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CDFA - Best Tax Credit Financed Project

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    • 1. CDFA 2008 Practitioner’s Showcase May 6, 2009 National New Markets Fund LLC Second Line Stages
    • 2. 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)
    • 3. 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
    • 4. Diversifying New Orleans’ Major Industries Big Issue : More Industries With More Jobs
    • 5. 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
    • 6. 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
    • 7. 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
    • 8.
          • 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?
    • 9.
      • 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
    • 10.
          • 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
    • 11. 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
    • 12.
      • 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
    • 13.
      • 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
    • 14. 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  
    • 15. 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  
    • 16. 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
    • 17. 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

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