New Markets Tax Credit
The New Markets Tax Credit (NMTC) is an innovative and effective tool used to finance projects in low-income communities through a specially formed Community Development Entity (CDE), the sole recipient eligible for allocation of this distinct tax credit. Active since the NMTC was established by Congress in 2000, our practice is focused on the formation of CDEs, their application for allocation of NMTCs, and the crafting of appropriate financing structures. Our goal is for our clients to succeed in maximizing the value of NMTCs in all types of transactions.
We represent financial services institutions, nonprofit organizations, state and local governmental and quasi-governmental agencies and authorities, developers, owners, and operators. We counsel tax credit investors, leveraged lenders, participating lenders, private equity investment funds, community development entities, and qualified low-income community businesses.
Our multidisciplinary team:
Evaluates eligibility, assesses potential benefits, and mitigates risks
Forms, certifies, and quantifies community development entities
Prepares, reviews, and files allocation applications and assists with regulatory filings
Structures, negotiates, documents, and closes financing transactions, including direct investments, leveraged financings, blind pools, and syndications
Counsels in the event of recapture, default, foreclosure, refinancing, and workouts
We have experience combining NMTCs with other tax credits and financing sources, such as historic rehabilitation tax credits, energy tax credits and incentives, state and local tax credits, grants and subsidized loans, tax-exempt bond financing, American Recovery and Reinvestment Act funds, Tax Increment Financing, Community Development Block Grant funds, federal government agency loan guarantees, and conventional financing.
Our experience includes financing and refinancing acquisition, construction, renovation, redevelopment, rehabilitation, and/or conversion of a:
- Manufacturing facility for production of solar modules and receivers
- Historic theater
- Public school and public charter school facilities