Developing Imaginative Strategies for

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Developing Imaginative Strategies for

• Higher Education Institutions to Capitalize
• on the New Markets Tax Credit Program
• June 28, 2007
• Michael J. Goldman, Nixon Peabody, LLP
• Robert K. Jenkins, Hampton Roads Ventures, LLC
• James D. Howard, Jr., TransCapital / Dudley
  Ventures
• Robert Fenning, Old Dominion University

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• Robert K. Jenkins
• Hampton Roads Ventures, LLC

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• Providing Creative Financing Solutions for
  Innovative
• Real Estate Projects

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• Hampton Roads Ventures is a community development
  investment firm. We
• partner with public, private sector and
  non-profit community development
• organizations to attract private sector
  investment capital for innovative real
• estate projects in lower income neighborhoods,
  particularly inner city and rural
• communities. Staffed by experienced community
  economic development
• professionals, Hampton Roads Ventures is
  extremely sensitive to the unique
• opportunities, challenges and constraints facing
  public sector and non-profit
• community development agencies.

? Educational Authorities ? Municipal
Governments ? Empowerment Zones ? Redevelopment
Authorities ? Community Development
Corporations ? Inner City Real Estate
Developers Investors
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• Our Hampton Roads Ventures Wall Street Equity
  Sharing Fund
• provides smaller real estate developers the
  opportunity to partner with major institutional
  investors to develop and own substantial real
  estate projects in their communities.

Hampton Roads Ventures Wall Street Equity
Sharing Fund
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Historic Tax Credits

• Hampton Roads Ventures assists community
  developers to avail state and federal historic
  rehabilitation tax credit programs to help
  finance the preservation and
• adaptive reuse of eligible older buildings.

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New Markets Tax Credits

• Hampton Roads Ventures was awarded
• two allocations of NMTC one in 2003
• and another in 2005. We were the first
• organization in Virginia to receive an
• allocation of NMTC. We are the only
• organization in Virginia and among
• only a handful in the country to have
• received more than one allocation
• and the first firm in the country to
• develop a successful strategy to
• combine NMTC with tax-exempt bond
• financing.

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• Examples of Properties Assisted by
• Hampton Roads Ventures, LLC

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Henry Street Historic District, Roanoke, VA
Strand Theatre/Culinary Arts School

• Brief description of the project
• Adaptive reuse redevelopment of an 83-year
• year old historic theatre that housed the
  offices of
• celebrated African American film maker Oscar
• Micheaux in the 1920s, into a state of the art
  
• culinary school with catering and banquet
  facilities
• to be administered by the Roanoke Higher
• Education Center, a consortium of 14 Virginia
• colleges and universities.
• Project is located directly across the street
  from
• the Dumas Center for Artistic Development in a
• municipal designated Virginia Redevelopment area
• with a poverty rate of 40.37 that has also been
  
• designated as a HUD Enterprise Community and an
  SBA HUBZone.

Brief description
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Old Dominion University Springhill Marriott,
Norfolk

• Brief description of the project
• Development of a 110 room Marriott Springhill
  Suites
• hotel to be developed adjacent to Old Dominion
  University
• Project is located in a community with median
  household
• incomes of 39 of the area and a poverty rate
  of 36 that
• has been designated as a HUD Enterprise
  Community
• and an SBA HUBZone
• Developer/Operator has committed to co-sponsor
  a
• workforce development initiative, in
  partnership with local
• housing authority and Empowerment Zone
  to train and hire
• public housing residents for hotel
  positions
• Project is an integral component of a
  comprehensive
• redevelopment initiative administered
  by the Norfolk
• Redevelopment and Housing Authority

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• Hampton Roads Ventures believes hotels to be
  major catalysts for both job
• creation and community revitalization. We offer
  highly flexible and innovative
• financing products to encourage the development
  and/or redevelopment of
• both limited service and full-service hotels.
  Our strategies are designed
• specifically to maximize the amount of financial
  resources available to hotel
• owners and developers while simultaneously
  minimizing the financial risk to our
• investors.

