Industry sign banking new mexico credit memo secure
hey there good afternoon and this is Johanna Nelson and we will be starting the webinar in about two minutes in the meantime we're going to launch a quick poll if you want to take a few seconds to let us know with what organization you're with if I can open pull oh okay [Music] we'll start in about two minutes okay go ahead and get started so I think everybody is in listen-only mode except for the organizers so we'll all need our phone when you're not talking but good afternoon my name is Johanna Nelson thanks for taking the time out of your day to join us for the webinar this afternoon I'm on the New Mexico Economic Development departments finance team and I'm a finance development specialist and I also helped to manage the New Mexico funded group which this webinar today is a part of our ongoing educational funded webinar series and the title of demystifying the new markets tax credit program and we're really excited that John Brooks from the New Mexico Finance Authority is here today and actually a New Mexico Finance Authority is a part of the sundeck group so before we begin just wanted to let you know that this webinar is being recorded and we will post this on our YouTube page our New Mexico Economic Development Department YouTube page and all attendees that signed up for the webinar will receive the link to the recording and they'll receive the presentation that we give today so no need to fret about that also if you're you have to step off for any reason you can get filled in later so to give you a little bit of brief background about fund it just before we get into our presentation so you can understand funded mission and goal this is it is a it is an informal group and it's made up of a couple of different types of entities so we have federal and state representatives of different programs that are representing funding programs so they have loans or grants that they're representing and then we also have cob directors which stands for Council of government directors and then we have our New Mexico regional rep and so out of that group we have the mission to help communities and local governments and and entities navigate the funding process and funding challenges when they have economic development or infrastructure projects so when they're trying to cobble together different types of funding sources or began to try to understand how they're going to fund a project this group convenes quarterly to hear pitches from these different communities about their projects so when that community is front of the in front of the group and they've made their pitch that made the presentation the group is able to offer back their expertise their knowledge their insight their guidance into how to address the the financing challenges so it's a really great opportunity for the different communities around the state to network face-to-face with the actual funders and ends of funding entities and it's a fantastic way to tap into the expertise authorities out there in the state because the card directors are familiar with many of the projects that are happening in the region and might have past projects that are very similar so it's a great sharing situation where they can everyone can learn from each other so here's an example of some of the entities that are represented and I think there's about officially there's about 13 but even if they're not officially a part of the group we often act as as advocates and liaison to to find the right funding entity and often bring them to the table as well and then in addition to the meetings that we have quarterly and the educational webinar series we have created an online tool that is available to anyone that is trying to figure out what funding sources are available for their particular projects so this is a way that you can go to that website that's listed at the top and then broken down by category so for example this is showing transportation housing community development so this there's several other components which often come up in a economic development or infrastructure project you can say ok my project has a transportation element and then here you'll see the different programs that might fit and your project might be eligible for and then you can click on that link and and go to that page to get more information about the program so this is if you go to this it is very useful but this is version 1.0 so hopefully we'll make some improvements and we're open to feedback but the whole purpose is if you can consume eyes is that the group is in existence to help educate the this state on financing and finding finding solutions to funding problems for different projects so without further ado we will jump into the presentation John Brooks is here from the New Mexico Finance Authority and he's going to be walking us through the exciting topic of new markets tax credit program and we've gotten a lot of questions about it and it's always a really important tool that's brought up in the funded discussions but a lot of people see it as complex or they don't understand the ins and outs of it so hopefully today you'll he'll gain a good understanding of it and I didn't mention either I'm sorry that want or as the the finance team director is also on the line and will be available for questions too so John you guys take it away sure thanks Joanna for the introduction and excuse me so before I get started I know that a lot of people are open that with this presentation you will be a complete industry knowledge about new markets tax credit I will safely say that you will have a good background and it took me five years to understand the program but that was just a bad joke so anyways get started and talks about the new market tax credit program today we will go over some of the new markets basics and and look at a sample structure we also will look at what makes a successful project so if you have a project that you're looking at and you think that it would qualify for new markets and you want to submit an application we will go through that process to determine the determine if your app your project is something that you could submit and would be successful with our program then we'll go into some sample projects that we have completed and in the past here in the state and then finally conclude with some questions and some information about upcoming deadlines that we have in the new markets program hey John I'm going to interrupt you for one second sorry I forgot to mention that you are more than welcome to write questions in the bottom right hand of