Transcript Document 7283889

Developing Imaginative
Higher Education Institutions to Capitalize
Strategies for
on the New Markets Tax Credit Program
June 28, 2007
Michael J. Goldman, Nixon Peabody, LLP
Robert K. Jenkins, Hampton Roads Ventures, LLC
James D. Howard, Jr., TransCapital / Dudley Ventures
Robert Fenning, Old Dominion University
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Robert K. Jenkins
Hampton Roads Ventures, LLC
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Providing Creative Financing
Solutions for Innovative
Real Estate Projects
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Hampton Roads Ventures is a community development investment firm. We
partner with public, private sector and non-profit community development
organizations to attract private sector investment capital for innovative real
estate projects in lower income neighborhoods, particularly inner city and rural
communities. Staffed by experienced community economic development
professionals, Hampton Roads Ventures is extremely sensitive to the unique
opportunities, challenges and constraints facing public sector and non-profit
community development agencies.
· Educational Authorities
· Municipal Governments
· Empowerment Zones
· Redevelopment Authorities
· Community Development
Corporations
· Inner City Real Estate
New Strategies and Opportunities for the Development and Financing
of College and
University Facilities
Developers
& Investors
Hampton Roads Ventures – Wall Street Equity Sharing Fund
Our “Hampton Roads Ventures – Wall Street Equity Sharing Fund”
provides smaller real estate developers the opportunity to
partner with major institutional investors to develop and
own substantial real estate projects in their communities.
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Historic Tax Credits
Hampton Roads Ventures assists community developers to
avail state and federal historic rehabilitation tax credit
programs to help finance the preservation and
adaptive reuse of eligible older buildings.
New Strategies and Opportunities for the Development and Financing of College and University Facilities
New Markets Tax Credits
Hampton Roads Ventures was awarded
two allocations of NMTC; one in 2003
and another in 2005. We were the first
organization in Virginia to receive an
allocation of NMTC. We are the only
organization in Virginia and among
only a handful in the country to have
received more than one allocation;
and the first firm in the country to
develop a successful strategy to
combine NMTC with tax-exempt bond
financing.
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Examples of Properties Assisted by
Hampton Roads Ventures, LLC
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Henry Street Historic District, Roanoke, VA
Strand Theatre/Culinary Arts School
Brief description of the project:
 Adaptive reuse redevelopment of an 83-year
year old historic theatre that housed the offices of
celebrated African American film maker Oscar
Micheaux in the 1920s, into a “state of the art”
culinary school with catering and banquet facilities
to be administered by the Roanoke Higher
Education Center, a consortium of 14 Virginia
colleges and universities.
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Project is located directly across the street from
the Dumas Center for Artistic Development in a
municipal designated Virginia Redevelopment area
with a poverty rate of 40.37% that has also been
designated as a HUD Enterprise Community and an SBA HUBZone.
Closed: May 2006
Amount Invested: $6,200,000
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Old Dominion University Springhill Marriott, Norfolk
Brief description of the project:
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Development of a 110 room Marriott Springhill Suites
hotel to be developed adjacent to Old Dominion University
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Project is located in a community with median household
incomes of 39% of the area and a poverty rate of 36% that
has been designated as a HUD Enterprise Community
and an SBA HUBZone
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Developer/Operator has committed to co-sponsor a
workforce development initiative, in partnership with local
housing authority and Empowerment Zone to train and hire
public housing residents for hotel positions
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Project is an integral component of a comprehensive
redevelopment initiative administered by the Norfolk
Redevelopment and Housing Authority
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First real estate project in the USA financed
with a combination of tax-exempt bonds and
New Market Tax Credits
Closed: November 2006
Amount Invested: $14,000,000
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Hospitality Financing
Hampton Roads Ventures believes hotels to be major catalysts for both job
creation and community revitalization. We offer highly flexible and innovative
financing products to encourage the development and/or redevelopment of
both limited service and full-service hotels. Our strategies are designed
specifically to maximize the amount of financial resources available to hotel
owners and developers while simultaneously minimizing the financial risk to our
investors.
We are members of the National
Association of Black Hotel Owners,
Operators & Developers
(NABHOOD).
