Board of Aldermen 12-11-2018 Page 2
that Center. They have also suggested possibly reorienting the stage from the Main Street end to the
western end and opening the main entrance on Main Street, all these things can be considered as we go
forward. But these are very promising and exciting ideas that they have put forth regarding how the design
can be used just to make a striking statement in our downtown.
A regular meeting of the Board of Aldermen was held Tuesday, December 11, 2018, at 7:30 p.m. in the
Aldermanic Chamber.
President Lori Wilshire presided; City Clerk Patricia D. Piecuch recorded.
Prayer was offered by City Clerk Patricia D. Piecuch; Alderman Jan Schmidt led in the Pledge to the
Flag.
The roll call was taken with 14 members of the Board of Aldermen present.
Mayor James W. Donchess and Corporation Counsel Steven A. Bolton were also in attendance.
REMARKS BY THE MAYOR
Mayor Donchess
Keene — Example: Library Project ($15.5M)
City of Keene
$2.5M (equity)
$8.96M (Loan)
76 Winter Street, LLC CDE Equity Investor (“US Bank”)
“Sr. Leveraged Lender” S$8.96M Sr. Lev Lender S5.07M NMTC Credit
S8.96M S4.36M NMTC Investment $4.36 Net NMTC Capital
$13.32 Total
§ 13.32M
S -200K (fees/expenses)
§ 13.1M
$2.5M equity Heberton Advancement, LLC
“QALICB”
S 2.5M
: ey City of Keene
, “Master Tenant”
Operator
Calculating NMTC Amount
Qualified Equity Investment ("QEI"): S 18,500,000
Credit Rate: 39%
Total Credits: S 7,215,000
Credit Price/$1.00: S 0.85
TOTAL EQUITY INVESTMENT: S 6,132,750
Calculating Loan B Amount (Net NMTC Equity)
Total NMTC Equity Investment: S 6,132,750
Less Fees S (930,000)
LOAN B AMOUNT: S$ 5,202,750
NASHUA PERFORMING ARTS CENTER: DEAL STRUCTURE
Bond Proceeds
$ 42,927,250
Bond
yments
x
Loan
$ | 12,927,250
Debt Service
Payments
|_ Coan
$ 12,927,250
Debt Service
Payments —
NMTC EQUITY
$ 6,132,750
NMTC's
$ 7,215,000
Qualified [Equity Investment Debt Service
"QEI"
$
Payments
18,500,000
E LOANS
Loan "A":
Loan "B":
12,927,250
5,202,750
18,130,000
NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF
NMTC’s
NUMBER 5
Community Development Entities (CDEs) are the key to NMTC
funding. CDEs are awarded credits by the US Treasury. CDE’s
must sub-allocate these credits to worthy projects that meet
program guidelines. Therefore, we must convince 1 or 2 CDEs
that the proposed project has financial strength and results in
positive community impacts.
NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF
NMTC’s
NUMBER 4
There is a 7 year compliance period. After that, any
restrictions on the transaction go away!
NUMBER 3
There are fees involved! Generally, these reduce the value of the NMTC by about 15%.
Proceeds from Sale of Credits: $331,500
Fees @ 15%: ($49,725)
NET EQUITY: $281,775
The key is LEVERAGE!
$281,775 (28%) leverages $718,225 (72%) in debt.
NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF NMTC’s
NUMBER 2
The amount of the tax credit is 39% of Qualified Equity Investment
(“QE!I”). So, for example:
QEI Amount: $1,000,000
Credit Amount @ 39% = $390,000
The credit can be sold to an investor in order to raise cash (equity) for
the project. Current Pricing is estimated at $.85/S1.00. Therefore:
$390,000 in credits sold at $.85 = $331,500 in equity for the project.
NASHUA PERFORMING ARTS CENTER — KEY ELEMENTS OF NMTC’s
NUMBER 1
Assisted business must be a corporation or partnership that exists in a qualified
area. This is called at Qualified Area Low Income Community Business or
“QALICB”.
This means that the City of Nashua cannot be a direct beneficiary of the
program, but it can participate as a Lessee of QALICB property.