the screen and the little grey tab that says questions as we go along and I'll compile them and we'll ask John at the end so it's go ahead sorry John oh no problem so real quick about the finance authority and how do we got introduced into this particular program the fire Authority was created in 1992 and basically it was created as a function of the legislative body to help coordinate and finance public projects and so in 1994 the authority had approximately two billion dollars worth of projects through it 16 different programs and and the 16 different programs range for public finance and private finance and in 2003 the finest authority brought in some of our financing ability by introducing a legislation called the statewide Economic Development Finance Act which allows the scientist or 'ti to work with the economic development department to finance private entities throughout the state without any issues with the state anti donation laws and part of that 2003 legislation gave us the ability to apply for the new market tax credit program at the federal level so let's go to some of the program basics and the structure of the new market tax credit program so what our new market tax credit and why would we want to use it and how does it stay work in and why there's so many different components to it is something that we're going to talk about in this particular section the new market tax credit program it typically funds about twenty to twenty-five percent of your project when it's leveraged with other funds so those other funds can be equity that you may have in a company it could be borrowed funds so if you got a loan from a bank or if you got a loan from any financial institution we could leverage those particular money or you could take a grant that you receive from the federal or state level and leverage those those dollars in a new market tax credit structure the new market tax credit structure will provide again 25 percent of the total project amount now a CDE which is a Community Development entity will provide flexible terms and the allocation that is necessary in order to fund the Newmar this portion of the transaction now the interest rates that we typically used in a new market tax payer program are fairly low and what we see typically is a seven-year compliance period or loan period in which the there will be a convert or conversion of some of the principal at the end of seven years so what our new market tax credits and when did it start well the new markets program started by the Bill Clinton administration and was implemented by the Bush administration so this was one of the programs that gardeners support from both sides of the aisle so both Republicans and Democrats typically support this particular program and the Bush administration was the first administration that funded a new Marcos program and has continued to receive additional funding throughout this current administration with an upcoming allocation to be announced pretty soon it is a shallow tax credit program and focused on economic development in low-income communities so when they designed this particular program they were looking for an opportunity to get investors who invest in low-income communities that are designated by their census tracts this program is administered through the community development financial institution or the CDFI fund which is a Treasury arm of the United States Treasury entities that are going to receive an allocation from the CDFI fund or a CDFI have to be a Community Development entity so you have to apply to be a CDE once you become a CDE then you can apply for an allocation of funds award winning CD EES can invest in the new market tax credit into a qualifying project and and those qualifying projects to be business creation banshan community facilities or even commercial real estate projects so the new market tax credit provides a 39 percent tax credit for all the dollars that are invested in in a particular project so for example if you have two million dollars and an investor wants to invest in your project they will receive 39% of 39% tax credit for the 10 million dollars that the project is worth so if your project size of 10 million dollars the investigate 39% they get 3.9 million dollars of tax credit those tax credits are used over the seven years so the first three years they use it at five percent and then the remaining four years they get to reduce their tax liability by six percent for a total of thirty nine percent the credit cannot be funded in two projects that are considered same businesses or projects that have greater percent greater than 80 percent of the annual income in two residential projects general in general we typically look at allocation going into areas that considered highly distressed and these are two concepts that we'll talk about later on in the presentation as well so why would you want to use new market tax credit so why is this program an effective tool for economic development the new market tax credit program is an ability to finance the gap that you may have in your capital stack the new market tax credits we typically look at projects between five to fifty million dollars but the sweet spot typically is between ten and fifteen million dollars and they could be located in rural and urban areas so there's no there's no issue in investing in either one of those typical areas now the typical financing structure that you will see with the new market tax credit program is a bit low market rate program in which the loans are paid interest only during the seven-year compliance period and approximately that reduces that reduces the amount of debt sir that you would have to pay in your project and make the project more economically feasible because of the interest-only payments that you would have to make we typically like to use about 10 million dollars as I mentioned earlier and you can expect that 25 percent of your capital stack for the carjacked use come from allocation from that and fester in this particular project so what you see on this particular chart and is all the players that are associated with a simplified and leveraged model structure and so when we look at the model that's before you you look at two different sides you have the long component and then the equity component starting with the equity component of this leverage model that you see before you the equity component comes from an investor that is looking to invest in your project the investor will purchase in though the tax credits that are invested that will go into your project and it will monetize those