Clocktower Tax Credits, LLC assisted the Brewster and Mary Hosmer Apartment rehabilitations in Freeport, Illinois.  The two buildings closed financing simultaneously at the end of 2016, and are scheduled to be re-opened to tenants after a 12-month construction period.  Once finished, the two buildings will combine to improve 167 units of affordable rental housing in northern Illinois.  The two towers were originally built in 1965 and 1971, respectively, and were in dire need of upgrades to the apartments and common area facilities for its low-income tenants.  The rehabilitations included kitchen layout reconfigurations, new cabinets, fixtures, flooring, tenant storage areas, fire code and disability compliance upgrades, and structural modernizations.

The project received numerous incentives from the Illinois Housing Development Authority, including Federal Low-Income Housing Tax Credits, Illinois Affordable Housing Tax Credits, Tax Exempt Bonds, and a Risk Share Loan, to incentivize private developers to conduct the rehabilitations.  Through our past experience in working with Brinshore Development, L.L.C., a real estate development firm working in the market-rate and affordable spheres in the Midwest, Clocktower helped the project by monetizing $3,600,000 in Illinois tax credits through a Fortune 500 company, providing millions of dollars of equity that ultimately bettered the Freeport community.

Clocktower has worked with over a dozen Affordable Housing developments over the past three years, and has brokered over fifty million dollars of both Federal and State Low-Income Tax Credits to low-income Housing projects nationwide in our firm’s history.  We understand the deadlines and program specifics of all State and Federal Low-Income Housing Tax Credit programs, and assist developments in their Tax Credit equity closing process.  Our expertise in sourcing either equity partners for non-transferrable Tax Credits or buyers for certificated transferrable Tax Credits has afforded us the opportunity to help community-oriented projects of all kinds.

The report can be viewed online at http://www.journalstandard.com/news/20170224/freeport-housing-authoritys-brewster-and-hosmer-20m-apartment-renovations-underway.  For more information, please contact David Curtis at (978) 440-0742 or DCurtis@clocktowertc.com.

Clocktower Tax Credits is proud to help finance projects that make a significant impact on a community.  One in particular is Howard House, a historic renovation and adaptive re-use of the former Howard Home located on the Brockton VA Medical Center in Brockton, MA.  Clocktower brokered the sale of $1,000,000 in Massachusetts Historic Rehabilitation tax credits, providing equity necessary to finance this important project.

The home was transformed into a permanent supportive housing community for formerly homeless Veterans.  The residence features fourteen, fully furnished efficiency apartments along with community space.  Supportive services will be available to residents to increase their economic self-sufficiency and well-being.  Veterans who want to stay at the Howard House sign a lease and pay 30% of their income for rent, receiving subsidies for the balance.  The residents are welcome to stay there as long as it’s beneficial to their well-being.

The project is one in a series of developments initiated by the US Veterans Administration to use the campus of VA Hospitals nationwide to provide housing at the same location where there is a Veterans healthcare facility.  The former Howard Home for the Aged provided a natural opportunity to convert this underutilized office facility into much needed housing, giving residents easy access to services and medical care.  The VA and its partners have made a major effort over the past five years to end homelessness for Veterans and as a result, they have reduced the number of homeless Veterans by half.

This project is the result of a successful public private partnership in Massachusetts to create affordable housing for Veterans.  Kudos to the developers who made this project happen: Affordable Housing and Services Collaborative, Inc., Peabody Properties, Inc. and Windover Construction, LLC.

For more information, please contact Sue Ellyn Idelson at (978) 793-9574 or Sidelson@clocktowertc.com.

The National Park Service (NPS) recently released a report entitled “Federal Tax Incentives for Rehabilitating Historic Buildings, Annual Report for Fiscal Year 2014.” Featured on the cover is a project we know well, The Arcade, located in Providence, Rhode Island. Clocktower placed the Arcade’s Rhode Island state historic tax credits with two of its investors, raising over $1.5 million for the project.

The developer, Granoff Associates, converted the nation’s first indoor mall, built in 1828, into first floor retail space and 48 rental apartments, 38 of which are considered “micro-apartments”. The Arcade’s micro-apartments are the first of their kind in Providence, following a trend seen in Boston and New York of downsizing units to attract millennials who only require the bare essentials in a living space, at an affordable rent.

The Arcade was one of 762 historic projects certified by NPS last year. Those projects accounted for $4.32 billion in rehabilitation work and created 77,762 jobs. It’s no wonder the Federal Historic Tax Credit is considered one the nation’s best drivers of economic growth.