Hospitality Financing
We are members of the National Association of
Black Hotel Owners, Operators Developers
(NABHOOD).
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• Robert Jenkins
• Hampton Road Ventures, LLC
• 201 Granby Street
• Suite 1200
• Norfolk, VA 23510-1812
• Ph. [phone]
• Fax [phone]
• Email info_at_hamptonroadsventures.com
• Miami Partnership Office
• 1221 Brickell Avenue
• Suite 900
• Miami, Florida 33131
• Ph. [phone]
• Fax [phone]

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• James D. Howard, Jr.
• TransCapital / Dudley Ventures

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Investing in Tax Advantaged College and
University Facilities

• TransCapital is a 30 year old specialized
  financial services firm which has raised
• over 10 billion in tax advantaged transactions.
  TransCapital offers financial
• structuring expertise, equity, debt and
  investment opportunities in the following
• tax credit programs
• Federal Low Income Housing
• State Low Income Housing
• New Markets Tax Credits
• Federal Historic Tax Credits
• State Historic Tax Credits
• Renewable Energy Tax Credits

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Investing in Tax Advantaged College and
University Facilities

• TransCapital's Involvement in the NMTC Program
• TransCapital has been extensively involved in the
  
• NMTC Program since its inception
• Successfully supported NMTC applicants which
• have received in excess of 2 billion in
  allocations
• of New Markets Tax Credits.
• Structured, marketed and closed NMTC funds with
• committed debt and/or equity in excess of
• 400,000,000 of QEIs.
• Closed QEIs utilizing leveraged and non-leveraged
  
• structures including tax-exempt bond financing.
• First NMTC Go Zone transaction closed in
• January of 2007.

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Investing in Tax Advantaged College and
University Facilities

• New Markets Tax Credits and Development
  Opportunities with Colleges and Universities
• Strong Sponsorship 
• Significant Community Impact 
• Public Private Partnerships Expanding
• in this Sector 
• Pre-existing Debt Financing Sources 
• Growth Marketplace

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Investing in Tax Advantaged College and
University Facilities

• Investor Perspectives on Hampton Road Ventures
• ODU Transaction
• Underwriting the Project and Sponsors 
• Tax Exempt Bond Component and the
• Attendant Benefits 
• Credit Enhancement to the Senior
• Debt Provided by the
• New Markets Tax Credits 
• Community Impact and Visibility

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Investing in Tax Advantaged College and
University Facilities

• James D. Howard, Jr.
• jhoward_at_transcapitaltaxcredits.com
• 2930 East Camelback Road, Suite 215
• Phoenix, AZ 85016
• Phone [phone]
• Fax [phone]

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• Robert Fenning
• Old Dominion University

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THE UNIVERSITY AS DEVELOPER(New Market Tax
Credits)

• Old Dominion Profile The University Village
• Getting Started - Why? Who? How?
• Critical Issues/Elements
• Project Profile(s)

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OLD DOMINION UNIVERSITYUniversity Profile

• 22,000 Students
• Carnegie Research Extensive University (67M/Yr)
• Forbes Cyber University
• Top Programs
• Modeling Simulation
• Oceanography
• Nuclear Physics
• Engineering Management
• Historically a Commuter Campus, Although More
  Than 6,000 Students Live Within Walking Distance
  of the Norfolk Campus

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OLD DOMINION UNIVERSITYStrategic Plan 2005-2009

• Become Top 100 Research University
• Create a Viable, Lively Campus Community
• FIND THE MEANS NECESSARY TO ACCOMPLISH THE GOALS

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OLD DOMINION UNIVERSITYREAL ESTATE FOUNDATION

• 501(c)(3)
• Purpose to receive, administer, and distribute
  funds and property of all kinds exclusively in
  furtherance of the objectives of the University
• Formed in 1994 in Anticipation of University
  Village Development
• 13 Members (Prominent Members of the Regions
  Real Estate and Financial Community)
• University President Ex Officio
• University VP for Administration Finance
  Executive Director