those tax credits at the day of closing the unique thing about this an investor they are only interested in receiving the taxpayers they are not interested in getting a a equity position in your project or in the company so for them the biggest thing is receiving the tax credit on the up and on the other side of the transaction is a leverage lender the leverage lender is typically a bank like Wells Fargo or some of the regional banks like Los Alamos National Bank or [Music] sinesses bacos Las Cruces or even US bank also we have you could use capital campaign funds so if you have collected as pot of money that you want to use for your project in that project and that's part of your capital stack you can use that as a leverage into this particular structure as I mentioned before you can use monies from federal or state grant programs to provide the leverage into a leveraged model and so when when you have both the leverage lender and the equity component they will put their monies into this investment fund which will make what we call a QE I or qualified equity investment into a project now in in this particular structure as you will see the arrows point to the investment fund and then then goes down to the sub development excuse me sub Community Development entity the Community Development entity or CDE is the entity that has the allocation of tax credit so for example if you have a 10 million dollar project the allocation amount for this particular project is going to be 10 million dollars now that allocation is provided to the sub community and a development entity and then lent down to the qualify active low-income community business or quality so all the monies funneled down to that particular entity which is the business self and they receive those monies and to separate love loans the first loan is the loan that's coming from the leverage lender the second loan is an equity loan that's coming from the new market tax credit and investor now as I mentioned before the repayments on these two loans are interest only so these are interest only loans for the whole seven-year period now in some instances a parent company would be the leverage lender so if they are the levers lender they will also create what we call a SPE or spouse or special-purpose entity that will be the borrower in this case so again the borrower is the quality the CDE is New Mexico Finance Authority in this case when we have allocation the leverage lender is debate or any other sources of funds that will be used in the project and the equity comes from an investor who is looking to invest in an area that's designated as a low-income area so they can receive those tax credits over a seven-year period the next year's lies sort of reiterate some of the things that I just mentioned on the previous slide you have information about the investor and their total benefit at 39% tax credits and typically the investor is paying between 76 and 88 cents per credit so one dollar per credit is worth any eight cents and will monetize that in the future the one thing about them an investor that they do not w
nt the tax credits to be recaptured so they don't want the business to do anything in legal that will that will create a REIT event and and the Finance Authority works with the investor as the sub community entity to make sure that that does not happen now if there was a foreclosure or some issue with the business where they are not able to pay back the loans we will work with the investor the lender to make sure that the funds do not get recaptured and invested into a new project and this slide is really about the leverage lender again the leverage lender is the senior lender into the transaction they will lend their monies into the new market so again it could be a loan from the grant the bake or a parent company lending to a subordinated company and the lender agrees to forbear and give up all his rights in terms of foreclosure for the 7 year compliance period but we will work with them if there was an issue with some of the payments on the loans the Community Development entity or CDE that is financed New Mexico or New Mexico Finance Authority our primary mission is to take the allocation that we receive and invest it in different projects throughout the state of New Mexico in this case what we're looking at invest in our economic development type of projects that will create jobs also projects that have a community benefit or community impact such as community facilities like hospitals schools or or anything of that nature also we can look at operated businesses as small or large and then the qualified active low income community business these are the businesses that are that are receiving the funds and they basically are operating business and these are some of the days that they have to supply with in terms of meeting a a standards for operating business so if you look at the 50% of gross income is derived from the business located in a low-income community what that essentially means that that business has to be in a low-income census tract and again the program is designed to be in a low-income census tract and when we look at and evaluate businesses and various projects we look at the census tract in which that business is going to be operating forty percent of the tangible property is located in a low-income community business also a forty percent of the services performed by deploys are located in the low-income community as well and then I'm sorry the the five percent and number basically you cannot have an assessment on your books that exceeds five percent of your balance sheet so that does make sure that you are operating business and not in an investment company so in terms of basic appliance requirements for a business and what we look for when we are looking at evaluating different companies that we're going to invest in first off we look at the Cintas tract and make sure that the business is located in the highly distressed low-income community also we look at the ineligible inactivity so if there is a residential project and more than 80% of the income is from a residential dwelling therefore we cannot invest in an app in that project so this has to be a mixed-use economic development project with a business that doing at least 70% of commercial rents at that facility now there are certain businesses that you cannot invest in through this program and and those businesses are called send businesses so racetracks golf courses gambling facilities liquor stores farming and massage businesses are all thin businesses even though they are all exciting in