Special Bd. of Aldermen — 12/20/2018 Page 2
big issues that | want to talk about that is a little bit different that Niel will get into a little bit more detail in a few
minutes is the idea of the ground lease. We are not going to be able to do that ground lease concept for a
couple of reasons and one of them is a municipal corporation should be as far away from the New Market Tax
Credit deal as possible. So transferring the asset into the QALICB and then having a reverted later on down
the line is how we are looking at structuring it. That will protect and ensure the City that the asset returns to
the City but nonetheless it won’t be that explicit ground lease type model that was mentioned in the YouTube
video.
With that being said, | am going to bring up Niel’s power point presentation and turn it over to Niel where he will
go into a little bit more detail about the program itself and the specific way we are going to structure the project
here in Nashua.
Niel Cannon Thanks Tim, my name is Niel Cannon and | am a consultant to the City on New Market Tax
Credits. | have been working with Tim and his people for 2 or 3 months now intensely and I’ve enjoyed every
minute of it. There is a lot of leadership in this City and a lot of excitement over this project.
The New Market Tax Credit Program is a federal economic development initiative that started about 12 years
ago. The purpose of the program is to encourage investments in low income communities. Low income
communities are defined as census tracks that meet certain income criteria, most commonly used is a census
track that has median household incomes of 80% or less of the Statewide average. A census track is just an
enumeration district, ita geographic area from which census data is collected separate from census data for
the whole City in this case.
Nashua has 17 census tracks. They can be bounded by municipal boundaries, they can be bounded by
railroad tracks, streets, roads, whatever. There are 17 census tracks Nashua as | said and of those | think 5
qualify. The census track in which the proposed Performing Arts Center which we are in right now as a matter
of fact, is among the poorest in the State. | told you that the criteria was 80% or less | think | said median
household income, it should be median family income. In this census track in which we are located and in
which the project is located, the median family income is 31% of the State average, it is way low. It has also
got almost a 30% poverty rating. So not only is this eligible it is classified as severe distress which makes it an
ideal target for this program.
Before getting into the details, I’d like to focus on five of the concepts that were referred to in the video we just
looked at. The first thing is the idea of what is a QALICB; a Qualified Area Low Income Community Business.
Assisted business must be a corporation or partnership that exist in a qualified area and we just talked about a
qualified area. This is called a qualified area low income community business or QALICB, that is the box at the
bottom in the diagram we looked at. This means that the City of Nashua cannot be a direct beneficiary of the
program but it can participate as a lessee of QALICB property because the City is not, by IRS definitions a
corporation or partnership. But it can master lease a property that is developed by a QALICB.
This kind of arrangement has been done before. The first City to really use this aggressively and benefit as a
master lessee of a property was the City of St. Louis which did a lot and used it for waterfront development on
the Mississippi River. Boston has used it a lot in conjunction with its redevelopment efforts. And in little old
New Hampshire, Keene has used it twice this way. We probably had 20 projects in New Hampshire for the life
of the program, Keene has used it twice where the City was the master tenant of the project
Initially | was involved in this one | think it was about 5 or 6 years ago. The Cheshire County Court House was
threatening to leave downtown so we put together a New Market Tax Credit Program and we set up non-
profits, QALICB that built a new courthouse, leased it to the City so the City had some control. They sub-
leased it to the State of New Hampshire and after the 7 year compliance period, the State of New Hampshire
will be able to buy it