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Robert Jenkins
Hampton Road Ventures, LLC
201 Granby Street
Suite 1200
Norfolk, VA 23510-1812
Ph. (757) 616-0478
Fax (757) 640-0052
Email: [email protected]
Miami Partnership Office
1221 Brickell Avenue
Suite 900
Miami, Florida 33131
Ph. (305)374-4611
Fax (305)374-6146
New Strategies and Opportunities for the Development and Financing of College and University Facilities
James D. Howard, Jr.
TransCapital / Dudley Ventures
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Investing in Tax Advantaged College and University Facilities
TransCapital is a 30 year old specialized financial services firm which has raised
over $10 billion in tax advantaged transactions. TransCapital offers financial
structuring expertise, equity, debt and investment opportunities in the following
tax credit programs:
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Federal Low Income Housing
State Low Income Housing
New Markets Tax Credits
Federal Historic Tax Credits
State Historic Tax Credits
Renewable Energy Tax Credits
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Investing in Tax Advantaged College and University Facilities
TransCapital's Involvement in the NMTC Program
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TransCapital has been extensively involved in the
NMTC Program since its inception:
Successfully supported NMTC applicants which
have received in excess of $2 billion in allocations
of New Markets Tax Credits.
Structured, marketed and closed NMTC funds with
committed debt and/or equity in excess of
$400,000,000 of QEIs.
Closed QEIs utilizing leveraged and non-leveraged
structures including tax-exempt bond financing.
First NMTC Go Zone transaction closed in
New Strategies
and Opportunities for the Development and Financing of College and University Facilities
January
of 2007.
Investing in Tax Advantaged College and University Facilities
New Markets Tax Credits and Development Opportunities
with Colleges and Universities
• Strong Sponsorship
• Significant Community Impact
• Public Private Partnerships Expanding
in this Sector
• Pre-existing Debt Financing Sources
• Growth Marketplace
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Investing in Tax Advantaged College and University Facilities
Investor Perspectives on Hampton Road Ventures
ODU Transaction
• Underwriting the Project and Sponsors
• Tax Exempt Bond Component and the
Attendant Benefits
• Credit Enhancement to the Senior
Debt Provided by the
New Markets Tax Credits
• Community Impact and Visibility
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Investing in Tax Advantaged College and University Facilities
James D. Howard, Jr.
[email protected]
2930 East Camelback Road, Suite #215
Phoenix, AZ 85016
Phone: (602) 468-9400
Fax: (602) 468-2775
New Strategies and Opportunities for the Development and Financing of College and University Facilities
Robert Fenning
Old Dominion University
New Strategies and Opportunities for the Development and Financing of College and University Facilities
THE UNIVERSITY AS DEVELOPER
(New Market Tax Credits)
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Old Dominion Profile & The University Village
Getting Started - Why? Who? How?
Critical Issues/Elements
Project Profile(s)
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
University Profile
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22,000 Students
Carnegie Research Extensive University ($67M/Yr)
Forbes’ Cyber University
Top Programs
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Modeling & Simulation
Oceanography
Nuclear Physics
Engineering Management
• Historically a Commuter Campus, Although More Than
6,000 Students Live Within Walking Distance of the Norfolk
Campus
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
Strategic Plan 2005-2009
• Become Top 100 Research University
• Create a Viable, Lively Campus Community
• FIND THE MEANS NECESSARY TO ACCOMPLISH THE
GOALS
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
REAL ESTATE FOUNDATION
• 501(c)(3)
• Purpose – “to receive, administer, and distribute funds and
property of all kinds exclusively in furtherance of the
objectives of the University”
• Formed in 1994 in Anticipation of University Village
Development
• 13 Members (Prominent Members of the Region’s Real
Estate and Financial Community)
• University President – Ex Officio
• University VP for Administration & Finance – Executive
Director
New Strategies and Opportunities for the Development and Financing of College and University Facilities
UPDATED MASTER PLAN
PROJECT FORMATION
• 75-Acre/13 City Block Area
• Created “Hampton Boulevard Redevelopment
Area”
• Master Planned Utility/Infrastructure
• Performed Market Demand & Economic Impact
Analysis
New Strategies and Opportunities for the Development and Financing of College and University Facilities
PROJECT REALIZATION
Public/Private Partnership
• University
• City of Norfolk / NRHA
• Private Developer(s)
Total:
$ 75M
$ 15M
$230M
$320M
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
The University As Developer – Why?