their own way they are consider staff now one one important and aspect of this particular program and allocation of credits does not be in cash so if we say you're going to get a ten million dollar allocation that does not mean that you're going to get ten million dollars with the cash and here's the math how a new Marcus project works so when you receive a tip me a dollar allocation then investor receives 39% tax credits for that particular project so that 39% is three point nine million dollars let's say if the investor says we will pay eighty two cents per credit for this particular project in this case the 82 cents times by its three point nine million dollars equates to three million one hundred and ninety eight thousand dollars that's going into the project now closing these things are fairly complicated and so there are some legal fees that are associated and also closing costs once you take those out then net the net cash that's going through the project is going to be two million four hundred and twenty three thousand dollars so if you look at the the numbers and look at how the math works out that two point four million dollars in Quast about 25% of the ten million dollars that you would need for a particular project so the allocation again is based on the total project cost the new markets rate is at 39% the investor receives at 39% and he paid a 82 cents of credit or you monetized that and you know 82 cents to receive the three point nine million dollars that he's going to use over the seven years and as a net result your company for your project receives two million dollars of cash that you get to use at the day of closing now if you're looking at the capital stack on this particular slide I'm sorry that the numbers didn't line up right I thought a six-day visit for some reason didn't work out if you look at the project sources and how that works out the project sources includes 2.5 million dollars of capital campaign so that's money that they may have received through some type of capital outlay or some type of a fundraiser that they may have put into for this project then they received another four million four point five million dollars of state grants that they you're going to use to leverage those dollars with so the leveraged loan is about seven million dollars for a ten million dollar project which you don't see below the total number is there's a gap of 2.5 million dollars in a ten million dollar project that's 4.2 million dollars that we talked about on the previous slide fills the gap for your particular project so therefore your project uses is about nine point five million dollars so that's how the math works out and that's how on the new markets works now the power of new markets based on that particular study is when you consider the low cost of capital so typically the 2.4 million dollars is lent into the structure at 2% so it's a 2 percent fixed loan that's going into the structure and and so that is considered low caste low cost of capital also there is flexible loan terms so what we do is we look at a longer amortization so the amortization on a typical Newmarket loan is 30 years but it balloons at the 7 year period why does it balloon at the 7 year period is because it's the compliance period in and the investor has utilized all 7 years or 7 you know the seven years of the 39 percent of the tax credits that they receive and so at that point that 2.4 million dollars perverts from debt to equity so what that means is that 2.4 million dollars the borrower gets to keep and don't have to repay that back so 2.4 million dollars you get to keep on your books at the end of 7 years if your project is successful so now that we've talked about the structure a little bit how does the New Mexico Finance Authority evaluate the project and and determine what makes a successful project and how we're going to invest in various projects throughout the state well we look at the project types here are the different project types that we will look at when we evaluate different applications that we are received through the new market side we have done you know everything from mixed use you know looking at a housing and commercial facility we've looked at we've completed grocery stores hotels nonprofit organizations which it I would consider some of the community businesses also health care health care has been vital to this state and because the state has a shortage of doctors we have found that the new markets program has been beneficial to help out with some of the shortage in the southern part estate and also in the Northeast the northwest part of the state where some of the RN investments we can look at renewable energy so when solar any type of renewable energy and you could twin it with renewable energy tax credits manufacturing we have done several manufacturing organizations or companies in the Albuquerque and also now in the Roswell areas so the new markets tax credit program is flexible to use with any type of different businesses or projects that that will arise here in the state the next thing we look at is Community Benefit so how does this your project have an impact in the community in which is going to be operating so are there going to be any direct permanent jobs that's going to be created what about the construction jobs that could be created in building that facility or renovating a facility indirect job creation so is there any secondary or tertiary jobs they're going to be creative because of your business being located in a certain census tract so for example if you're a electronic manufacturer and you're buying your supplies from another company within that you know in in the city in which you operate that is additional job creation that can spin off because of that business being expanding in that particular area increase the tax base so we hope that our investment into businesses that are in the local income taxes and business tracts will increase the tax base in that particular scissors track also blight removal you know there are areas that are considered brownfields and we look at investing in those particular areas and help to revitalize a community that meant that and it needs to be revitalized so when we looked at a new market tax credit eligible area and you can see the state of New Mexico here in the the middle part the areas that are in that sort of orange is orange looking color those areas are designated as severe distress or non-metropolitan areas so those areas are considered eligible now recognize that this is sort of a 30,000 s you know feet view of the state of Mexico and you