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Tax Credit Transactions
Vorys’ tax credit team has deep experience representing real estate developers, non-profit organizations, syndicators, investors and lenders in transactions involving federal and state historic tax credits (HTC), federal and state low-income housing tax credits (LIHTC) and new markets tax credits (NMTC).
We have more than 10 attorneys, including commercial real estate, finance and tax attorneys, whose practices include tax credit transactions. These attorneys handle every component of tax credit transactions, including strategic planning, structuring, negotiating, documenting and closing tax credit transactions, as well as exit and workout transactions. We approach tax credit transactions creatively as a team, utilizing subject matter expertise to deal with the unique and complex issues that may arise in such transactions.
Given that federal and state tax credits are ever evolving areas of the law, Vorys attorneys remain apprised of legislative, judicial and administrative updates and changes in the law. For example, when the Ohio HTC was targeted for elimination through an amendment added to the Ohio budget bill in 2015, a Vorys attorney testified before the Senate Finance Committee regarding the importance of the HTC and helped to organize a successful coalition effort to have the amendment removed. Vorys is also a member of the Historic Tax Credit Coalition, and a Vorys attorney is on the board of Heritage Ohio, Inc.
Historic Tax Credits
The members of Vorys’ tax credit team have recently closed multiple HTC transactions on behalf of investors, lenders and developers, helping clients utilize HTCs to rehabilitate commercial buildings, residential units, mixed-use buildings and other facilities. We work closely with our clients to navigate the rules and regulations in order to structure transactions that meet their business goals while complying with HTC requirements. Many of these transactions have involved the twinning of multiple tax credits together with other forms of financing and incentives, including tax increment financing, grants, property tax abatement and other incentives.
Low-Income Housing Tax Credits
Vorys has been assisting clients with LIHTCs since the early 1990s. We represent developers, non-profit organizations, and FHA, Fannie Mae, Freddie Mac and bridge lenders in LIHTC transactions. We assist our clients with the full development lifecycle of LIHTC transactions, including structuring, drafting and negotiating of agreements, and advising on compliance, tax, real estate and HUD issues. We also help our clients structure LIHTC exit and workout transactions.
New Markets Tax Credits
Our team utilizes a multi-disciplinary approach to NMTCs, drawing on the experience of our tax, finance and real estate attorneys, and bringing in other attorneys as appropriate to provide specialized knowledge that may arise in these transactions. We assist our owner/developer clients in developing projects utilizing NMTC financing, often times combining NMTCs with other public financing options.
Additionally, we represent community development entities (CDE) in developing investment funds and structuring project investments in qualified active low-income community businesses (QALICB). We also represent investors in connection with NMTC windup transactions at the end of the NMTC compliance period.
Representative tax credit transaction experience:
Representation of owner/developer in the redevelopment and rehabilitation of 750-units of project-based Section 8 affordable housing on scattered sites in a single neighborhood of a major metropolitan city. Representation includes structuring the redevelopment and rehabilitation transactions; negotiation of joint venture agreements with development and equity partners; negotiation with federal and state low income housing tax credit and historic tax credit investor limited partners; due diligence; financing and review of construction and related agreements.
Represented the developer in connection with the closing of several complex equity investment transactions throughout the State of Ohio involving federal HTCs and Ohio HTCs for the renovation of (i) a former manufacturing facility, (ii) a historic school, and (iii) a prominent factory, all as multi-family housing.
- Representation of owner/developer in connection with the redevelopment and rehabilitation of two companion project-based Section 8 affordable housing projects located in the District of Columbia, both financed with LIHTCs and District of Columbia subsidies and one financed with federal HTCs. In addition, the representation includes advising on the District of Columbia Tenant Opportunity to Purchase Act (TOPA) issues and strategy, negotiation of joint venture agreements and District of Columbia tax abatement.
Represented the investor and lender, in connection with the renovation of a historic theatre in Southern Ohio utilizing both federal and Ohio HTCs by a tax-exempt sponsor.
Represented a federal and state historic tax credit investor in connection with the redevelopment of an urban furniture showroom as a mixed-use project that includes residential units, retail and commercial spaces.
Represented a community development entity and a related QALICB in closing a $35 million leveraged NMTC transaction for a mixed-use project adjacent to a major university.
Represented a number of owners/developers in connection with LIHTC transactions, some of which include federal and/or state historic tax credits, to finance the construction and renovation of affordable housing projects in Ohio, the Mid-Atlantic and Southeastern United States.
Represented lenders and borrowers in several highly complex FHA-insured loan transactions involving HTCs, tax abatements, PILOTs and various state and local loan and grant programs.
Represented lenders in dozens of bond-financed, new construction and substantial rehabilitation transactions insured under Section 221(d)(4) of the National Housing Act involving LIHTCs under the “alternative bond” structure, many with tax credit master leases, and Section 236 “IRP De-Couplings”; in over 300 transactions refinancing Section 202 loans, many involving bond financing and LIHTCs; and in over 100 “Mark-to-Market Restructuring” transactions, many involving bond financing and LIHTCs.
Represented lenders in numerous restructurings in connection with LIHTC workout transactions, as well as foreclosing and exercising other mortgagee rights in LIHTC loans.