Special Board of Aldermen 11-24-2020 Page 13
As those loans are being paid up through the structure, remember that money to repay those loans goes
over to repay the City’s $7. something million dollar loan. So once they have finished taking the Tax
Credits over the 7 year period of time, they don’t own very much at all. They own just a few rights in the
investment fund, nothing to do really with the real estate, just with respect to that debt that is largely being
repaid back to the City. Does that answer your questions?
Alderwoman Lu
Yes, | am not sure | understand it completely. But does their interest, is it their interest in the fund reduced
over time?
Mr. Kaminski
Their benefit is reduced over time because they claim the New Market Tax Credits. They claim their credit
over a 7 year period of time; a slice in Year 1, a slice in Year 2 and so forth. By year 7, they claim them all
and that’s their primary economic benefit.
Alderwoman Lu
Ok, thank you that makes sense. So they don’t have anything to gain after the 7 years? OK. So could |
just ask three other questions?
President Wilshire
Yes.
Alderwoman Lu
Ok, how is it, | think Attorney Leonard mentioned that when we close on the sale of the building that the
purchase price will go back to the City. Now is that going to stay back at the City?
Mr. Kaminski
Yes the City is selling the real estate for $2 million dollars to Impact Corp. and that $2 million dollars that is
received from Impact Corp. is the sale proceeds to the City.
Alderwoman Lu
OK, | didn’t remember whether our bond amount included the purchase price for the building. | am
guessing it did. And how many municipalities, | understand this sounds like a process that is typically
geared toward businesses and we are kind of going some convoluted actions here to make it fit within a
municipality. Do many municipalities go through this rigmarole? Thank you?
Director Cummings
| can speak to it as well after Niel.
President Wilshire
Mr. Cannon.