could drill down into some of the communities in the rural areas and we can find out if those particular areas have qualified census tract the areas that are yellow they are eligible but they are not considered highly distressed and then the gray areas are none not eligible areas however if you look at the Carlsbad dot you would notice that there's a lot of gray but and when you drill down to that particular area there are qualified census tracts in Carlsbad now to get to this particular map there are several different organizations that have mapped the first one is the CDFI fund you can go to their their website and then they have a map and page where you can get on to their map novigrad ik which is an accounting firm within the new market industry has a map and this as I believe I've pulled this up from there man and then another company is baker Tilly they have a map and you could just Google a new market tax credit eligible map and then one of these areas one of those links will pop up and you can drill down with the address or you could call me or called the folks at economic development department and we could get that information for you as well so what again what makes a good quality candidate what makes a good business that we want to invest in in the new market tax credit area so again we if their business is located in a highly distressed census tract and they have to be to be considered a highly distressed census track they have to meet one of these five different criteria so poverty is greater than 30 percent medium impossible income is less than 60% of the state average unemployment is one half times the national average a non-metropolitan County or two of the any secondary criteria like a brownfield or any other or to be a HUBZone Opportunity Zones were still looking at and I know that a buzzword right now but we're still looking at those as how they would be used with the new markets program the one that I would point out about a non-metropolitan County when you look at a an area like Cuba New Mexico which is a qualified census tract but it is not a rule designated sister's tract and the reason it is because Cuba is within Sandoval County which has Rio Rancho in it therefore by having Rio Rancho in that particular County that through the whole county as urban and as opposed to and in rural County this is something we we have been frustrated with for a number of years and there is no changing the CDFIs position in terms of how to designate rural versus urban community impact we look at you know tangible community benefit so again quality of jobs are they going to provide some amended in that particular area or provide services to low-income communities or folks that are in that area or provide environmentally stable facility or or provide a lot of construction and jobs also is this part of a economic revitalization plan so I know a lot of areas are creating the Metropolitan redevelopment areas and through their City Council those are those districts are something that we look at for community impacts especially if that business is located in one of those designated areas and then finally the but-for test the but-for test says without the new market tax credits you are unable to get this project completed so you have a project you have this financing gap and you have no other means of getting that particular gap financed unless you have the new market tax credit so that's what that but for tests if that and you have to write a strong bus protest when we evaluate the applications itself and then once you've met all of these criterias you're ready to go and start applying for the new market program and when we evaluate the application themselves you submit an application and and and then the Rankin team looks at each individual application because we evaluate the allocation and the allocation is the allocation is divya based on there's the ranking of each individual project so it is a competitive process so based on the criteria that we just talked about on the previous slide here's what we look at when we evaluate the application the total of maximum points you could get is a hundred points and you have to meet a threshold a sixty point and then also you have to have be a moderate ready project so that means you're almost ready to to hit the ground running so almost shovel-ready so when you look at the 20 points for Community Impact and support we look at quality of life environmental impact is this a target industry or is it a downtown redevelopment so community impact is something that's very high on our list and and it's important when we evaluating some of these projects and so again the quality of life really gets down to quality of life for the residents and in that area and do they have a close and direct proximity to the new markets project itself the next thing we look at is the job creation and unemployment job creation is you know self-explanatory you create some jobs you get 10 points if you retain jobs so this project let's say renovate a a facility and you're going to be able to retain a hundred jobs for example and then create 10 additional jobs so that's what we evaluate when we look at a job retention secondary and tertiary jobs and five points construction jobs five points highways job creation and five points and employee benefits five points and we in our application process we look at all these aspects of job creation and employment and in Smith is specifically employee benefits because you know so one thing we want to do is have projects that impact folks live so they those benefits include healthcare expenses or 401k in two plans or vision plans or anything like that that will give the employees the ability to be successful in which in the in the community they they work the next item is applicant need and readiness so basically is the project financially sound so if you put together our pro forma or you have a balance sheet and an income statement doesn't make sense and does it show that for the next seven years you are able to based on your previous history support a particular project that you're about to undertake and with you
