McCrory Senior Apartments, a 62-unit elderly apartment complex developed by Brinshore Development in the Near West Side of Chicago, recently won an award at the Illinois Governor’s Conference in February for it’s creative financing structure allowing multiple donations to the project.  These donations were able to make the project viable by generating additional financing in addition to an increased award of Illinois Affordable Housing Tax Credits (IAHTC), which are issued by the state based on donations to low-income housing developments.  Clocktower Tax Credits procured the Tax Credit buyer for the transaction, providing the project with equity for construction.  The development was able to proceed and is now fully built and operational, providing community spaces and independent living apartments for senior tenants in a central area of the city.

Clocktower is committed to aiding the development of affordable housing in the greater Chicago area and in the rest of the state of Illinois, providing IAHTC equity for projects across the Land of Lincoln.  We work with experienced Tax Credit buyers, who, paired with Clocktower’s expertise in the IAHTC program’s nuances and closing process, have helped dozens of projects secure vital equity for construction of low-income developments.  For any help and feedback on prospective low-income housing-based development opportunities in Illinois, please contact David Curtis at (978) 440-0742 or DCurtis@ClocktowerTC.com.

In April, Hawaii’s state legislature approved the creation of a new statewide Historic Tax Credit, helping provide an additional layer of financial support to historic preservation in the state, along with the Federal Historic Tax Credit.  The program is set to begin in July, providing a 25% Income Tax Credit against costs incurred during the rehabilitation in accordance with Historic standards administered by the state historic preservation office.  The program also includes a 30% Tax Credit if the final project includes a 20% portion of affordable rental housing or 10% affordable housing sales to local tenants.  Combined with Federal Tax Credits, this can provide Tax Credits against half of all qualifying historic rehabilitation costs!

Clocktower Tax Credits, LLC has a diverse pool of state Tax Credit investors, including those with an appetite for the new Hawaii program, in addition to our deep Federal Historic Tax Credit Investor base.  With Clocktower’s expertise in both Historic programs’ quirks and necessary steps for a successful closing, we have the ability to help any historic rehabilitations in Hawaii fully reap the benefits of the new landscape for historic preservation in Hawaii.  For any prospective opportunities seeking Hawaii and Federal Historic Tax Credit equity in the Aloha State, please contact David Curtis at (978) 440-0742 or DCurtis@ClocktowerTC.com.

Clocktower Tax Credits is now working in conjunction with select lenders to offer unique loans to both Tax Credit and non-Tax Credit Projects alike. 

Are you a building owner or developer making energy upgrades to your building?  Are you installing renewable energy products in your building?  Are you thinking about updating your building’s lighting, HVAC, or elevator?  If you are, then you are eligible for PACE financing!  Almost every new construction or renovation project qualifies.

Did you know you can reduce the amount of equity in your project with PACE financing?  And did you know the loan payback stays with the building while the tenants of the building pay back the loan through taxes?

How does it Work?

PACE is a national initiative, but programs are established both statewide and locally.  Individual municipalities may opt into PACE by a majority vote of the city or town governance.

To finance improvements, a property owner agrees to a betterment assessment (increased property tax) on their property, which repays the financing.  This allows the property owner to undertake more comprehensive energy upgrades with longer payback periods of up to 20 years.  At property sale, the lien stays with the property and is transferred to subsequent property owners.

What’s the Benefit?

Property owners can obtain low cost, non-recourse, upfront, long term, potentially off-balance sheet financing that remains with the property if sold.  Capital improvements should reduce operating costs through increased energy efficiency, renewable energy and water conservation projects.  Any upgrades done to a property should increase property value that will ultimately improve your financial return!

Clocktower has partnered with several lenders that specialize in PACE Financing.  We have seen how our clients fill equity gaps in their projects’ development capital stack.  It has worked perfectly with historic tax credit projects.

How can I get PACE? 

If your state has passed a PACE statute, you are in luck!  If not, stay tuned, it might be coming soon.  As of April 2019, the states with active PACE programs are: AK, CA, CO CT, DC, FL, KY, MD, MI, MN, MO, NH, NJ, NY, OH, OR, RI, TX, UT, VA, WI.

