1. New Markets Tax Credits Presentation to National Association of Local Housing Finance Agencies By Tyrone Rachal, Invest Atlanta

2. Our Vision is to make Atlanta the most economically dynamic and competitive city in the world. 2

3. New Markets Tax Credits Background Enacted by Congress in 2000 to drive private sector investment to urban and rural communities with high rates of poverty and unemployment NMTC uses the incentive of a federal tax credit equal to 39% of an investment over a seven year period –5% tax credit in years 1-3 –6% tax credit in years 4-7 NMTC’s are delivered by Treasury-certified Community Development Entities, who compete for NMTC Allocation Authority

4. New Markets Tax Credits How It Works Community Development Entities awarded NMTC Allocation provide loans to developers and businesses with non-traditional terms –Debt with below market interest rates –Longer than standard interest-only loan payments –Longer than standard amortization periods –Higher than standard loan to value ratios Eligible Uses: Commercial, Industrial, Manufacturing, For-Sale Housing and Mixed-Use Not Eligible: 100% Rental Housing, “Sin” Businesses

5. New Markets Tax Credits Guidelines for Mixed-Use Projects with Housing Minimum RequirementIndustry Standard Housing income restrictions are not required but encouraged for NMTC projects. Typically at least 20% affordable to persons earning 80% area median income

6. New Markets Tax Credits Program Activity YearNMTC AllocationAwards 2009$5.0 billion99 2010$3.5 billion99 2011$3.6 billion70 2012$3.5 billionTo be determined 2013$3.5 billionTo be determined

7. NMTC Investments ($ in billions)

8. New Markets Tax Credits Atlanta’s Eligible Areas for NMTC Investments

9. Atlanta Emerging Markets, Inc. Invest Atlanta’s Community Development Entity NMTC Investments Aerotropolis $30 million 200 Peachtree $12 million GA Aquarium $25 million Civil Rights Ctr $13 million $80 million NMTC Allocations 2007 $60 million 2008 $20 million Total $80 million

10. New Markets Tax Credit Transaction Aerotropolis Atlanta $30 million mezzanine loan for $96 million project in May 2009 Acquisition, demolition and remediation of 122-acre Ford auto plant Largest Brownfield project in Georgia, paved way for redevelopment 400 annual permanent jobs estimated Tax Credit Investor: Capmark Finance

11. New Markets Tax Credit Transaction 200 Peachtree – Macy’s Building Redevelopment $12 million mezzanine loan for $45 million project in July 2010 Conversion of historic Macy’s building into special event center Includes restaurants, banquet hall, meeting rooms, business incubator 623 annual permanent jobs created Tax Credit Investor: Fifth Third Bank

12. New Markets Tax Credit Transaction Georgia Aquarium Expansion CDE: Atlanta Emerging Markets, Inc. $25 million mezzanine loan for $120 million project in December 2010 Expansion and renovation of aquarium exhibits and facility Includes new dolphin exhibit, space for educational programs 478 annual permanent jobs created Tax Credit Investor: Wells Fargo Bank

13. New Markets Tax Credit Transaction National Center for Civil and Human Rights CDE: Atlanta Emerging Markets, Inc. $13 million NMTC loan for $65 million project in January 2013 New 42,000 square foot facility for exhibit and conference space Leverages $32 million in fundraising Creates 300 permanent jobs Tax Credit Investor: PNC Financial Services

14. Project receives 7-year loan with interest-only payments Portion of loan converts to a grant at end of loan term. Debt: Bank Loan or Charitable Contributions Equity: Tax Credit Investor Contribution CDE and Leverage Investment Fund Common NMTC Deal Structure Combination of Debt and Equity

15. New Markets Tax Credits Sample $10 Million NMTC Transaction NMTC Investor (100%) Leverage Fund LLC CDE PROJECT / QALICB CDFI Fund (Department of Treasury) $7.2 million loan @ 6% interest $2.8 million Equity NMTC $3.9 million Tax credit price = 72 cents $10 million Equity (generates NMTC) Certification of CDE Allocation of NMTC credits $7.2 million A Loan @ 6% interest Lender Managing Member (0.01%) $2.3 million B Loan @ 1% interest $500,000 Sponsor Fee 99.99% CDE member Collateral: pledge of 99.99% CDE membership 7 year forbearance

16. New Markets Tax Credits Key Considerations Ideal Deal Size ($8 million and up) Transaction Costs Community Impacts (e.g. Job Creation, Services) NMTC can Leverage Grants, Donations and Equity Federal Program Seeks Reauthorization in Dec 2013

17. Atlanta Emerging Markets, Inc. Contacts Tyrone Rachal, President –404.614.8339 –trachal@investatlanta.comtrachal@investatlanta.com Dale Royal, Vice President –404.614.8336 –droyal@investatlanta.comdroyal@investatlanta.com For more information, visit our website: www.InvestAtlanta.com