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UPDATED MASTER PLAN
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PROJECT FORMATION

• 75-Acre/13 City Block Area
• Created Hampton Boulevard Redevelopment Area
• Master Planned Utility/Infrastructure
• Performed Market Demand Economic Impact Analysis

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PROJECT REALIZATIONPublic/Private Partnership

• University 75M
• City of Norfolk / NRHA 15M
• Private Developer(s) 230M
• Total 320M

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OLD DOMINION UNIVERSITYThe University As
Developer Why?

• To Generate Supplemental Revenue Streams
• To Expand the Campus
• To Eliminate Blight or Address Crime
• To Promote Economic Development
• To Prime the Pump (Supplement Market Forces)
• To Provide Co-Curricular Facilities
• To Improve the Competitive Standing (Image)
• To Create a Destination
• To Circumvent State Procedures or Lack of
  Authority

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OLD DOMINION UNIVERSITYThe University As
Developer Who How?

• The University
• The Universitys Real Estate Foundation (Or Other
  501(c)(3)
• CDC
• CDA
• City or Redevelopment Authority
• HOW - As Deep Pocket - As
  Enabler - As Partner - As
  Advocate

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OLD DOMINION UNIVERSITYThe University As
Developer Critical Issues/Elements

• Market Demand
• Land Availability Cost
• Authority
• Structure/Methods
• Financing
• Tax Implications

• Liability/Risk
• Compatibility of Revenue With Mission
• Impact on Other Projects
• Debt Management

EXIT STRATEGY
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SPRINGHILL SUITES HOTEL
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HOTELProject Description

• 115 Rooms (All Suite-Style) and 2 Apartments 5
  Stories
• Café on Ground Floor
• Shared Parking in Adjacent Deck Separate
  Entrance/Exit
• Estimated Cost 8 Million
• Flag Marriott SpringHill Suites

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HOTELSite Plan
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HOTELDevelopment/Ownership

• ODU Real Estate Foundation Contracted for Market
  Demand Study Established Demand for Hotel
• Foundation Issued RFP for Hotel Developer
  Selected BBL Development
• Hotel Design Approved by City of Norfolk and
  Marriott
• Foundation Ground Leases Land to BBL BBL
  Construct/Own/Manage Hotel
• Construction Starts Late 2006 Expected
  Completion Fall, 2007

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HOTELFinancing

• Developer Responsible for Financing
• Developer Received Approval to Issue Empowerment
  Zone Bonds from Cities of Norfolk and Portsmouth
• Developer Received New Market Tax Credit Funding
  With Norfolk Redevelopment Housing Authority
  (Hampton Roads Ventures)

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OLD DOMINION UNIVERSITYThe Mast Center

• 50,000 sf Regional Higher Education Center
• 50,000 sf Commercial Building
• Virginia Modeling, Analysis Simulation Center
  (VMASC)
• Anchor for 9 Building Tech Park
• Component of 130 Area Mixed Use Development

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OLD DOMINION UNIVERSITYProject Development

• RFQ/RFP Design/Build Process
• University Purchases Higher Education Center
  Leases VMASC Building
• 3rd Party Developer Finances, Designs Buildings
  Project(s)

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OLD DOMINION UNIVERSITYProject Financing

• University Leveraged 6.2M (State GOB Proceeds)
• Developer Obtained City Development Grants (1.2M
  Portsmouth 1.8M Suffolk)
• Developer Equity
• New Market Tax Credits

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OLD DOMINION UNIVERSITYNew Market Tax Credits
Issues/Opportunities

• Complexity
• Development Group
• Boards
• Counsel(s)
• Market Based (Must be Economically Sound)
• If Sound, Minimal Risk
• Low Hanging Fruit
• Get Started Early
• Developers (vs. Companies/Retailers/etc.) are
  Most Interested
• It Can Make the Deal Work