For more information please contact us at Clocktower Tax Credits … we will hook you up!

Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com.

Film producers and industry professionals across the Commonwealth of Massachusetts, and across the country for that matter, are pushing the state legislature to remove the sunset date for Massachusetts Film Tax Credits.  Over the years, supporters of the film tax credit have defended the program by extending the sunset date to subsequent years, effectively keeping the program alive to sustain the 25% tax credit on eligible production expenses in the state.  While this defensive strategy has worked in the past, supporters are now going on the offensive and pushing for a permanent removal of the sunset date.

The removal of the sunset date would keep the well-functioning film tax credit incentive in place, and give assurance to current and future filmmakers that they can continue to operate business as normal in the state.  Opponents raise the issue that the film tax credit does not create enough jobs relative to the cost, while supporters argue that it keeps an industry stable and creates positive externalities such as infrastructure (New England Studios, for example) that are not directly accounted for in the film tax credit analysis.  Regardless of supporter or opponent momentum, expect more political lobbying and activity throughout the Commonwealth.

Traditionally, the Massachusetts Production Coalition (MPC) orchestrated lobbying efforts among industry supporters to extend the credit. Now the MPC is taking a more proactive approach instead of reacting to opponents’ proposals.  MPC is supporting House Docket 388, filed by Representative Tackey Chan and Senate Docket 424, filed by Senator Michael Moore, to eliminate the 2022 sunset date.  The goal of the MPC is to create enough industry buzz to add additional cosponsors to the bill, which will ultimately result in the Governor signing the bill into law.

Clocktower Tax Credits, LLC, supports the elimination of the sunset.  Since 2010, Clocktower has helped dozens of Massachusetts filmmakers finance their films by selling their film tax credits to taxpayers across the Commonwealth.  Nathan Howe works with producers and can be reached at (978) 460-4244 or NHowe@ClocktowerTC.com.

Its been about 13 months since the issuance of the 2017 Tax Cuts and Jobs Act transformed the 1-year Federal Historic Rehabilitation tax credit into a 5-year credit.  While the credit had always vested over a 5-year period, under the new law the credit itself is to be taken and used by the investor ratably over a five-year period of time, beginning with the year the building was placed into service.  While the industry was thrilled that the credit itself was pulled from the trash bin under some proposed legislation, the negative impact on the investor equity marketplace was foreshadowed.  Coupled with the reduction in the federal corporate tax rate from 35% to 21%, and the creation of the Base Erosion and Anti-Abuse Tax, it appeared that a slowdown in investment activity, and the pricing in the equity marketplace, was inevitable.

While some of these effects have been felt, the results have been muted.  The impact of the extension of the credit to five years has been delayed due as projects grandfathered as 1-year credits under the transition rules have dominated the closing agendas of most corporate investors.  Up through Fall 2018, most investors would not even quote pricing on 5-year projects; their pipelines were full of projects hastened to close before the new rules took effect.  And there was a wait-and-see attitude pervasive among most investors; each wanted to see how its competitors were pricing this revised credit.

By early winter, most investors were seeing a stream of 5-year credit projects, and have stepped up to provide active proposals with competitive price quotes.  While early pricing reflected the predicted 10-15 cent per dollar drop in pricing, the marketplace quickly reflected the spate of investors jumping back in, and investors began sharpening their pencils.  We are now seeing pricing in the low $0.80s per dollar of credit, reflecting a reduction of only 6-10 cents from the levels quoted for 1-year credits.

Under the new rules, investors are only building up a cache of tax credits at one-fifth of the previous rate.  That is, an investor with an appetite of $50 million in 2019 tax credits can’t simply invest in $250 million in Qualified Rehabilitation Expenses (QREs) this year; rather, they’d have to invest in over $1 billion in QREs to reach their tax credit target.  Thus, investors are needing to invest in more projects in the next few years, but fewer projects in the succeeding years once they have built a stream of 5-year credits.  So the best timing is RIGHT NOW to bring a historic tax credit development opportunity to market.  Clocktower stands ready and able to help developers do just that.  Please contact Jeff Jacobson at (978) 823-0200 or JJacobson@ClocktowerTC.com to discuss your opportunities.