Special Bd. of Aldermen — 12/20/2018 Page 18
Mr. Cannon Right, right.
Alderman Tencza
Ok just so people are clear about that. And then the other question | have is just about the 7 year compliance
period because | think that it is a little confusing because of the project we are doing, | think people might
interpret that as the project has to be economically viable for 7 years but clearly the library in Keene is not
making money for the town right unless they have excessive overdue fees or something like that.
So what is the criteria that the City is going to be judged against, what are our obligations for those 7 years for
that loan.
Mr. Cannon You just pay the loan.
Alderman Tencza
So that is it.
Mr. Cannon You have some reporting requirements, but primarily it is to pay the loan. The 7 year compliance
period effects more when New Market Tax Credits are used to assist an operating business. So if General
Motors was a recipient of New Market Tax Credit financing, it has to do all kinds of assurances that 80% of its
labor force will remain in that qualified area for the 7 year period and all kinds of other stuff. But when you use
it for real estate, the borrowers of QALICB has no employees, just like any other real estate deal: it is usually
an LLC or a partnership, it doesn’t really have any employees. So there is really no 7 year compliance issue
for this project, other than it takes 7 years to pay out the tax credits to the investors and your leases will have
to be at least 7 years. And any option, if the City wants an option to buy the property after 7 years, it would
have to be after 7 years, basically buy it for the balance of the debt, because it is paying off the balance of the
debt.
Alderwoman Kelly
If | could for a moment go back to the non-profits, at the risk of getting very complicated, would you be able to
include that in your flow chart and kind of where they fit in wnen you update that?
Mr. Cummings
Yes but | need direction, it is not on here now because | have yet to hear consensus strong enough to actually
tell me how the community would like it structured. | have heard differing opinions and part of this to some
degree, we all have to keep in the back of our mind, President McCarthy who was a big champion of this isn’t
here now and so he was involved at the very beginning of the structuring of this. He was actually part of the
selection team that brought Niel on board. So with him passing now, we kind of took a pause, and now we are
kind of re-starting again and trying to re-orientate ourselves and so trying to make sure we satisfy all of the
differing stakeholders who are involved in this project is a yeoman’s effort and President McCarthy did a great
job at that.
| wasn’t very sure yet how to actually illustrate it. So once | get a better thought of how the community wants it
structured, consensus-wise, | absolutely want to put it on to this flow chart.
Alderwoman Kelly
What do you see as the steps to getting to that consensus?
