NASHUA PERFORMING ARTS CENTER: DEAL STRUCTURE
Bond Proceeds
$ 12,927,250
Bond
Payments
Loan
$ | 12,927,250
Debt Service
Payments
|_-—Ctoan
§ 12,927,250
Debt Service
rayiients
December 20, 2018
NMTC EQUITY
$ 6,132,750
NMTC's
7,215,000
Equity Investment
“QEI"
$ 18,500,000
Deb
Pa
t Service
ments
CUE LOANS Debt Service
Loan"A™: $ 12,927,250 Payments
Loan "B": $§ 6,202,750
§ 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
(“QEI”). So, for example:
QE! 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/$1.00. 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.
Special Bd. of Aldermen — 05/20/2019
Testimony in Favor - None
Testimony in Opposition - None
ADJOURNMENT
MOTION BY ALDERMAN O’BRIEN TO ADJOURN
MOTION CARRIED
The meeting was declared adjourned at 7:51 p.m.
Attest: Judith Boileau, Deputy City Clerk
Page 15
Special Bd. of Aldermen — 05/20/2019 Page 14
Special Bd. of Aldermen — 05/20/2019 Page 13
So you don’t need an endowment fund so whatever money is collected here should be thrown into the
construction job. But you cannot ask these architects to make up a $10 million dollar deficiency.
