The tax credit marketplace is beginning to feel the impact of COVID-19 and the resultant business slowdowns.  While several credit investors and syndicators are slowing down or limiting their purchases, a good number of them are conducting “business as usual”.  We want to stress that most tax credits can still be sold into this marketplace.

Here are a number of quotes from our investor clients whose tax credit activity may be slowed:

“Better that we cut our credit amount in half.  Our income is dropping like a stone”

“indefinite pause on hospitality investments”

“give me about a month to see if our projections will be ok”

“All the banks are closing what’s in the pipeline, but putting the brakes on all new business”

“The market was overheated prior to COVID.  Every 10 years or so the market resets.”

“We’re still moving forward.  We’ve received no direction to slow down our acquisitions.”

“Until we get a handle on revised [tax] projections we’re taking a pause on new purchases. I think we’ll be able to resume in the June/July time-frame.”

“Can’t issue a term sheet on hospitality now”

“We have developers pulling out of deals.  Residential projects trying to get a loan right now – forget about it!”

“The pandemic has definitely impacted our business a bit. We are currently treading lightly in the area of credits due to the fact that our liabilities may be decreasing some this year in light of the pandemic.

“Currently, we are not entering into any new credit deals until we know how our premium volumes are going to shake out with the pandemic going on.”

However, as noted earlier, Clocktower Tax Credits works with dozens of Fortune 1000 Corporations, Banks, and Insurance Companies.  The advantage of using a tax credit broker to sell a credit is the wide array of buyers in the broker’s contact base.  Clocktower closed 10 separate tax credit sales in April 2020, to a range of buyers including three different insurance companies, two Fortune 500 corporations, and a medium-sized private company.  We are working to fulfill the “buy” orders of many clients still seeking to reduce their projected tax liabilities now, and for up to five years in the future.

We hope this has provided a sample of tax credit buyer responses – which vary from “out of the market” to “full steam ahead”.  Clocktower remains at full capacity, with our staff working remotely to complete tax credit transactions.  For further information on the current marketplace, call President Jeff Jacobson at (978) 823-0200, or email him at JJacobson@ClocktowerTC.com.

In January, Clocktower attended the groundbreaking ceremony for the rehabilitation of the former Ravenswood Hospital in Chicago.  The project entails the adaptive reuse of the abandoned hospital to create 193 units of affordable housing for senior tenants.  The site will have apartments focused on independent living and assisted living under the Illinois Supportive Housing program, which will each have their own entrances and communal spaces.

“This important project is a rare opportunity to bring much-needed affordable senior housing to Chicago’s North Side while establishing a viable financing model that can be applied to future senior developments across the country, especially as the population continues to age,” Jeff Rappin, the chairman of Evergreen, said at the ceremony.  Clocktower Tax Credits facilitated the sale of the project’s state Donation Tax Credit through our buyer at the financial closing, providing a key source of financing available for the upcoming construction phase.

Clocktower is busy in Illinois with the Donation Tax Credit program, having facilitating dozens of transfers for the Illinois affordable housing community.  Clocktower’s expertise in the quirks of the program and closing/transfer process has allowed us to serve Donation Tax Credits of any size and availability, along with the new Historic and River’s Edge programs.  For developers with any prospective opportunities seeking Illinois tax credit equity of any kind, please contact David Curtis at (978) 440-0742 or DCurtis@ClocktowerTC.com.

Worcester, Massachusetts – Housing Development Incentive Program (HDIP)

Who knew when I contacted the principals of Kelley Square Lofts and the Worcester Public Market in 2017 to help them with their Housing Development Incentive Program (HDIP) tax credit financing, that this project would be neighbors with the new Worcester Red Sox “WooSox” Minor League headquarters and stadium dubbed Polar Park?  The location in famous Kelley Square, for people familiar with Worcester, is known for the City’s most dangerous intersections.  The visionaries of Kelley Square Lofts and Worcester Public Market knew there was much to be done to improve the area, called the Canal District, before Polar Park was even imagined.  The idea that they could create 48 market-rate apartments above a 20,000 square foot European-style multi-vendor marketplace has created a destination, right in Kelley Square, and fits right in with the resurgence of enthusiasm for urban living.  So what will happen to this infamous intersection?  The city has embarked on the Kelley Square Improvement Project that will address the safety and operational deficiencies currently faced by all users, expected to be substantially completed by November 2020.  Just in time for the WooSox to open their doors and for WooSox fans to stop by the Worcester Public Market to visit Wachusett Brewing Co., the anchor tenant, on their way to the ballgame – along with 30+ other local vendors and food purveyors!

