Special Board of Aldermen 11-24-2020 Page 6
President Wilshire
Yes?
Alderwoman Lu
| just wanted to ask is this the sheet of paper that we all received today? Perhaps we are all looking at it?
President Wilshire
I’m not sure everyone has one.
Alderwoman Lu
Ok.
Mr. Cannon
Ok we are back, I’m sorry. Can we all see it?
President Wilshire
Mr. Cannon
Mr. Cannon
| apologize for that. So, I’d like you to look at the top box here, which basically shows the sources of funds
as well as the uses. And very simply, there’s 3 sources; there’s your $21 million-dollar bond; there’s the
$2.446 million-dollar New Market Tax Credit Equity, which is what this is all about. And there’s a donation
of $1.5 million dollars and change from the Nashua Community Arts. That totals $25 million. The uses are
without getting into the detail, is a total development budget for the building itself including acquisition of the
land of $22,550,000.00 and for furnishing and fixtures, this is special equipment audio/visual, stage lighting,
etc., of $2.45 which brings you to your total. So, given that | want to talk a little bit about how this works in
terms of this project. As you all know, because we’ve talked about it before, as many of you know, the New
Market Tax Credit Program is an incentive for communities or individuals to invest in distressed
communities. And a distressed community is a census track which meets certain criteria. The Census
Tract in Downtown Nashua that this project is located in is the most distressed census tract in the State.
So, it is eligible.
The amount of the Tax Credit available to investor is 39% of the qualified equity investment. Now the
Qualified Equity Investment which you see here is $9.75 million. We tried, Tim and |, for more than a year
to make like that $15 million, so that the number, you know, we were talking about $5 or $6 million dollars
and add up see equity. But unfortunately, we couldn’t get an allocation any greater than this. It’s for
several reasons, number one) Mascoma which is the only CDE that serves New Hampshire exclusively did
not have an allocation from US Treasury. Number two) the market for these things is very competitive and
when you go outside of New Hampshire asking for a CDE to make an allocation to do a project inside New
Hampshire, the first they do is they look at New Hampshire’s statistics and say, “you are too well off, you
have a median family income way about the national average, so we are not going to spend money there”.
Well, that’s too bad. They are very macro oriented rather than micro oriented.
So anyway, if you take that number of $9,750,000.00, the Tax Credit 39% of that or $3.8 million dollars
which is this number right here. So, for an investor to get that credit, he has to buy it from us because we
don’t want it. We want to raise cash. So, we effectively are selling him that credit, the $3,802,500.00 for
$.76 cents on the dollar, which is another number that’s gone way, way down because of the Tax Act of
2017, COVID and other issues. But we did well.
