CDFA 2008 Practitioner’s Showcase May 6, 2009 National New Markets Fund LLC Second Line Stages

National New Markets Fund LLC Economic Innovation International Belden Hull Daniels, President and CEO Strategic Development Solutions Deborah J. La Franchi, President and CEO Partners in New Market Tax Credits Economic Innovation: Founded by Belden Hull Daniels in 1970 $150B Privately Capitalized Funds Built Since 1970 CDFA Pioneers: Economic Innovation helped build more than a dozen in: AK, AR, CO, CT, FL, KS, MA, ME, NE, VA, WA, and WY Harvard and MIT: Taught Development Finance at both for many years Strategic Development Solutions Founded by Deborah La Franchi in 2001 15-Person Economic Development and Fund Building Firm Genesis LA: First CEO: 6 Funds capitalized at $.5B doing $1.5B deals Former Assistant Deputy Mayor for Economic Development (Los Angeles/Mayor Riordan)

Partners in New Market Tax Credits

Economic Innovation: Founded by Belden Hull Daniels in 1970

$150B Privately Capitalized Funds Built Since 1970

CDFA Pioneers: Economic Innovation helped build more than a dozen in: AK, AR, CO, CT, FL, KS, MA, ME, NE, VA, WA, and WY

Harvard and MIT: Taught Development Finance at both for many years

Strategic Development Solutions Founded by Deborah La Franchi in 2001

15-Person Economic Development and Fund Building Firm

Genesis LA: First CEO: 6 Funds capitalized at $.5B doing $1.5B deals

Former Assistant Deputy Mayor for Economic Development

(Los Angeles/Mayor Riordan)

New Orleans, LA August 29, 2005 Hurricane Katrina 1800+ Deaths $90 Billion in Property Damage 30 Oil Refineries Damaged; 9 Never Reopened More than 1 Million Housing Units Flooded Unemployment Doubled in One Month from 6% to 12% 25% Poverty Rate Before “The Great Recession” The Costliest Hurricane Ever One Of The Five Deadliest Ever

1800+ Deaths

$90 Billion in Property Damage

30 Oil Refineries Damaged; 9 Never Reopened

More than 1 Million Housing Units Flooded

Unemployment Doubled in One Month from 6% to 12%

25% Poverty Rate Before “The Great Recession”

Diversifying New Orleans’ Major Industries Big Issue : More Industries With More Jobs

New Orleans Tourism Was Job Generating Tourism was 35% of the City’s Annual Operating Budget Since Katrina, New Orleans Lost $1B+ per year in Tourism $ Post Katrina Tourists Cut By 2/3rds Was More than 10 million per year Cut to About 3 million per year Thus, Economic Diversification is Critical And, High Value-Added Jobs are Even More Critical Big Issue : Tourism Collapse

Tourism was 35% of the City’s Annual Operating Budget

Since Katrina, New Orleans Lost $1B+ per year in Tourism $

Post Katrina Tourists Cut By 2/3rds

Was More than 10 million per year

Cut to About 3 million per year

Thus, Economic Diversification is Critical

And, High Value-Added Jobs are Even More Critical

New Orleans Motion Picture Industry Helps Fill the Gap From ‘01 and ‘07 New Orleans Motion Picture Industry: Grew 22% Each Year Wages Increased More than 8% Louisiana Became One of Top Production States And Production Facilities Create High Value-Added Jobs Big Growth : The Film Industry Creates: New Jobs New Income New Taxes

From ‘01 and ‘07 New Orleans Motion Picture Industry:

Grew 22%

Each Year Wages Increased More than 8%

Louisiana Became One of Top Production States

And Production Facilities Create High Value-Added Jobs

Big Growth :

The Film Industry Creates:

New Jobs

New Income

New Taxes

Louisiana Film Production Since 2002: $2 Billion in Productions Have Been Filmed in Louisiana $1.5 Billion Total Direct Impact to Louisiana’s Economy Each Year Film Jobs Increased by 33% Film Production Budgets Spent in Louisiana Have Risen from 33% in 2005 to 87% for 2007 Big Deal : Big Diversification

Since 2002:

$2 Billion in Productions Have Been Filmed in Louisiana

$1.5 Billion Total Direct Impact to Louisiana’s Economy

Each Year Film Jobs Increased by 33%

Film Production Budgets Spent in Louisiana Have Risen from 33% in 2005 to 87% for 2007

Supports the Rapid Growth of Louisiana’s Indigenous Motion Picture Industry Serves the Specific Demand for More Streamlined Production Assumes a National Leadership Position in a Cleaner, More Environmentally Friendly Film Industry Stimulates Long-Term Economic Growth in New Orleans and Louisiana Creates Training, Jobs, Income, Wealth, and Taxes Why a Production Studio in New Orleans?

Supports the Rapid Growth of Louisiana’s Indigenous Motion Picture Industry

Serves the Specific Demand for More Streamlined Production

Assumes a National Leadership Position in a Cleaner, More Environmentally Friendly Film Industry

Stimulates Long-Term Economic Growth in New Orleans and Louisiana

Creates Training, Jobs, Income, Wealth, and Taxes

Big Construction Impacts 200 Direct Jobs, 22 Indirect Jobs $2 Million Federal Tax Revenues $.75 Million State Tax Revenues Big Impacts : Construction Second Line Stages: A Sow’s Ear Into a Silk Purse

Big Construction Impacts

200 Direct Jobs, 22 Indirect Jobs

$2 Million Federal Tax Revenues

$.75 Million State Tax Revenues

35 Filmed Productions 2,635 Direct Jobs 2,597 Indirect Jobs $20 Million Federal Taxes* $12 Million State and Local Taxes* Big Operation Impacts Over 7-Year NMTC Life Big Impacts : Operations * Figures do not take into account the 40% State Film Infrastructure Tax Credit or the 25% State Tax Credit for Productions over $300,000. Second Line Stages: A Sow’s Ear Into a Silk Purse

35 Filmed Productions

2,635 Direct Jobs

2,597 Indirect Jobs

$20 Million Federal Taxes*

$12 Million State and Local Taxes*

Big Opportunity : Lots of Training Lots of Jobs Second Line Stages Partners with Kingsley House to Create: Apprenticeship Training for At-Risk-Youth Green Collar Training for At-Risk-Youth Neighborhood Security Training Outcome: Skilled Employment Opportunity for Residents Creative Arts Workshops with Visiting Artists and Professionals Studio Second Line Stages: A Sow’s Ear Into a Silk Purse

Second Line Stages Partners with Kingsley House to Create:

Apprenticeship Training for At-Risk-Youth

Green Collar Training for At-Risk-Youth

Neighborhood Security Training

Outcome: Skilled Employment Opportunity for Residents

Creative Arts Workshops with Visiting Artists and Professionals Studio

Concrete Slabs Have Very High Fly Ash Recycled Steel Locally Purchased Materials Waste Recycled from Landfills to Green Projects Reflective Roofs Save Energy Going for LEED Silver Certification Big Deal : Sustainable Construction Second Line Stages: A Sow’s Ear Into a Silk Purse

Concrete Slabs Have Very High Fly Ash

Recycled Steel

Locally Purchased Materials

Waste Recycled from Landfills to Green Projects

Reflective Roofs Save Energy

Going for LEED Silver Certification

Computer Automated Systems to Optimize Operations High-Efficiency Air-Cooled Chillers Variable Air Volume HVAC Systems Premium Efficiency Motors Variable Speed Drives on All Motors Compact Fluorescent and High Output T5 Lighting with Electronic Ballasts Going for LEED Silver Certification Big Deal : Sustainable Operation Second Line Stages: A Sow’s Ear Into a Silk Purse

