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Board authorizes chair to close New Markets Tax Credit exit for East Topeka Learning Center
Summary
JADA authorized its chair to take actions needed to complete the exit from a seven-year New Markets Tax Credit compliance period for the East Topeka Learning Center (Washburn Tech East), allowing local ownership of the project once investor interests are unwound. Staff said exit costs are expected to be about $35,000.
The JADA board voted May 14 to authorize the board chair to take the actions necessary to close a New Markets Tax Credit (NMTC) transaction tied to the East Topeka Learning Center, the project that renovated the former armory into Washburn Tech East.
Jeff White of Columbia Capital, joining by Zoom, gave a summary of the transaction and the steps required to unwind the NMTC structure as the seven-year compliance period ends in July. “By the time we are done, hopefully by July or maybe by mid-August, everything above the bottom three gray boxes will go away,” White said, describing the legal and financing structure that brought external tax-credit equity into the project and will be dissolved on exit.
White estimated the transaction exit costs at around $35,000 and said the process will allow the outside investors, including PNC Bank as investor, to exit the structure and leave the long-term economic benefit in local hands. He said JADA’s initial roughly $4.5 million investment was matched by about $3,000,000 in tax-credit equity at the time of the original transaction.
Board members asked whether the board had its own tax adviser for the transaction; White said outside counsel that participated in the 2017–2018 transaction will assist on the exit and that he was not providing tax advice. Councilman Duncan moved to approve the resolution; Commissioner Cook seconded. The clerk called roll; the resolution passed 6–0.
White and staff said local decisions about future programming or additional buildings at the East Topeka Learning Center are separate and need not be made at this meeting; the resolution authorizes the steps necessary to effect the NMTC exit so that the project remains locally controlled after the investor exit.
