Tax Credit Challenges

Most Project Teams pursuing a “once in a lifetime” tax credit project will need an outside resource to help them understand, evaluate, and decide whether to pursue new funds via the Tax Credit Program.

When you decide to move forward, you may not fully understand what to expect in order to prepare for and execute the financing. The demands, financing requirements, and the specialized resources needed are not immediately obvious.

As a Tax Credit Financing progresses, the sheer volume of information to be prepared and provided, the expanded number of professionals involved, and the technical considerations are almost overwhelming. The Project Team resources are often insufficient to execute the project and begin operations, as well as coordinate and accomplish the closing and subsequent multiple compliance requirements. Compliance requirements extend from financing through the project completion, years of operations, through the compliance period wind down.

The Project Team quickly finds that multiple stakeholders, from the potential investors, Community Development Entities (CDEs), the Syndication Accountants, and their own legal counsel, require large amounts of financial information, project documentation, and economic information. While some of this exists, it often is not in the form needed for the Tax Credit Financing, or it is incomplete. The Project Team may not fully understand how to prepare the requested financial information in a manner that is needed or understand how do so.

Additionally, the teams are unaware of the far reaching impact of the Tax Credit process on almost every element of the project including the design compliance with Historic Tax Credit Standards (if accessing the Historic Tax Credits), the implications for types of business if using New Markets Tax Credits (“sin Businesses” such golf, tanning parlors, liquor sales), compatibility with other financing resources, future operations, cash flow segregation, and the actual organizational/entity structure itself.

Most of Plymouth Sounding’s clients do not have the resources in-house, the time, or the background to effectively manage, execute and comply with all of the conditions and challenges of the Tax Credit financing process as well as all elements of the entity legal structure, design and construction considerations, other financing sources, operations impact, and compliance requirements. Most organizations attempting to integrate Tax Credit financing into their construction project will benefit by using a Consultant with the experience to contribute in all areas of your project.

Other Projects

The Tennessee Theatre

The Proctor's Theatre

The Fox Theatre

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