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Butler Snow Serves State in New Markets Tax Credits Transactions

Butler, Snow, O’Mara, Stevens & Cannada, PLLC, recently served as Community Development Entity Counsel, Bond Counsel, State Equity Investment Counsel and Economic Development Incentives Counsel in a $23 million New Markets Tax Credits (NMTCs) transaction on the Mississippi Gulf Coast.

The transaction combined federal and state NMTCs, Mississippi Business Finance Corporation Gulf Opportunity Zone (GO Zone) Bonds and state and local economic development incentives.

The project involved the construction of a medical office building located on the campus of Singing River Hospital in Pascagoula, which will benefit the community with new state-of-the-art facilities to house healthcare services.  The medical office building, developed by Johnson Development headquartered in Birmingham, Ala., is licensed for 435 beds and offers a wide array of inpatient and outpatient services.

Utilization of the federal and state NMTC program, GO Zone bond financing and other economic development incentives resulted in substantial economic benefits to the project, including private equity investment, below market interest rates and state and local tax savings.

“The NMTC Program has proven to be an effective means of rebuilding economically distressed communities, including those devastated by Hurricane Katrina,” said Don Clark, Chairman, Butler Snow.  “New and rehabilitated projects are being developed throughout Mississippi, Louisiana and Alabama as a result of the NTMC Program, including office buildings, schools, hotels, retail centers and manufacturing facilities.”

NMTCs are intended to spur new private sector investment in communities in need and encourage continued redevelopment and reconstruction in the GO Zone and in other low-income communities. The NMTC program provides significant financial assistance in the form of below market debt and/or equity to qualifying businesses and developments located within certain qualified low-income census tracts.

“Butler Snow has experience in tax credit financing transactions with significant emphasis on transactions involving the federal and state new markets tax credits program  and the historic rehabilitation tax credit program (HRTC),” Clark said. “Our firm offers clients guidance in complex legal and regulatory issues that may arise during these transactions.”

Other recent representative NMTC and HRTC transactions include a project benefitting Habitat for Humanity on the Mississippi Gulf Coast; as well as a mixed use project benefitting Jackson State University, an office building project, and the renovation of a historic bank building – all located in downtown Jackson.