with the expansion or new project that you're taking can can it last at seven years so that's what financial soundness gets to the but for tests as I explained previously we evaluate that you get five points project readiness so do you have your permanent in place how close to the permitting process are you do you have the site secured and also on you know are you ready to go qualify management team that self-explanatory you know in do you have the folks that have the ability to manage the project and and and work in the industry that the project is competing in business location again that area is a high distress so we look at is is you know are you located in an area of high distress or do you have any of those secondary or primary options that we consider in terms of evaluating area of higher distress then we also look at a rural project if you're a rural project you automatically get the five point ticker economic economic and exports with export based companies so are those revenues as the company derived outside of New Mexico so if you manufacture a widget in the state of Mexico New Mexico and you sell it outside the state and that money comes back to your company within the state that's defined as export and economic based companies and then new capital investment are you built expanding or building a new business within a in the state of New Mexico here are some projects that we have completed recently some of you who have in the Albuquerque area may have seen this particular project is the hotel parque central that it's located on basically i-25 and Central Avenue this was one of our earlier new market tax credit projects that has completed the seven-year compliance period and what they basically did is took a old mental hospital and renovated it and made it into a five-star hotel this boutique hotel project had 74 rooms and the one big thing about this particular project is that they had to restore this project based on the Historic Preservation Office and and in the guidelines of the historic state historic preservation requirements and so a lot of the windows and doors that are inside this hotel had to be meet the requirements of the Historic Society so it was a very interesting project the bank that financed this particular project was la and B also they got we windows with the new market tax credit and a historic tax credit financing and and this particular 15 most seventeen million dollar project received 2.1 million dollars of equity from the new markets and historic tax credit so this project again it was downtown it was you know dilapidated and became a negative or a sore spot in that community and once they were event revitalized and renovate this to ticular project and it's been a successful project and it continues to be a successful project the one thing though that we gained in terms of drawing a blank I'm sorry the one thing about Elliott being participation and it was they were the first community bank to participate in a new market tax credit program from a community bank perspective and also they bought the some of the new market tax credit so they were both the lender and the investor in this particular project the next project I want to talk about is vitality works and that's also located in Albuquerque this particular project is a manufacturing company and they produce a homeopathic or natural supplement and the state in Mexico was interesting about this particular project at the time that we undertook the project they were evaluating either staying in Albuquerque or moving to Salt Lake City and so with the new market tax credit there was enough benefit from the equity on the sells and tax credits that did that gave them that the internal rate of return that they were looking for to decide to stay in New Mexico so they purchase the old Spartan buildin when when it was sitting empty on the west side of Albuquerque and when they moved into the facility is the it basically it was half empty so they figured that it would take ten years to fill out that facility and year five that that facility is packed and they're bursting at the seams and so because of the the low-cost financing that was associated with the new market structure they were able to take on additional contracts expand their customer base and so when when you're talking about homeless patio projects or natural supplement these guys make those private labels for whole foods sprouts natural markets and vitamin College so any natural supplements they probably made the supplements on behalf of those organization and put their labels put Whole Foods label on it and sold it and not realized that it was made here in Albuquerque the one thing about this particular project as well is they purchase a lot of herbs and supplements from farms that are located within the state so they purchase different plants that are essential for some of the homeopathic medicines and supplements that they make and that that is produced another market within the state of New Mexico and and had a huge impact on that particular industry if you look at the Capitol stack and the source of the fund u.s. bank was the leverage lender and also they they being the company itself provided some loan monies as a parent company and we were also fortunate enough to get two million dollars from the investor which is u.s. Bank on this particular project when we when we originally looked at this project based estimated that they would create 41 jobs and as of right now we are we are verified that they have created a hundred jobs at that particular facility the next project I want to talk about at the pub oh of Laguna the Pueblo of Laguna and didn't huge project on the Pueblo and they had several different projects that we have invested in but I want to talk about the water and wastewater projects or infrastructure project the the pub well the guna is one of the largest levels in the state in Mexico and and they have six different villages that are in Cabin saying that the total Club low and and there's about eight hundred seventy five square miles their water system and wastewater system was was falling apart and and just to give you an idea the water system the lines were made out of clay in some spots sun spots they were old steel pipes in there and they were all bursting and sometimes they would have to shut down the school for a complete day and other businesses for a complete days because the water system was not an adequate a water system and and supply adequate water to throughout the businesses at the Pueblo of Laguna and so when they undertook this system is this was a twenty three million dollar project in which they received funds from the USDA the Pueblo also contributed a lot of funds for this project and and also they there was an additional vena dollars an equity that came in from the Frog for this particular project when it's all said it does the new market tax credit equity brought in five million dollars to this particular project and now and as you can see in this slide they had to bring to the water lines down this