Nmtc, a case study fclf and miracle place

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  • Metropolitan Ministries mission is to care for the homeless and those at risk of becoming homeless in our community, through services that alleviate suffering, promote dignity, and instill self-sufficiency … as an expression of the ongoing ministry of Jesus Christ.
  • 40 years ago, 13 area churches came together to form Metropolitan Ministries to address the needs for food and shelter for the homeless in our city.
  • We continue to touch thousands of lives today, and the need only grows with each year.
  • In 2011, 2,700 families sought housing from Metropolitan Ministries and we were able to provide more than 1,200 emergency shelter nights for families in our facilities. Still, there were over 50 families on our waitlist for housing.
  • What makes the Ministries so unique is the approach. Our Uplift-U residential program not only provides intensive case management for families, it is personalized to lead each of them to self-sufficiency.
  • We focus on families because the greatest need lies in children. Our programs are child-focused because that is where love and hope are essential, and that is where we believe the cycle of homelessness can be stopped. Our programs include a full-time day care, an elementary school operated in partnership with SDHC, after-school care, on-site GED for adults, and even a teen after-school program.
  • Our employment lab helps clients learn job skills and seek employment on their path to self-sufficiency.
  • As much as we were doing to address the homeless issue in Tampa and Hillsborough County, the need was still great.
  • Inside the Box is a new social enterprise launched in October 2010 by Metropolitan Ministries. Offering catering and a lunch café downtown, Inside the Box provides gourmet meals and contributes one meal to a Metropolitan Ministries client for every one meal sold. ITB also provides MM clients with job training and even operates a culinary school.
  • MiraclePlace will include a new residential building that will also contain a new child care center and a new counseling center.
  • MiraclePlace will include a new residential building that will also contain a new child care center and a new counseling center.
  • MiraclePlace will include a new residential building that will also contain a new child care center and a new counseling center.
  • It will also include a new Welcome Center.
  • The campus will surround a Reflection Garden for families, and a new playground for children.
  • Nmtc, a case study fclf and miracle place

    1. 1. Florida Community Loan Fund, Inc. And Metropolitan Ministries Florida Housing Coalition Annual Conference September 2013
    2. 2.  FCLF is a statewide federally certified Community Development Financial Institution (CDFI).  Founded in 1994 to provide a statewide source of flexible financing for non-profits working in community development.  Since it began lending in 1996, FCLF:  has closed 173 loans throughout Florida totaling over $51 million for projects totaling over $250 million.  has financed 93 facilities totaling 1.2 million square feet  projects have created or retained 5,608 jobs  projects have reached over 22,500 recipients of social services  has committed $112 million of its $151 million NMTC allocation in 12 NMTC projects in Florida and the Southeastern U.S. totaling over $358 million. About FCLF Florida Housing Coalition – September 2013
    3. 3. Community Development Fund Commercial loans to non-profit or mission-focused for-profit organizations  The Transition House. Purchasing and Green standard rehabbing of homes and multi-unit buildings in Central Florida, used for supportive housing primarily to veterans  DuPuis Pointe, Miami. 27 affordable homes built using Green and hurricane-proof standards  Northwest Jacksonville CDC. LEED-certified 10,600-sf commercial building new LEED-certified construction project. Florida Housing Coalition – September 2013
    4. 4. Florida Preservation Fund Commercial real estate loans for preservation of multi-family affordable housing  Timber Ridge of Immokalee. 34 rental units of farmworker housing and a community center.  Royal Poinciana, West Palm Beach. 144 unit apartment complex, acquired and renovated.  Oasis of Hope, Miami. 32-unit apartments under renovation. Florida Housing Coalition – September 2013
    5. 5. Florida Community New Markets Fund Funding for community facilities, Green projects, and economic development  Metropolitan Ministries, Tampa. Human services campus of 93,000 sf, providing 52 apartments for at-risk individuals and family, child care, on-site public school, counseling. Total project $18.9 million. Funders include JPMorgan Chase, Whitney/Hancock Bank.  SolarSink, LLC, Tallahassee. Manufacturing innovative solar “sausages” heatsink energy, 1.0mw solar field and 70 jobs; total project $16.6 million. Funders include U.S. Bancorp CDC, Hunter & Harp Holdings.  KIPP School, Jacksonville. Charter school built from former greyhound racetrack for 170 students; total project $26.2 million. Funders U.S. Bancorp CDC, National Equity Fund. Florida Housing Coalition – September 2013
    6. 6. FCLF New Markets Tax Credits Projects Florida Housing Coalition – September 2013 FCNMF’s NMTC Focus is on Community Facilities, Green Projects, High-Impact Economic Development Projects FCNMF will not use NMTC for Museums, Hotels, Fast Food Restaurants FCNMF NMTC projects total 12 projects, $358 million project cost, receiving $112 million in FCLF tax credit allocation  ASPIRA North Charter School expansion – North Miami  PACE Elder Care Center – Richmond, VA  UM Life Science Research Center – Miami (LEED certified)  KIPP Jacksonville Charter School – Jacksonville (adaptive re-use)  Solar Sink solar cell manufacturing facility and solar field – Tallahassee (Green)  BTH Quitman Torrefied wood manufacturing facility – Quitman, MS (Green)  Lake Point Restoration water treatment facility – Lake Okeechobee (Green)  ASPIRA Mid-Town Charter School purchase and expansion – Miami  New Camillus House Campus – Miami (LEED certified)  Metropolitan Ministries Miracle Place – Tampa (LEED certified)  Green Biofuels bio-diesel manufacturing facility – Miami (Green)  Hometown Markets – Hitchcock’s Grocery Store – Old Town
    7. 7. Uplift U ® Unique on-site residential program personalized for each client to lead them to self- sufficiency
    8. 8. PromiseLand Day Care Partnership School Outside of School Care On-site GED Program Teen Program
    9. 9. Partnership School
    10. 10. Employment Lab
    11. 11. 17,000+ homeless men, women, and children in Hillsborough County (Highest in Florida) • Only 1,500 emergency and transitional beds to support them 15 Families coming daily to MM looking For Shelter Existing Dining Facility at Capacity Why Expand?