The report also highlights the benefits of “piggy-backing” state historic tax credits with the federal historic tax credit. State historic credits are now available in over thirty states. They come in many shapes and sizes, but all are useful incentives, and are frequently the difference between a project getting the green light or remaining on the drawing board.

We congratulate the Granoff Associates team on a visionary project, and on the honor of being featured in the NPS Historic Credit Annual Report. The report can be viewed online at http://www.nps.gov/tps/tax-incentives/reports.htm. If you are interested in learning more about how state or federal tax credits can benefit your historic renovation, please contact us for more information.

Film producers have a number of options when it comes to selling their State Film/Digital Media production tax credits.  They can market their tax credits anytime along the continuum of pre-production, production or post-production, or once they have their tax credit certificates in hand, issued by the state Film Office.  As national brokers of such credits, Clocktower has tried all of these approaches, feeling at times like Goldilocks tasting the porridge.  We have found that the best time to market the credits is during pre-production, but after the producer has the cast and crew in place, most or all of the financing committed, and a pre-qualification from the Film Office.

If you try to market your tax credits too soon, there’s a chance that the production may not complete, and the credits may not be available to sell.  In a typical purchase agreement, an investor agrees to buy a producer’s tax credits if and when the tax credits are available to transfer.  No money changes hands until the transfer occurs.  There is usually no penalty incurred by the producer if he or she fails to generate any credits at all.   However, there is a loss of goodwill between the parties.  The investor may have been anticipating its receipt of the tax credits, and reduced its estimated tax payments accordingly.  So the investor may incur interest and penalty charges from the state Treasury Department if it under-paid its taxes.  Bottom line, it’s best to be sure the tax credits will materialize before contracting for their sale.

Conversely, selling the tax credits too late may have financial consequences as well.  Once a producer has his or her tax credits in hand, there is a rush and a need to sell them quickly to bring in much-needed cash.  This may not leave enough time to widely market the tax credits to ensure the best price, or the best terms of sale.  At certain times of the year (usually related to quarterly or annual tax filings) it is more difficult to get an investor’s attention, so frustration can build as time passes.  Finally, depending on an investor’s fiscal year, the credits may appear after the investor has paid its tax in full for the year through quarterly tax payments, and thus the tax credits are less attractive to the investor at that time.

So the solution is to market the tax credits once there is 90% certainty that the production will film and the credits will be issued.  This would mean cast and crew are in place, all financing committed, and the production pre-qualified by the state film office.  At that point, Clocktower will have ample time (30-60 days) to market the tax credits to qualified purchasers.  There is time to negotiate price and draft, review, and execute a purchase agreement for the credits.  This agreement will then provide for the purely administrative step of wiring funds to a pre-determined bank account when the tax credits are transferred to the purchaser.  Best terms, highest price, fastest payment are all “just right” – the Goldilocks solution!

The Venture Will Bring Guaranteed Energy Savings to Mass. Affordable Housing Owners

Maynard, MA: Today, Clocktower Tax Credits, LLC announced a venture with LodeStar Energy, LLC to offer Solar Net Metering Credits to affordable housing sponsors in Massachusetts. The Net Metering program provides significant, guaranteed savings to owners and managers of affordable housing on their electricity bill. Housing owners contract with LodeStar to purchase the solar energy generated by Lodestar at a substantial discount to the price paid to the utility for conventional electricity. Participation in the program requires no upfront cost, no ownership of the solar development and no change in the way electricity is delivered to the housing development. The initial phase of the venture is for UNITIL and NGRID-WCMA customers, and may expand to other electricity service territories.

Clocktower President Jeff Jacobson said of the announcement, “I’ve worked in the affordable housing community for over 20 years and know the vital role it plays in the state. We’re excited to offer the Net Metering program and associated cost savings to the housing developments which need it most.” Jeff Macel, President of LodeStar, added, “The Net Metering program offers affordable housing sponsors the opportunity to promote environmental protection and save money while doing so. It’s a no-brainer. ”

Any for-profit or non-profit organization in the UNITIL or NGRID-WCMA service area which has received state or federal support for an affordable housing project is eligible to participate in the first phase of the Clocktower-LodeStar venture. The Net Metering program provides a state subsidy authorized under M.G.L. Chapter 25, Section 11F. All renewable energy installations are done offsite from the housing development and within the housing development’s utility provider’s footprint. For more information, please contact Jeff Jacobson at (978) 823-0200 or jjacobson@clocktowertc.com.