Computer Automated Systems to Optimize Operations

High-Efficiency Air-Cooled Chillers

Variable Air Volume HVAC Systems

Premium Efficiency Motors

Variable Speed Drives on All Motors

Compact Fluorescent and High Output T5 Lighting with Electronic Ballasts

Going for LEED Silver Certification

Second Line Stages – Closing Financing $41 Million Total Funding to the Project $ 4.7 M Senior Loan to Project $ 5.1 M Master Tenant Loan A - Blend of NMTC Equity, Federal Historic Tax Credit Equity and Debt $ 1.7 M CDE Loan B - NMTC Equity $ 4.1 M Fund Loan A - NMTC Equity, Loan, and Developer Equity $ 0.7 M Fund Loan B - NMTC Equity, Loan, and Developer Equity $ 5.8 M NNMF CDE Loan - Blend of NMTC Equity, Federal Historic Equity, Developer Equity, and Debt $ 3.0 M CDE Equity - Blend of Sources $ 3.0 M Master Tenant Equity - NMTC Equity and HTC Equity $ 8.8 M SLS Developer Equity $ 3.0 M State Historic Tax Credit Equity – Direct to Project $ 1.0 M Book up/Contributed Property $ 0.1 M Interest Income on Loan $ 41.0 M

Second Line Stages – Total Gross Financing $57.2 Million Total Gross Financing Over Project Life $ 10.2 M Leveraged Loan - to SLS Lender $ 8.5 M SLS Equity contributed to SLS Lender $ 6.9 M $24MM in NMTC Allocation between 3 CDES $ 4.7 M Federal Historic Tax Credit Purchase $ 4.7 M Senior Loan - direct to project $ 9.8 M Developer Equity contributed over the life of project $ 2.9 M State Historic Tax Credit Equity Paid over time $ 9.5 M Infrastructure Tax Credit Equity $ 57.2 M

Leveraged Loan - to SLS Lender

SLS Equity contributed to SLS Lender

$24MM in NMTC Allocation between 3 CDES

Federal Historic Tax Credit Purchase

Senior Loan - direct to project

Developer Equity contributed over the life of project

State Historic Tax Credit Equity Paid over time

Infrastructure Tax Credit Equity

Second Line Stages: A Very Complicated Transaction Non-Member Manager Investment Fund SLS Lender LLC National Bank 1 National Bank CDC NNMF CDE 2 CDE 3 CDE 1 Master Tenant LLC Developer SLS LLC Second Line Stages National Bank 1 State Historic Tax Credit LLC CREDITS EQUITY DEBT SERVICE DEBT SERVICE DEBT SERVICE DEBT SERVICE LEASE PAYMENTS DEBT SERVICE, PRIORITY RETURN AND HTC CAPITAL CONTRIBUTION/ BOOK UP DEBT SERVICE, PRIORITY RETURN CREDITS QEI QEI QEI DEBT SERVICE AND PRIORITY RETURN

Second Line Stages: A Winner at Every Level A Devastating Tragedy Creates Enormous Needs Building a Sound Stage Helps Anchor a New Industry Training LMI Residents Creates New Job Opportunities: 2,835 Direct, Often High Value Jobs 2,619 Indirect Jobs More Income, Wealth and Tax Base in the Community: $22 Million in Federal Taxes Over 7 Years $13 Million in State and Local Over 7 Years Constructing and Operating Green: Creates a National Model for Film Production Creates a Local Model for Green Development

A Devastating Tragedy Creates Enormous Needs

Building a Sound Stage Helps Anchor a New Industry

Training LMI Residents Creates New Job Opportunities:

2,835 Direct, Often High Value Jobs

2,619 Indirect Jobs

More Income, Wealth and Tax Base in the Community:

$22 Million in Federal Taxes Over 7 Years

$13 Million in State and Local Over 7 Years

Constructing and Operating Green:

Creates a National Model for Film Production

Creates a Local Model for Green Development