1. 1 USBancorp Community Development Corporation New Markets Tax Credits: Creating Economic Opportunities in the Gulf Opportunity Zone IPED March 30, 2007 Jennifer Westerbeck NMTC and HTC Investments 703.740.5600 Jennifer.westerbeck@usbank.com

2. 2 About US Bancorp USB CDC is a wholly owned subsidiary of USBank; USB CDC makes equity investments in low- income housing, historic and new markets tax credit projects; USB CDC is a business unit headquartered in St. Louis; and USB CDC has offices in DC, Los Angeles, Kansas City, Minneapolis, Denver.

3. 3 USB CDCs Experience USB CDC has worked with over 55 CDEs. USB CDCs investments have resulted in over $2.15 billion in QEIs in over 150 transactions. Projects have been in more than 25 cities, 18 states and the District. Portfolio of over $4.2 billion in LIHTC, HTC & NMTC investments.

4. 4 Real Estate Transaction Types Leased and Owner- Occupied Facilities Office Retail/Office Mixed-use with Housing – 20/80 Requirement Entertainment/Theater Hotel Non-Profit Industrial Manufacturing For-Sale Housing Single Family Homes Condos Redeployment Issues Recapture if capital not deployed Operating Businesses

5. 5 USB CDCs Experience – Structures Leveraged model with third party debt (hard or soft or developer equity as a loan) Leveraged model with both USB CDC and USBNA as equity & debt Loan Pools NMTC/HTC twinned HUD, SBA Multiple or Single QEIs

6. 6 GO Zone Transactions

7. 7 Case Study: St. Charles Hilton Project Info: Developer: Dimension Development Company –For-profit developer Location: New Orleans, LA TDC: $35 mm Redevelopment of existing hotel damaged by Katrina –An historic Masonic building built in 1926 –250-room hotel –500-seat theater –100 parking spaces Investment: $6.1 mm in NMTC equity New Markets Tax Credits –$30.5 mm allocation –GO Zone allocation from Urban Development Fund/Aries Capital Loan terms to QALICB –7 year term, Interest rate only –Higher than standard LTV, below market interest rate, debt with equity features, subordinated debt, lower than standard origination fees, and loan loss reserve requirements that are less than standard

8. 8 Case Study: St. Charles Hilton Community Impact Info: GO Zone, a HUB Zone, an area with unemployment greater than 1.5 times the national average, has a 43% poverty rate and a MFI is 84.2% of area median income Expected to create over 100 new full-time jobs Stimulate further development by creating jobs and temporary housing for workers, as well as bringing vital tourism revenue back to the area Building was closed in the 1960s & remained vacant for over 30 years until it was acquired & converted into a hotel in 2002 Closed again following Hurricane Katrina when the first floor and basement were flooded destroying the principal operating equipment and causing the upper floors of the building to sustain damage from the damp conditions

9. 9 Case Study: St. Charles Hilton NMTC Need: Faced a number of hardships, including: the high cost of rehabilitation, the unwillingness of most institutional investors to lend or invest in the New Orleans hotel market since Katrina, scarcity of labor and materials, decreased local capacity for building permits and approvals, and a general apprehension about the future of New Orleans and its tourism industry. Most lenders and investors are concerned about the hotel market in New Orleans, and are unwilling to lend or invest at any rate. The higher loan-to-value and lower interest rate required by the St. Charles Hilton would not have been available from conventional lenders.

10. 10 Challenges Need to focustoo many potential deals that might not be viable The basics are still required for closing, but are missing in many deals Lots of eager investors and CDEs, but need to push projects over the finish line Lenders still not fully comfortable taking long term risk in the region NMTCs are needed just to cover increased costs overall 25% more for construction, insurance, etc. Lack of housing a problem for attracting workers

11. 11 Moving Forward Pipeline is focused on strengths and anchors in the market –Tourism, Hospitality, Hospitals, Universities, Film, Manufacturing Trying to build up commercial and housing Building partnerships with local CDEs, developers, attorneys, consultants Many state resources, but need to figure out how to utilize them –GO Zone bonds, state credits, greater HTCs and depreciation