Tax Credit Finance

Overview

"Every individual I have met at Blank Rome is impressive. They are strong in all areas. They are my first choice as counsel and will remain so.”

 Client feedback, Chambers USA

Tax credit programs, such as the Low-Income Housing Tax Credit (“LIHTC”), New Markets Tax Credit (“NMTC”), Historic Rehabilitation Tax Credit (“HRTC”), and Renewable Energy Tax Credit (“RETC”), provide critical gap financing for developing underserved communities, historic rehabilitation, low-income housing, and clean energy. These transactions often involve multiple layers of debt and equity that present challenging business, tax, and real estate issues. In order to get your project off the ground, you need legal counsel with deep experience in the industry.

Blank Rome’s tax credit finance attorneys provide legal advice informed by understanding the larger context of your business. Not only do we know the law, but we’re active in key national conferences, industry coalitions, and advocacy groups. This helps us anticipate the steps needed to achieve your business goals and the potential obstacles you may face. Our approach allows us to guide investors, community development entities (“CDEs”), syndicators, lenders, and for-profit and nonprofit sponsors to effectively utilize the appropriate suite of tax credit incentives to meet their needs.

Our tax credit finance attorneys monitor the latest innovations in tax structuring, modeling, and documentation, including the evolving use of the master lease structure for investment tax credit projects, and the combination of HRTC with NMTC, LIHTC, RETC, and other federal and state incentives. We help clients draft, review, and negotiate partnership and operating agreements for ownership entities; tax and general real estate opinions; loan documents; development agreements; and option and guaranty agreements.

How We Can Help

  • creative structuring of tax credit transactions
  • drafting all required legal documents, including entity organizational documents, loan documents, indemnification agreements, and other real estate, syndication, and investment documents
  • preparing and rendering all necessary tax and corporate legal opinions
  • reviewing and advising on any necessary real estate and environmental diligence
  • assisting in compliance and asset management issues
  • negotiating terms with tax credit investors, lenders, or qualified businesses that receive favorable financing through tax credit financing
  • working closely with accountants to ensure the proper treatment of the projected tax benefits.

What Sets Us Apart

  • Our tax credit finance attorneys 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 our tax credit finance 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.”

Experience

  • Represented an investor with respect to several portfolios of ground and roof-mounted utility photovoltaic electricity generating systems in North Carolina that qualified for solar investment tax credits.
  • Represented a large public utility on the state income tax treatment of the disposition of business assets and in state tax litigation concerning the taxation of the gain on such a disposition.
  • Represented a project sponsor of the historic tax credit and new markets tax credit financing for the $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 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 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.
  • Provided strategic tax advice and restructuring alternatives to several Fortune 500 energy companies related to the integration of newly-acquired businesses and disposition of assets.
     

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