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Council briefed on Homestead Station new markets tax-credit unwind; assets to transfer to city pending audit and closing
Summary
City attorneys briefed the council on the planned unwinding of the Homestead Station New Markets Tax Credit transaction. The 7-year compliance period has ended; closing is scheduled for Oct. 2, and city staff expect the QualicB entity's assets (including a $30 million leasehold/asset) to transfer to the city after a final audit and council action.
City legal counsel and outside tax-credit counsel told the City Council on Tuesday that the seven-year compliance period for the Homestead Station New Markets Tax Credit (NMTC) transaction has concluded and that the transaction is scheduled to be unwound this fall. The closing is scheduled for Oct. 2, with a council resolution confirming the city's approval of closing documents to be considered on the Sept. 24 council agenda.
The transaction and the supporting entities Staff explained the NMTC structure used to finance and complete the Homestead Station project. In that structure an investor (Capital One Bank in this transaction) invested through community development entities (CDEs) that placed funds into a qualified active low-income community business (commonly called the QUALICB). The qualifying entity in Homestead was created by the council in 2018 via Resolution 2018-06-62 to facilitate gap financing for the project.
Timing and mechanics explained Counsel said the NMTC compliance period began in February 2018 and has now reached its end. Per the original transaction documents, the investor is…
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