Low-Cost, Non-Dilutive Equity for Commercial Real Estate Projects

City of PhoenixPhoenix Community Development and Investment Corporation (PCDIC) is currently seeking projects for the 2017 New Market Tax Credit (NMTC) Loan Program pipeline to encourage private sector investment in low-income communities in Maricopa County.

Benefits of the NMTC loan program include below market interest rates; higher loan to value or loan to cost (up to 80%); up to 1-yr interest-only construction loans; 7-yr mini term loans and/or P & I loans (25-yr amort. for P & I loans, and interest-only for 7 years also available for larger projects); equipment and/or leasehold improvements will also be considered as part of the commercial real estate loan; opportunity for principal reduction (i.e. low-cost, non-dilutive equity) via put option after 7-year NMTC term; subject to compliance with a negotiated Community Impact Plan, which must document how the project will benefit low income communities.

To qualify for this financing opportunity, borrowers must meet the following Program requirements:

1. Have a qualified project located in the most distressed NMTC census tracts within Maricopa County (PCDIC can help determine if a project qualifies under these requirements).

2. Project sponsors may include owner-occupied businesses or developers with proven track records.

3. Targeted Deal size: $5 Million and up.

4. Smaller projects less than $5 Million will be considered for a different NMTC fund.

5. Targeted industries may include: mixed use office & retail space developments; Non-profits; Healthcare; Industrial/Manufacturing; Educational; Community retail development (New and/or redevelopment).

For more information, visit www.PhoenixNewMarkets.com or contact Community Investment Manager Paul Huleatt at paul.huleatt@phoenix.gov or 602-495-7358.

About the New Markets Tax Credit Program:

The New Markets Tax Credit Program (NMTC Program) was established by Congress in 2000 to spur new or increased investments into operating businesses and commercial real estate projects located in low-income communities. The NMTC Program encourages capital investment in low income communities by allowing corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). The Phoenix Community Development Investment Corporation (PCDIC) manages NMTC funding for the City of Phoenix.

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