In September 2014, UAB Health System and Crescent Growth Capital worked with Hancock Bank and Enhanced Capital Partners to structure and close a $10MM Alabama State QEI, financing a new $7.2MM automated Medication Dispensing System and a $965K Pharmacy Management and Barcode Packaging System. These upgrades will dramatically improve the hospital’s ability to efficiently dispense and track the medication provided to its patients, as well as reducing medication errors, improving quality of care, heightening medication security and optimizing inventory to reduce the impact of drug shortages. Possibly the most important benefit of these new systems is their portability, allowing seamless integration with UAB’s existing infrastructure, and minimizing ongoing system maintenance and IT involvement.

Orthman Manufacturing

August 22, 2014 by

Orthman Manufacturing was founded by Henry Orthman in the late 1950’s as a manufacturer of conversion kits for implements and tractor brands. From his 160-acre farm on the Platte River just north of Lexington, NE, Henry Orthman’s original conversion kits allowed farmers to keep their existing implements when they purchased a new tractor. Over the subsequent 50 years, Orthman has become an industry leader in agricultural innovation, developing industry-standards such as the TripSaver, the Pivoting Disc Stabilizer, the Adjust-a-Rate Planter Drive, the Flex-Gang Cultivator and the Strip Tillage machine. Today, Orthman has agreements with John Deere, Agco, and Monosem, manufacturing agricultural machinery and implements, as well as conveyors, materials bulk-handling systems and SoilMover industrial earth-moving equipment for a variety of industries.

By 2012, Orthman’s track record of consistently delivering innovative, high-quality machinery pushed market demand beyond capacity at the Platte River facility, so Orthman began working with the City of Lexington on a new plant within City Limits. The state-of-the-art 115,000 SF manufacturing and painting facility would allow Orthman to continue its growth in the US market, and by moving into Lexington, would provide the City with 200 new jobs: 100 new and 100 existing Orthman jobs that were relocated from Platte River. The City agreed to provide $1.25MM in TIF bonds, and a $500K Development loan to help with the $13.4MM facility.

In late 2013, Orthman engaged Crescent Growth Capital (“CGC”) to help structure and execute NMTC financing to fill the funding gap. On August 22, 2014, CGC and Orthman closed on a stacked $10.4MM State NMTC and a $9MM Federal NMTC financing, provided by Enhanced Capital Partners and Rural Development Partners respectively, leveraged using a senior loan provided by Mutual of Omaha.

Lexington Regional Health Center

July 28, 2014 by

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.

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