    12. 12. Fragmented and Antiquated Daycare Near Capacity Why Expand?
    13. 13. “Where hope grows, miracles blossom.” Elna Rae
    14. 14. NMTC Program Summary Florida Housing Coalition – September 2013  US Department of the Treasury CDFI Program  Purpose is to spur investments into businesses and real estate projects in low-income communities Pictured: ASPIRA Eugenio Maria de Hostos School, Miami NMTC investors receive tax credits against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs)  Major federal economic development program - larger than CDBG  Construction or major renovation of real estate projects located in qualified low-income census tracts
    15. 15. NMTC Program Demand Florida Housing Coalition – September 2013  $36.5 billion through 749 awards since inception  Competitive: Banks, developers, government, CDFIs  2012: 282 applications requesting $21.9 billion  Awarded 85 allocations totaling $3.5 billion (20 non-profit CDFIs)  FCLF: $151 million cumulative in tax credit allocations  New proposed program funding: 2013 & 2014: $8.5 billion combined  In Florida, over $530 million in projects done through NMTC Pictured: U of Miami Life Science Research Park
    16. 16. Key NMTC Program Components  Tax credits only-not a grant  Not loan capital-must raise upper tier debt & tax credit equity  Equity investor receives all of return through tax credits  The investment in the CDE cannot be redeemed before the end of the 7-year period  Severe penalties for program & IRS violations – tax credit recapture 39% of investment  Borrower & Allocatee indemnifications Florida Housing Coalition – September 2013
    17. 17.  $6 million minimum project size.  Project must be located in a qualified distressed, low- income census tract: 30% poverty, 60% median income, or 1.5x national unemployment  Project must provide clear and substantial benefits to low- income populations.  Project should generate notable construction and permanent jobs.  Works best for near-bankable projects (e.g. strong borrower and project that can pencil out with the extra support of NMTC). NMTC – Guidelines & Structures Florida Housing Coalition – September 2013
    18. 18. LIHTC vs. NMTC Florida Housing Coalition – September 2013 LIHTC…  Offers tax credits  Provides front-end subsidy for projects  Has significant restrictions on use  Distributed through state housing agencies  Each project competes for tax credits  Has very long compliance periods – longer than the benefit of the credits NMTC…  Offers tax credits  Provides shallow subsidy; additional subsidies may be needed  Provides equity that accrues at the back end of the project  Seldom used for housing, but many economic development uses  CDEs compete for tax credit allocations nationally and distribute as they decide  Compliance period and benefits are over a 7-year period
    19. 19. Typical LIHTC Diagram Florida Housing Coalition – September 2013
    20. 20. Camillus House New Markets Diagram Florida Housing Coalition – September 2013
    21. 21. NMTC Projects in Florida have included:  Shopping Centers  Manufacturing Facilities  Hotels  Museums  Office Complexes  Restaurants  Auto Retail  Boat Manufacturing  Affordable Home Ownership by Habitat for Humanity There are other types; these are examples. NMTC – Eligible Project Types Florida Housing Coalition – September 2013
    22. 22. NMTC Projects that FCLF finds desirable:  Community facilities • Community health centers or health care related projects serving low income clients • Charter schools serving exclusively low-income students  Green-driven projects • Solar • Renewable energy  High impact economic development projects • Job creation (substantially from within the community) • Part of community redevelopment master plan • LEED-certified • Bringing new services to a low-income community  a grocery store in a neighborhood that hasn't seen one in 20 years  a new or renovated building in a high distress CT that brings new business, services and jobs to the neighborhood.  Some of the projects that are qualified but FCLF will not do: • museums; • hotels; • fast food restaurants NMTC – FCLF Project Types Florida Housing Coalition – September 2013
    23. 23. NMTC – Who is Involved Florida Housing Coalition – September 2013 Above: KIPP School Jacksonville Below: Metropolitan Ministries MiraclePlace groundbreaking, Tampa  Borrower (QALICB) Significant benefits.  Lower debt service coverage  Higher LTVS  Potential for equity  Allocatees (one or more Community Development Entities, or CDEs ) Benefits:  High Mission Impact  Fee income  Investors (typically a bank) Benefits:  > 39% federal tax credit  > $10MM. $2.7MM investment yields $3.9MM
