1. New Market Tax Credits Introduction

2. Who Has NMTCs CDE’s seek eligible projects that have a financing gap
A CDE is a mission driven for profit company approved by the Treasury that invests in projects that have a strong community impact
CDE’s have a specific investment footprint that range from City specific to national
CDEs select the type of projects they will specialize in

3. Benefit to project
NMTCs provide between 17%-19% net equity to a project
NMTC equity is in the form of an interest-only loan for 7 years
Loan can be converted to equity after compliance period
Increases amount of borrower equity

4. Total Project Cost
$10,000,000
Tax Credit Percentage Per Regs
39%
Gross Tax Credits
$3,900,000
Tax Credit Price
$.80
Gross Tax Credit Equity to Project
$3,120,000
CDE 3%
$300,000
Legal/Accounting/Modeling
$200,000
Total “Equity” at Closing
$2,620,000
Total Soft Loan
$2,620,000
Estimated Cost of Capital Annually = 80 bps
$80,000
Total Cost of Capital
$560,000
Tax Returns and Audits
$70,000
Net Net Benefit
$1,990,000

5. Parameters of projects
Projects must be located in distressed or highly distressed census tracts
20% poverty (30% Poverty for Highly Distressed*)
Median family income below 80% AMI
High migration rural county, median family income below 85% of statewide median income
Typical project minimum size is $5 million

7. Project impacts
Creating quality living wage jobs in low-income communities
5-10 jobs per $1mm of allocation
Assisting minority, women-owned and low-income community businesses
Offering flexible or below market lease rates to tenant businesses
Providing goods and services in low-income areas
Improving access to healthy and affordable food options
Improving environmental sustainability
Pioneering developments that will catalyze additional private investments in the community
Public/Private partnerships

8. Common Projects Commercial offices and retail Mixed-used properties
Factories and industrial/manufacturing facilities
Community centers
Educational facilities
Health-related facilities – FQHCs, CAHs

9. Challenge to Lenders No direct mortgage
Lender has a pledge of the investment fund’s interest in the sub-CDE
7 year forbearance
NMTCs must be continuously investor for 7 years
Reinvestment risk
7 year term

10. Rooks County Health Center

11. Rooks County Health Center
Located in Plainville, KS
Population 3,028, 11.4% Poverty, Tract Income of AMI 77.4%
Rural Designation
Critical Access Hospital Serving 5 Counties

12. Project Construct a 3 phase expansion Nuclear medical suite
Physical therapy and outpatient services
Renovate interior

13. Sources and Uses
$1,300,000 Capital Campaign $7,000,000 USDA Direct Loan $2,590,380 NMTC Equity -$1,154,900 Fees and 7 year cost of capital $9,735,480

14. Contact information
Chris Vukas Director of Economic Development Sunflower Development Group/ Sunflower Community Investments 1520 Grand Boulevard, Floor 2 Kansas City, MO