General Partner Changes During the Compliance Period: Basil Rallis Tax Credit Property Disposition 2008: Obligations and Opportunities Through Year 15 and Beyond Structuring General Partner Transfers and Secondary Market Sales

L.P. Initiated -- LP has removed original GP and is selling the GP rights Positives 1. Single point of negotiation Dealing with the business and required amendments to the partnership agreement with the same party The transaction has a higher certainty of investor consent 2. Same goal of moving towards a closing Control of the process of amendments and investor consent Assistance with agency, or lender consents 3. Rarely involve personnel issues Properties are generally managed by a third party and the transfer of the GP interest is not tied to the existing management company

L.P. Initiated, Continued Negatives 1. Often challenged properties are paired with performing…the Good, the Bad and the Ugly Dealing with DRO issues Tax implications for GP Advances, LP Advance, and Deferred Developer Fees 2. Non-affiliated or Non-profit partners that need to consent may feel cut out of the transaction. Early identification of potential economic impact ROFO

L.P. Initiated, Continued Mechanics 1. Fairly straight forward accounting issues, without many surprises. 2. LP understands the tax and accounting issues.

G.P. Initiated -- Successful GP is selling their various economic interests Why is the GP a Seller? 1. Retirement/Succession planning 2. Focus on development and leave the long term management, and liability with others 3. Liquidity

G.P. Initiated, Continued Positives 1.Usually represented by professional who can manage the process and expectations…It is not closing in 30 days! Focus on critical path for those items that can be controlled 2.Some opportunities to add talented staff to your organization The institutional memory of projects and relationships with stakeholders

G.P. Initiated, Continued Negatives 1. The LP approval – The need to improve upon their current position, and settle up with the departing GP 2. Does the LP approval change the economics for the buyer, or seller? How to “adjust” and not renegotiate 3. Shuttle Diplomacy – Multiple party negotiations – Issuers, lenders, limited partner, non-profit partner…and your seller. 4. Pushing on a string – No control on timing; motivating the required consenting parties

G.P. Initiated, Continued Mechanics 1. Price allocations – Hot Assets (deferred developer fee) GP Interests, Are the receivables in the right place in the waterfall 2. Reinterpreting the Partnership Agreement; Are the receivables, really capital? Capital Accounts ROFO, or options 3. Cleansing the Balance Sheet Proration of expenses, CapEx requirements – whose dime? Controlling slippage, declining operations associated with protracted closings

General Partner Changes During the Compliance Period: Basil Rallis Director Cascade Affordable Housing Tax Credit Property Disposition 2008: Obligations and Opportunities Through Year 15 and Beyond Structuring General Partner Transfers and Secondary Market Sales