| THE CITY OF NASHUA
Office of Economic Development
"The Gate City"
To: Lori Wilshire, President of the Board of Aldermen
From: Tim Cummings, Director of Economic Development
Ce: Members of the Board of Aldermen
Date: May 15, 2019
Re: Operational Issues Surrounding New Market Tax Credit (“NMTC”) Program
Purpose
This communication is being presented to help organize and provide background information in an effort
to help outline some of the more specific and nuanced details of the New Market Tax Credit (“NMTC”)
transaction.
Background
If you recall, a communication was provided to the Board of Aldermen on December 1 1, 2018, which
gave a high level overview of the deal structure. Since that meeting the City has procured an Attorney
who specializes in structuring New Market Tax Credits transactions and he has further helped us refine
our concept.
As the deal diagram shows the City of Nashua is creating two entities (and ultimately three). R-19-136
creates two of the three entities and in a follow on piece of legislation as outlined in the “Anticipated
Approval Document” additional legislation will be forthcoming.
What Does R-19-136 Do
Authorizes the City to form up to two (2) voluntary, nonprofit corporations under the provision of RSA
162-G and pursuant to RSA 162-G:15 ordains these two new entities as public corporations.
Why is this Important
The City of Nashua cannot directly participate in the NMTC transaction as a QALICB. Furthermore, the
industry prefers municipal corporations to not be the Senior Leverage Lender.
We are doing this now in an effort to be in a good position to act expediently. Community Development
Entities (“CDEs”) want to be able to move quickly and place their NMTC allocations. Project readiness is
a key factor in being an attractive project.
What is a QALICB
A QALICB is typically a single purpose entity (meaning it has 1 function) and is defined by the IRS as a
Qualified Active Low Income Community Business where substantial portion (defined as at least 40%) of
the services preformed are within a Qualified Low Income Community (““QLIC”).
What is the Sr. Leverage Lender
In finance it is a way to describe debt that has a superior position than other forms of debt that may be
issued or involved in a transaction. In this instance it is a single purpose entity with a sole purpose to