Clocktower Tax Credits, LLC has a deep base of national Tax Credit investors who desire to reduce their tax payments to government while providing funds instead to economic development projects like the Worcester Public Market.  With Clocktower’s expertise in HDIP credits, we understand the necessary steps for a successful financial closing, and we have the ability to help any economic development incentivized tax credit project.  For developers with prospective HDIP, Historic rehab or Low-Income Housing tax credit projects seeking Federal and/or State Historic tax credit equity, please contact Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com.

As the new decade begins, Clocktower Tax Credits embarks on its 10^th year of operations as one of the nation’s leading brokers of State and Federal Tax Credits.  Clocktower opened its doors in July 2010, as the nation was heading out of recession, and corporate profits were scarce.  Developers and producers earning tax credits needed to find new buyers and investors who could use the tax credits efficiently, and pay a sufficient price such that their projects remained economically feasible.  Hence, Clocktower was born to fill that need!

From the six tax credit transactions closed in 2010 to the sixty-three transactions closed in 2019, Clocktower has raised over $450 million dollars in tax credit equity, and contributed to the development and production of over $2 billion in real estate, renewable energy, and motion picture/digital media projects.  “Each of our transactions is a Win-Win-Win deal,” said President and Founder Jeff Jacobson.  “The developer wins by completing its project, the investor wins by saving on its taxes, and the tax credit agency wins by seeing its public policy fulfilled through the completion of a project not otherwise achievable.”

Clocktower continues to mine the nation for tax credits, covering about 75 different tax credit programs, with new ones becoming available every month.  “While we occasionally see a tax credit program paused or discontinued, we have states approving new economic development programs every legislative cycle,” Jacobson said.  Acquisition Associates Sue Ellyn Idelson and David Curtis research these new programs and reach out to program participants to offer their services, creating new opportunities to save corporate taxes while proving out the efficacy of these new programs.  “With $50 million in new annual State Historic Tax Credits available starting in 2021, California is a perfect example of a new program designed around tax credit incentives,” Curtis noted.  “Clocktower has the knowledge and experience to find the right buyers for these emerging programs.”

Jacobson reflects on his almost three decades in the tax credit industry, and is more excited than ever to celebrate Clocktower’s tenth year in business.  “We must be scoring well on search engines, as more developers searching for “Tax Credit Buyers or Brokers” are calling us to help them raise money,” he said.  Even after almost a thousand closings, he looks forward to helping all the parties “win” on the very next transaction.  Tax credit sellers should contact Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com or David Curtis (978) 440-0742 or DCurtis@ClocktowerTC.com, with details on their upcoming projects.

The grand opening of the affordable housing apartment building at 98 Essex Street is a major accomplishment for the city of Haverhill, Massachusetts, located north of Boston.  This is a great start to filling the need for affordable housing in the city, a major issue that many cities are encountering in the Commonwealth and across the country.  Affordable Housing and Services Collaborative, Inc. re-purposed the former Shoe and Leather building in Haverhill’s historic district into 62 affordable and workforce apartments.  Offered for rent are a mix of 15 one-bedroom, 41 two-bedroom and six three-bedroom apartments.  Ten percent of units are restricted to those earning 30% or less of the area’s median income.  These apartments are available to homeless families through a partnership with New Lease for Homeless Families, an organization that connects property owners with families in need.

The eight-story building includes a community lounge, children’s playroom, fitness center, laundry room and on-site management.  The development financing was achieved with a combination of state and federal grants, private construction financing and both federal and state Low-Income Housing Tax Credits (LIHTC) and Historic Tax Credits (HTC).  Clocktower Tax Credits, LLC procured the tax credit buyers for the LIHTC and HTC state credit transactions, providing $6 million of much needed equity for construction.

Clocktower is committed to aiding the development of affordable housing and historic rehabilitation in Massachusetts and many other states across the country.  We work with experienced Tax Credit buyers who have helped dozens of projects secure vital equity for construction of low-income and adaptive re-use development projects.  For information on how we can assist with the financing of your project, please contact Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com.