The partial government shutdown that took place in December and January has had far-reaching effects outside of the ever-increasing political divide in Washington. Among the group of temporarily shut down government entities is the National Park Service, whose continuous review and approval of prospective historic rehabilitations is required to generate Federal Historic Tax Credits. The slowdown has led to no Parts 1, 2, or 3 approvals, leaving projects currently in-progress at a standstill awaiting feedback to ensure the receipt of Tax Credits. Additionally, new projects applying to the NPS have not been able to submit preliminary documentation, leading to uncertainty once the organization is up and running as to where the initial focus will be. This has impacted historic work throughout the country, with the risk-averse development community not wanting to invest capital into projects, only to have the work ultimately rejected.
Moreover, the shutdown also impacts projects nationwide which are using grants or loans from HUD or other government agencies. The uncertainty persists regarding Housing and Urban Development’s availability during the shutdown, and its efficiency in underwriting upcoming opportunities. The limited staff and resources has led to a focus on crucial current housing situations, such as renewals of expired HAP contracts during the shutdown. This could delay construction schedules for months as HUD restarts many processes to provide loans directly or through affiliated partners.
The current political battle continues without an end in sight, with fears of another full prolonged shutdown after a temporary re-opening agreed to by President Trump. Before the matter is fully resolved in Washington, the situation for the historic development community is unsettled, without any certainty of the availability and efficiency of vital parts of developers’ capital stacks.
Clocktower Tax Credits, LLC has the expertise and experience to provide up-to-date information on short-term uncertainty and planning prospects around government hurdles. Please contact Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com, and David Curtis (978) 440-0742 or DCurtis@ClocktowerTC.com, to discuss where your project stands and how we can help navigate the current murky waters in Washington to produce a successful Tax Credit investment during unstable times.