Historic Tax Credit Sample Deal Terms
Through its CCG Historic Partners Funds, CityScape Capital Group syndicates historic rehabilitation tax credits involving all types of project uses, such as residential, office, commercial, hospitality, and charter schools.
CityScape Capital Group typically utilizes a multi-tier transactional structure so that the developer retains the depreciation benefits; however, if required, CityScape Capital Group has the flexibility to use a single-tier transactional structure. The pricing in terms of cents per tax credit dollar depends upon not only the tax credit amount and transaction ownership structure but also the pay-in schedule, annual cash flow, put option, and developer guarantees. In order to provide an indication of the marketability and financial benefits of the historic rehabilitation tax credits, an in-depth review of the rehabilitation budget and financial projections is required.
In lieu of providing a pledge of personal collateral or acceptable guarantee to ensure the availability of funds for the payment obligations and tax credit indemnity guarantee, the developer can accept a deferred pay-in schedule and deposit the final capital contribution into an interest bearing escrow account.
Note: Because of legal and accounting costs associated with due diligence, structuring and closing, transactions with less than $600,000 of historic rehabilitation tax credits are difficult to syndicate.