How To Help With Historic Tax Credit

Transcription

1 Where to Get Credits in Today s Market Austin, Texas July 28, 2015 Ben A. Dupuy This document shall not constitute an offer to sell or the solicitation of any offer to buy securities... (202) bdupuy@enhancedcapital.com

2 Tax Credit Investment & Finance National investment and finance firm founded in 1999 Historic s o Direct buyer/investor o Proprietary federal and state historic tax credit funds o Active in Texas New Markets Tax Credits o NMTC allocatee at the federal and state levels o Multiple allocation awards, including $65M award in 2015 o Since 2013, closed 45 NMTC investments using $300M of federal and state allocation awarded to Enhanced CDE o Interested in Texas projects/businesses o Interested in operating companies, including those rehabilitating historic buildings

3 In 2013, Texas became the 35 th state to enact a historic rehabilitation tax credit

4 Texas now has one of the nation s strongest state historic credits

5 Key Commonalities Between the Texas Historic #1 Eligibility Both credits are eligible for use with historic structures, which are typically defined as buildings that are 50 years or older and are either listed individually on the National Register of Historic Places or are contributing structures to a district on the National Register of Historic Places.

6 Key Commonalities Between the Texas Historic #2 Uses Both credits can be taken on a wide variety of uses of historic structures, including LIHTC, market-rate apartments, mixed-use, hotels, retail, office, theater, schools, hospitals, etc. Neither credit can be used on owner-occupied housing, including condos.

7 Key Commonalities Between the Texas Historic #3 Process Both credits follow a similar three-part application process that starts with the Texas Historical Commission.

8 Key Commonalities Between the Texas Historic #4 Expenditures Both credits are based on the amount of Qualified Rehabilitation Expenditures a project incurs.

9 Key Commonalities Between the Texas Historic #5 Timing Both credits are earned once a project is placed in service.

10 Key Differences Between the Texas Historic #1 Percentage The Texas credit is 25% of Qualified Rehabilitation Expenditures. The Federal credit is 20% of Qualified Rehabilitation Expenditures.

11 Key Differences Between the Texas Historic #2 Threshold To be eligible for the Texas credit, a project must incur Qualified Rehabilitation Expenditures of at least $5,000. To be eligible for the Federal credit, a project must incur Qualified Rehabilitation Expenditures of at least the value of the structure.

12 Key Differences Between the Texas Historic #3 Transferability The Texas credit is transferable. The Federal credit is not transferable, so an investor must be a partner in the project in order to receive the federal credit.

13 Key Differences Between the Texas Historic #4 Offset The Texas credit is offsets the Texas Franchise/Margins Tax. The Federal credit offsets the Federal Income Tax.

14 Key Differences Between the Texas Historic #5 Non-Profits Non-profits may benefit from the Texas credit without special structuring. Non-profits may benefit from the Federal credit only after special structuring.

15 Texas Case Study With $2M in QREs State Credit Amount Qualified Rehabilitation Expenditures $2,000,000 State Credit Percentage 25% State Credit Amount: $500,000

16 Texas Case Study With $2M in QREs Federal Credit Amount Qualified Rehabilitation Expenditures: $2,000,000 Federal Credit Percentage: 20% Federal Credit Amount: $400,000

17 Texas Case Study With $2M in QREs Combined State & Federal Credits State Credit Amount: $500,000 Federal Credit Amount: $400,000 Combined State & Federal Credit Amount: $900,000

18 Enhanced is interested in talking with developers of historic buildings to determine if we can help with the Federal Historic Rehabilitation Tax Credit and/or the State Historic s.

19 Ben A. Dupuy, Director 201 St. Charles Avenue, Suite 3700 Enhanced Capital New Orleans, Louisiana (202) Ben A. Dupuy is a Director at Enhanced Capital, a national small business investment and tax credit finance company. He works in Enhanced s New Orleans office and is a member of the firm s national Tax Credit Finance Group. Enhanced s Tax Credit Finance Group is a specialty financier of state and federal tax credits throughout the United States. Enhanced was founded over 15 years ago, has investment offices in a dozen states, and has played an important role in a diverse portfolio of real estate developments and businesses throughout the nation. Enhanced works with developers and business owners to provide capital needed to finance job-creating projects facilitated by federal and state investment incentives such as Historic s, New Markets Tax Credits, and other tax credits. Enhanced utilizes its specialized tax credit investment expertise in a broad variety of project types, including mixed-use developments, hotels, apartments, retail, office, fresh foods markets, manufacturing, social services, theaters, schools, health care, and others. Enhanced also helps developers and business owners access capital for job-creating projects in economically distressed urban and rural areas of the United States. Mr. Dupuy leads efforts to expand business opportunities and develop new relationships for Enhanced. In 2013, Mr. Dupuy led the successful advocacy effort to create the Texas Historic. In 2013 and 2015, he led successful advocacy efforts to reauthorize the Louisiana Historic. Mr. Dupuy also launched the effort that succeeded in expanding the Georgia Historic in Previously, Mr. Dupuy was on the staff of a member of the U.S. Senate and was later a partner at a firm in Washington, DC where he led efforts on real estate development, economic development policy, tax policy, and financial services policy Mr. Dupuy graduated from the University of Virginia with a B.A. in American Government and studied Real Estate Finance at Georgetown University. He and his family live in New Orleans, where he is a member of the board of directors of the Preservation Resource Center of New Orleans and a member of board of directors of the Louisiana Museum Foundation.