down the sides of cliff to get it down to different different villages within and the pueblos so once the this once they were in the facility and completing and building new water line they decided that they will also start providing natural gas to five of the six villages and then created a natural gas company on the the pueblos so not only did they create a new utility system but they also added natural gas as part of their services that they will provide this was a huge project because it it provides services and benefits that that you would say is a community benefit for everybody and at that level and it was a great project and they are pretty close to completing their seven-year compliance period so in conclusion with the new market tax credit financing and sort of a recap the new market tax credits do not finance 100% of a project so if you get a 10 million dollar allocation it is not ten million dollars but it considerate 25 percent of the project and it provides a perfect gap financing for aimed project that has a you know a gap in their financing and their capital staff there's the borrower is responsible for identifying and securing their leveraged loans so that through a bank or capital campaigns or grants or very different funds and that particular money will provide 75% of the total allocation and then remaining 25% comes from the new market tax credit financing also remember at the end of the seven year compliance period that loan is the new market tax credit loan is diverted from debt to equity now New Mexico Finance Authority and Finance in Mexico currently has invested in or received I'm sorry we have totally received two hundred and forty six million dollars of allocation from the US Treasury CDFI fund right now we have about twenty million five hundred twenty million five hundred thousand dollars available through tax credit Authority the five authority currently and opens up around every quarter and so we are anticipating that we're going to open up another round to use up the remaining twenty million dollars in May of 2000 of eighteen and one other thing I want to point out we are going to be applying for more allocation because as you know twenty million dollars of allocation is not that much allocation so we will be submitting a new application package to the CDFI as soon as they make allocation available so the five Authority is soliciting pipeline projects those pipeline projects are not projects that are or that are guaranteed and receive allocation or nor does it commit you to receive financing or commit you to financing but what we would like to do is show that the state New Mexico does have the ability to support another 50 to a hundred million dollars of allocation and so it's important for the states to put together a pipeline that that will support another application to the Fed so with that here is our contact information for myself John Brooks marquita Russell and also our group email which is n m TC @ n MF h net thank you so much John I'm gonna look at the questions and let's see so the first question can you tell us again oh okay this was a question that said can you tell us again how great vitality works is and then there is a question and maybe Juan wants to talk to this have opportunities owns been determined you're on the call one no okay so I'll speak to that we the state did apply for an extension for up opportunity zone and the word oh there you are ah if you want to take this question it says have opportunities owns been determined yes thank you so we are currently in the process of sorting through the the nominations for Opportunity Zones as everyone may or may not be aware the opportunity zones are in fact new markets tax credit qualified census tracts and so they will be enhanced through this new program that will potentially make them more attractive in the future for for investor so the answer is we are currently sorting through the nominations we have requested and we received an extension and so we will be delivering for the governor's consideration the final set by the 10th of April but until that time will continue to take comment via our website for any information we should take into consideration on the opportunity zones but we are working diligently to to get that accomplished Thanks well I think that that you did a fantastic job John there's no other questions so it that was a great presentation I feel very demystified all right and if anyone does have any follow-up questions feel free to contact John or our team and we'll be in contact with John or the NSA just in closing I wanted to share some upcoming events that that we have with the de New Mexico Economic Development Department on May 30th we have our next workshop that is a part of the rural efficient business program and that'll be in Deming so that is for businesses that are located in in the area that are interested in reducing their energy consumption we have an engineer from in nerd that will be on hand at the workshop giving information and then she's available to give free energy assessments to businesses in the area so if you're interested in that feel free to register it's free we also talked about how to access the financing that's out there through the USDA to implement renewable energy sources and it's a great place to network with area providers and and the next one after dimming will be Clovis and then Carlsbad and Gallup so hopefully you can join us on the road and then our next funded meeting is tuna fish that'll be in Albuquerque at the mid region Council of Governments and you can go to fund it page and see upcoming webinars and you can get the application you can get the application there too if you're interested in playing and then our next webinar will be about the credit enhancement program that is that's a new program that we're enrolling with with the Economic Development Department so you can use this link and register for that that's a collateral assistance program that is Ella that's for businesses in New Mexico so with that being said here's our contact for the New Mexico Economic Development Finance team and our web pages is on the bottom and and you've all send this presentation out to everyone and and on behalf of everyone that attended in this department I'd like to thank you John and the NMFA for for your time and expertise and encourage everyone to follow up with John if you have questions thank you for allowing us to present and we're glad glad to answer any questions or meet with folks in regards to new market tax credits awesome thank you so much John there in the webinar okay
