New Market Tax Credits Introduction

Who Has NMTCs CDE’s seek eligible projects that have a financing gap A CDE is a mission driven for profit company approved by the Treasury that invests in projects that have a strong community impact CDE’s have a specific investment footprint that range from City specific to national CDEs select the type of projects they will specialize in

Benefit to project NMTCs provide between 17%-19% net equity to a project NMTC equity is in the form of an interest-only loan for 7 years Loan can be converted to equity after compliance period Increases amount of borrower equity

Total Project Cost $10,000,000 Tax Credit Percentage Per Regs 39% Gross Tax Credits $3,900,000 Tax Credit Price $.80 Gross Tax Credit Equity to Project $3,120,000 CDE Fees @ 3% $300,000 Legal/Accounting/Modeling $200,000 Total “Equity” at Closing $2,620,000 Total Soft Loan $2,620,000 Estimated Cost of Capital Annually = 80 bps $80,000 Total Cost of Capital $560,000 Tax Returns and Audits $70,000 Net Net Benefit $1,990,000

Parameters of projects Projects must be located in distressed or highly distressed census tracts 20% poverty (30% Poverty for Highly Distressed*) Median family income below 80% AMI High migration rural county, median family income below 85% of statewide median income Typical project minimum size is $5 million

Project impacts Creating quality living wage jobs in low-income communities 5-10 jobs per $1mm of allocation Assisting minority, women-owned and low-income community businesses Offering flexible or below market lease rates to tenant businesses Providing goods and services in low-income areas Improving access to healthy and affordable food options Improving environmental sustainability Pioneering developments that will catalyze additional private investments in the community Public/Private partnerships

Common Projects Commercial offices and retail Mixed-used properties Factories and industrial/manufacturing facilities Community centers Educational facilities Health-related facilities – FQHCs, CAHs

Challenge to Lenders No direct mortgage Lender has a pledge of the investment fund’s interest in the sub-CDE 7 year forbearance NMTCs must be continuously investor for 7 years Reinvestment risk 7 year term

Rooks County Health Center

Rooks County Health Center Located in Plainville, KS Population 3,028, 11.4% Poverty, Tract Income of AMI 77.4% Rural Designation Critical Access Hospital Serving 5 Counties

Project Construct a 3 phase expansion Nuclear medical suite Physical therapy and outpatient services Renovate interior

Sources and Uses $1,300,000 Capital Campaign $7,000,000 USDA Direct Loan $2,590,380 NMTC Equity -$1,154,900 Fees and 7 year cost of capital $9,735,480

Contact information Chris Vukas Director of Economic Development Sunflower Development Group/ Sunflower Community Investments 1520 Grand Boulevard, Floor 2 Kansas City, MO 64108 cvukas@sunflowerkc.com 816-581-3996