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To Generate Supplemental Revenue Streams
To Expand the Campus
To Eliminate Blight or Address Crime
To Promote Economic Development
To “Prime the Pump” (Supplement Market Forces)
To Provide Co-Curricular Facilities
To Improve the Competitive Standing (Image)
To Create a Destination
To Circumvent State Procedures or Lack of Authority
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
The University As Developer: Who & How?
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The University
The University’s Real Estate Foundation (Or Other 501(c)(3)
CDC
CDA
City or Redevelopment Authority
• HOW - As “Deep Pocket”
- As “Enabler”
- As “Partner”
- As “Advocate”
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
The University As Developer
Critical Issues/Elements
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Market Demand
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Land Availability & Cost •
Authority
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Structure/Methods
Financing
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Tax Implications
Liability/Risk
Compatibility of
Revenue With Mission
Impact on Other
Projects
Debt Management
EXIT STRATEGY
New Strategies and Opportunities for the Development and Financing of College and University Facilities
SPRINGHILL SUITES HOTEL
New Strategies and Opportunities for the Development and Financing of College and University Facilities
HOTEL
Project Description
• 115 Rooms (All Suite-Style) and 2 Apartments; 5
Stories
• Café on Ground Floor
• Shared Parking in Adjacent Deck; Separate
Entrance/Exit
• Estimated Cost: $8 Million
• Flag: Marriott SpringHill Suites
New Strategies and Opportunities for the Development and Financing of College and University Facilities
HOTEL
Site Plan
New Strategies and Opportunities for the Development and Financing of College and University Facilities
HOTEL
Development/Ownership
• ODU Real Estate Foundation Contracted for Market
Demand Study; Established Demand for Hotel
• Foundation Issued RFP for Hotel Developer; Selected
BBL Development
• Hotel Design Approved by City of Norfolk and
Marriott
• Foundation Ground Leases Land to BBL; BBL
Construct/Own/Manage Hotel
• Construction Starts: Late 2006; Expected Completion:
Fall, 2007
New Strategies and Opportunities for the Development and Financing of College and University Facilities
HOTEL
Financing
• Developer Responsible for Financing
• Developer Received Approval to Issue
Empowerment Zone Bonds from Cities of Norfolk
and Portsmouth
• Developer Received New Market Tax Credit
Funding With Norfolk Redevelopment & Housing
Authority (Hampton Roads Ventures)
New Strategies and Opportunities for the Development and Financing of College and University Facilities
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
The Mast Center
• 50,000 sf Regional Higher Education Center
• 50,000 sf Commercial Building
– Virginia Modeling, Analysis & Simulation
Center (VMASC)
• Anchor for 9 Building Tech Park
• Component of 130+ Area Mixed Use
Development
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
Project Development
• RFQ/RFP Design/Build Process
• University Purchases Higher Education
Center & Leases VMASC Building
• 3rd Party Developer Finances, Designs &
Buildings Project(s)
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
Project Financing
• University Leveraged $6.2M (State GOB
Proceeds)
• Developer Obtained City Development
Grants ($1.2M Portsmouth & $1.8M Suffolk)
• Developer Equity
• New Market Tax Credits
New Strategies and Opportunities for the Development and Financing of College and University Facilities
New Strategies and Opportunities for the Development and Financing of College and University Facilities
OLD DOMINION UNIVERSITY
New Market Tax Credits –
Issues/Opportunities
• Complexity
– Development Group
– Boards
– Counsel(s)
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Market Based (Must be Economically Sound)
If Sound, Minimal Risk
“Low Hanging Fruit”
Get Started Early
Developers (vs. Companies/Retailers/etc.) are Most
Interested
• It Can Make the Deal Work
New Strategies and Opportunities for the Development and Financing of College and University Facilities