New Markets Tax Credits

Syndication/New Markets Tax Credits

The New Markets Tax Credit (“NMTC”) provides gap financing essential for commercial and mixed-use real estate and operating businesses that are economically unviable without the subsidy. Established in 2000, this innovative program supports projects that revitalize underserved urban and rural neighborhoods.

Evidencing the program’s success, in December 2015 Congress passed legislation extending the NMTC through 2019, permitting up to $3.5 billion in qualified equity investments for each of the 2015, 2016, 2017, 2018, and 2019 calendar years.

Blank Rome has been involved in the NMTC industry from its inception. Our NMTC team understands the policies that surround tax credits and can effectively structure our clients’ transactions to maximize subsidy benefits and meet or exceed their business goals. Further, our NMTC team regularly contributes at industry coalitions and national conferences, speaking on current issues in order to keep our clients in the know on the latest guidance and industry positions.

Our NMTC team:

  • represents investors, leveraged lenders, syndicators, community development entities (“CDE”), for-profit and nonprofit sponsors, and developers in creating investment and development strategies to achieve their community development and investment goals;
  • assists clients in structuring transactions that twin NMTCs with other tax incentives in mix-use commercial and residential developments; and
  • partners to advise our clients on creating and certifying CDEs and successfully applying for allocations of NMTCs from the Community Development Financial Institutions Fund of the United States Treasury (“CDFI”).

Select Representative Engagements

  • Represented a project sponsor in a $33.5 million mixed-use project in a medically-underserved low-income community in Brooklyn, New York.
  • Represented a project sponsor in a $9.8 million rehabilitation of a “green” building in New Haven, Connecticut.
  • Represented a new markets credit investor, historic tax credit investor, and CDE in a $20 million state and federal historic tax credit and NMTC financing of the historic Town Theatre in Baltimore, Maryland.
  • Represented a project sponsor in a $75 million charter school project in Crown Heights benefiting from grants from the local government and charitable organizations.
  • Represented a project sponsor in a $30 million commercial development in Wilmington, Delaware.
  • Represented an investor in the historic rehabilitation of the former American Can Company building in Cincinnati, Ohio, into a mixed-residential and commercial space.
  • Represented a project sponsor in a $13 million NMTC investment to fund the operation of an early childhood learning and development facility in Waterville, Maine.
  • Represented a project sponsor of the historic tax credit and NMTC-financed $53 million rehabilitation of the David Broderick Tower, the $86 million rehabilitation of the David Whitney Building, and the $35 million rehabilitation of the historic Griswold Lofts all in Detroit, Michigan.
  • Represented the lender, new markets credit investor, and CDE in the $26 million new markets credit financing of the Anacostia location of KIPP DC, a network of high-performing public college preparatory charter schools.

Experienced Attorneys, Recognized in Their Fields

Members of Blank Rome’s NMTC team are frequently invited to write and speak on tax and real estate issues at conferences such as the Novogradac Annual New Markets Tax Credit Conferences and CohnReznick’s Annual New Markets Tax Credit Summit and Conferences. Several attorneys serve as adjunct professors or lecturers at the Graduate Tax Program (LL.M.) of Georgetown University Law Center, George Washington University Law School, and the Real Estate Institute at Temple University. Further, members of Blank Rome’s tax credit team have published several books and articles on tax credits, including Tax Credits: Historic Boardwalk Guidance, Recommended Practices discussing recommended practices post issuance of Revenue Procedure 2014-12, 2014-3 I.R.B. 415 and “Joint Ventures Involving Tax-Exempt Organizations”.