Special Board of Aldermen 11-24-2020 Page 4
Technology-wise this evening, just to set the stage, | am going to be sharing my screen for the most part
this evening. At one point | am going to stop sharing my screen; Niel Cannon is going to share his screen
when he speaks and then he’ll be handing it back over to me. | say that to everyone so logistically you can
just become acclimated to that. When we are done speaking, I'll bring down my shared screen as quickly
as possible so we can have the full context of everyone for participation purposes. So, with that being said,
Madam President, | am sharing my screen here and | am just going to quickly read this to you. Again, an
overview: A New Market Tax Credit is a Federal Financial Program that aims to stimulate business and
real estate investment in low income communities through a Federal Tax Credit. The program is
administered by the US Treasury Departments, Community Development Financial Institutions Fund known
as CFI and allocated by and through Community Development Entities known as CEE’s.
Early on we anticipated using the New Market Tax Credit as a tool for the benefit of the Performing Arts
Center Project. In 2018 and 2020 a Comprehensive Tax New Market Credit 101 type briefings were
provided by our Development and Finance Consultant, Niel Cannon who is on this call with us this evening.
During the briefings, Niel explained in detail how the program works. R-20-094 which is the subject of
tonight’s conversation is an omnibus piece of Legislation that provides multiple authorizations necessary for
the City to proceed with the New Market Tax Credit. The structure before you is pretty simple, pretty
standard deal structure; ultimately, however, every New Market Tax Credit transaction is unique and may
require certain nuances tweaks. A New Market Transaction is like a multiple dial lock, that you need to
align the dials to unleash its potential.
The following describes how we are aligning the dials to make the program work for us as we are a
Municipal Corporation. And why are we doing this? As you all know, there is a $4 million-dollar
requirement for non-Nashua tax dollars to be contributed to the project in order for it to proceed. The New
Market Tax Credits afford us this opportunity to proceed now, because the New Market Tax Credit
Transaction will net to us $2.446 million coupled with local philanthropic donations of $1.553 million. We
achieved the $4 million-dollar requirement that needs to be satisfied. Needless to say, we had a unique
condition placed upon us and it calls for a unique solution. The chart beside you outlines the sources and
the amounts that achieves that $4 million dollars that | referenced.
Unique constraints, speaking of unique solutions, we also have some unique constraints when dealing with
the New Market Tax Credit. One of these constraints is time. From the very beginning we outlined that time
is going to be of the essence which does not lend itself toward our unique Government structure. We
would need to adapt this to this condition and this omnibus does just that. If you recall, we outlined that
once a CDE decides to make a Quality Equity Investment, known as a QEI, we would need to move
expeditiously. A second issue is the evolving nature of the deal structure, which means that as we look to
align the dials, new issues and details arise which must be addressed. The varied documents are typically
evolving all the way up until closing and this body is accustomed to seeing set deals with a handful of
documents. The omnibus addresses a dynamic and multi-part deal structure of the New Market Tax Credit
transaction by employing a typical tool that other municipalities use which is to seek approval to allow for
the overall effectuation of the deal and empowers the professional staff in administration to execute based
upon details and overall concepts.
So, my request this evening is two-fold. Tonight, | ask for favorable consideration and our recommendation
in order to proceed with the New Market Tax Credit Transaction with a favorable approval of the omnibus
addition to that, | am requesting a verbal report at your regularly scheduled Board of Aldermen Meeting just
following this meeting for final passage of R-20-094. With that being said, Madam President and through
you to the body, this evening, we have put together a small presentation that | would like to go through; and
the team that has been working on this so Celia Leonard and me, we’ve been working hand in hand on this,
Attorney John Kaminski who is with us this evening, is our outside New Market Tax Credit Counsel. And
then Neil Cannon, our Development and Finance Professional along with Andy Prolman our local Real
Estate Attorney is here with us this evening. Each one of those individual members will speak this evening
on the various parts of the deal that they are involved with.
