Financial Roundtable Association of Defense Communities Redevelopment Conference Monterey, CA September 30, 2019 Craig Seymour RKG Associates, Inc. Boston, MA & Alexandria, VA

Framework for Funding and Financing New Development, Redevelopment & Special Projects Economic Development is ……. Creating jobs Enhancing tax base Attracting companies Retaining companies Retaining and Enhancing our Military Assets Who Benefits? The military department The community (local, regional, state) What is the “Project” Supporting infrastructure Attracting and Retaining key suppliers Reuse of BRAC facilities Realignment for new/enhanced missions

Funding vs. Financing Funding is the source of monies used to pay for different elements of an economic development “project” Financing is about how the cash flows are structured to achieve the sponsor’s goals and objectives A source of funding must be in place before financing options can be applied Funds can be provided by: Public – grants, bonds, tax revenues, ….. Private – debt, equity Hybrid – P3, P4

Public Funding Special Assessments Other sources of revenue Taxes General Fund Revenues Property taxes Sales and Income taxes Other special or dedicated taxes Special Assessments e.g. Business Improvement Districts Impact fees Other sources of revenue Surcharges, RE Transfer tax

Private Funding Equity and Debt Value Capture Incentives Most seek to leverage public monies ROI driven Value Capture Tax Increment Financing New property tax revenues to support debt New income and/or sales tax revenues Incentives Density bonuses Tax incentives Abatements Shared costs (of infrastructure) Social incentives (e.g. affordable housing or job creation)

Financing Options Public Private Municipal Bonds Grants Tax-exempt/public purpose – Federal, State, Local Taxable/private purpose – more expensive Recourse/Non-recourse to underlying jurisdiction Grants MassWorks, EDA, HUD Favorable Loan programs HUD, EDA, other agencies Environmental/Green Bonds Private Equity Developer vs. Pension Funds Philanthropic Investors Debt Traditional bank loans, bonds Credit assistance programs Financing Options