    24. 24. NMTC – Who is Involved, continued  Upper Tier Lenders (borrower affiliates, banks, Community Development Financial Institutions, foundations, public entities) Benefits:  most interest income flows to upper tier lenders  stronger LTV ratios  strong borrower repayment incentive  Attorneys (NMTC specialist, RE attorneys)  Accountant (Reznick or Novogradac accounting firms)  NMTC Consultant Florida Housing Coalition – September 2013 Pictured: Camillus House, Miami
    25. 25. Miracle Place, before expansion Florida Housing Coalition – September 2013 Pictured: MiraclePlace site, pre-construction
    26. 26. Housing Units Current Proposed Variance Emergency 10 20 +10 100% Transitional 34 79 +45 132% Total 44 99 +55 125% 10 20 34 79 44 99 0 20 40 60 80 100 120 Current Proposed Housing Units Emergency Transitional Total MiraclePlace Proposed Expansion, Housing
    27. 27. 98 211 26 48 218 467 342 726 0 100 200 300 400 500 600 700 800 Current Proposed Annual Residents Families Single Women Children Total Current Proposed Variance Families 98 211 +113 115% Single Women 26 48 +22 85% Children 218 467 +249 114% Total Annual Residents 342 726 +384 112% MiraclePlace Proposed Expansion, Annual Residents
    28. 28. View from Northeast (along N. Florida Avenue)
    29. 29. View from Northwest (E. Frances Avenue)
    30. 30. View from Southwest across campus and Reflection Garden
    31. 31. Before NMTC Closing After NMTC Closing Sources Available from Cash, Pledges, Grants, and Financing $ 10,000,000 $10,000,000 New Net Equity from NMTC $ 3,600,000 Development Budget $ 13,214,992 $13,214,000 Funding Surplus / (Deficit) ($ 3,214,000) $ 386,000 Financial Impact of NMTC
    32. 32. Other Impacts of NMTC  Reduced construction interest costs due to significant project funding from cash rather than debt  Capital campaign focus shifted to future phases rather than focusing on completion of initial phase, building substantial momentum and community support  Broader exposure for our project  New partners in FCLF, Chase, Hancock Bank, and Enhanced Capital
    33. 33. Advantages of the NMTC Structure Florida Housing Coalition – September 2013  Effective rates are typically below market for commercial loans of this type.  As a result of longer amortization or interest-only payments and typically lower rates, monthly payments are lower than for similar size conventional loans.  The “B” loan is often treated as up-front substitute for a portion of equity required by lenders, resulting in higher LTVs.  The equity conversion of the “B” loan means that most up-front equity becomes true equity at end of 7-year term.
    34. 34. The Good, The Bad, and The Ugly  Extremely valuable funding vehicle  Enormous time investment required to perform necessary due diligence, document production, and evaluation of documents  Very, very, complex process that requires multiple expert consultants to close transaction  Possible to handle in-house, but not recommended!
    35. 35. Challenges using the NMTC Structure Florida Housing Coalition – September 2013  Whether longer amortization or interest-only payments, there is a balloon payment requirement at the end of 7 years; underwriting is for ability to refinance at that time.  Some inflexibility (e.g. project location restrictions, no prepayments, term is always 7 years, certain purposes not allowed, etc).  Program is very complicated and closings are time consuming; and there is a notable learning curve for first-time capital providers and borrowers.  High legal and accounting fees.  Project must be ready to go.  Generally, a new single purpose borrowing entity is required in order to reduce the significant reporting requirements during loan term.  In addition to loan guaranty, a Borrower or guarantor also provides indemnification for tax credit recapture events caused by borrower’s actions.
    36. 36. Is Closing Using NMTC Worth It?
    37. 37. Phase II – Next Steps  K-5 Elementary School  Youth Enrichment Center for After-School Programs  Gymnasium and Assembly Hall to Enhance School and After School Programs
    38. 38. Florida Community Loan Fund Metropolitan Ministries Contact Information Nelson Black, Director of Lending 813.223.7400 Tampa Cindy Ross, Community Development Loan Officer 813.223.7422 Tampa Jim Walker, Community Development Loan Officer 954.315.1746 Ft. Lauderdale Valerie Williams, Community Development Loan Officer 904.790.2785 Jacksonville Susan Holtrey, Loan Portfolio Manager 407.246.0846 Orlando MAIN OFFICE: 501 NORTH MAGNOLIA AVENUE, SUITE 100 ORLANDO, FLORIDA 32801-1364 PHONE 407.246.0846 www.fclf.org Florida Housing Coalition – September 2013 Brian Evjen, VP, Strategic Planning and Analysis 813.209.1227 Tampa Tim Marks, President and Chief Operating Officer 813.209.1250 Tampa Madelyn Cloninger, Director of Advancement 813.209.1235 Tampa 2301 NORTH TAMPA STREET TAMPA, FLORIDA 33602 PHONE 813.209.1200 www.metromin.org

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