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Tools for Redevelopment Tools for Redevelopment

Tools for Redevelopment - PowerPoint Presentation

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Tools for Redevelopment - PPT Presentation

Courtney Knight Managing Director Redevelopment Revitalizing Atlanta Redevelopment Programs 2 TAX ALLOCATION DISTRICTS Revitalizing Atlanta Creates incentive for development that would otherwise not occur ID: 633667

atlanta 500 tax investment 500 atlanta investment tax 000 investor program development financing allocation loan nmtc tads foreign private city projects funds

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Slide1

Tools for Redevelopment Courtney KnightManaging Director, Redevelopment

Revitalizing AtlantaSlide2

Redevelopment Programs 2Slide3

TAX ALLOCATION DISTRICTSRevitalizing AtlantaSlide4

Creates incentive for development that would otherwise not occurTax increment financing (TIF) is a tool used to publicly finance certain redevelopment activities in underdeveloped or blighted areasLocally, TAD creation results from legislation passed by the City, County, and Atlanta Public Schools

TADs attract private investment which results in increased development, new jobs, reduced crime and greater economic vitality

New development within the TAD increases property values and thereby increases tax revenue

What is a Tax Allocation District?Slide5

How do TADs work?Slide6

10 Tax Allocation DistrictsTo date, approximately $560 million in TAD bonds have provided gap financing for over $3.4 billion in private development

Assessed property values in TADs have grown 20% since 1998 while City of Atlanta has grown at 5%

Incentivize development in blighted and underdeveloped areas of

City

Beltline

Exception:

Other

TADs’

tax increment or bond proceeds are

used

primarily as developer incentive, while the Beltline TADs increment or proceeds are used to fund the construction of Beltline infrastructure.

City of Atlanta TADsSlide7

Livable Centers Initiative (LCIs)

Atlanta Regional Commission

City

of Atlanta and Invest Atlanta will jointly submit an application to Atlanta Regional Commission for Livable Centers Initiatives (LCIs

).

LCI designation will

provide funding for major  transportation improvements  that will

improve access

to

the

University

site by

improving

access to the

main

roads north of the site.Planning grants to enhance connectivity, accessibility by multiple transportation modes, walkability, and mixed-use development in activity centers, town centers and corridors.Slide8

PRIVATE INVESTMENT PROGRAMSRevitalizing AtlantaSlide9

Federal program enacted by Congress in 2000 to attract private sector investment to communities with high rates of poverty and unemploymentNMTC investment finances commercial and mixed-use projectsInvest Atlanta’s NMTC entity has $148MM in NMTC Allocation

Federal priorities for NMTC investments:

Job Creation

Jobs Accessible to Low-Income Persons

Goods and Services to Low-Income Communities

Flexible Lease

R

ates for Locally-Owned Businesses

New Markets Tax CreditsSlide10

Project receives a 7-year below-market rate loan.

20% of loan does not have to be repaid at

end

of term

.

80% Developer Funds:

Bank

Loan, Grants or

Charitable Contributions

20% Equity

: Tax Credit Investor Contribution

NMTC Investment Fund

New Markets Tax Credits –

Deal StructureSlide11

Invest Atlanta has been awarded $148 million in NMTC allocation since 2007.

$48 million of NMTC allocation

is currently

available (as of October 2014)

New Markets Tax Credits ProgramSlide12

United States federal program created in 1990 to attract foreign investmentProgram allows families to expedite US citizenship process with investment of $500,000Program targets investments to projects in low-income areas

Invest Atlanta is creating a new EB-5 regional center to match investors with eligible projects

T

arget

Areas for Investment

EB-5 Foreign Investment ProgramSlide13

EB-5 Program requirements for developers:Target Area – Projects must be located in low-income areasJob Creation – Each $500K investment must create 10 jobsDeveloper Loan – Typically funds are provided as a 5 year loan

Ideal Deal Size – $5 - 20 million range is best for EB-5 tool

Matches foreign investors to local projects

Collects $500,000

f

rom each investor

Funds are combined then released when project is ready

Investors get a visa for residency when project is complete

EB-5 Foreign Investment Program

Invest Atlanta EB-5 Regional CenterSlide14

EB-5 Program Financing for Development ProjectsAmountInvestor #1$500,000

Investor #2

$500,000

Investor #3

$500,000

Investor #4

$500,000

Investor #5

$500,000

Investor #6

$500,000

Investor #7$500,000Investor #8$500,000Investor #9$500,000Investor #10$500,000Total EB-5 Investment$5,000,000Development projects typically get a 5-year loan with 4-6% interest rate

EB-5 Job Creation RequirementsFor each $500,000 invested, 10 jobs must be created.

In this example, the project must create 50 jobs.

Once funds are received and construction

starts, visas can be issued.EB-5 Foreign Investment ProgramSlide15

Business Financing InitiativesSlide16

Property Assessed Clean Energy Financing (PACE)

Private financing for building owners to make energy efficiency upgrades.

Funds provided 100% upfront.

Repayment over 20 years along with annual property tax bill.