1. National New Markets Fund, CDE Deborah La Franchi, CEO Strategic Development Solutions Monica Edwards, Managing Director Strategic Development Solutions Belden Hull Daniels, CEO Economic Innovation International, Inc.

2. 2 National New Markets Fund Controlling and Managing Firms Strategic Development Solutions Economic development and fund building consulting firm Deborah La Franchi, Founder and CEO Genesis LA: first CEO; created six Genesis LA Funds ($400m/$1.2b) Former Assistant Deputy Mayor for Economic Development (LA/Mayor Riordan) $2.5b in funds created or under development Monica Edwards, Managing Director, Real Estate Invested $100m in urban-targeted real estate private equity for Citigroup Managed $200m private equity portfolio Economic Innovation International, Inc. Belden Hull Daniels, Founder and CEO $100b of development funds globally over 40 years Partner to SDS in Fund Development

3. 3 II. National New Markets Fund (NNMF): Investment Strategy NNMF: 2006 $25 million GO Zone Allocation Catalytic real estate projects Located in low-income census tracts Mixed-use, commercial, light industrial or for-sale housing. 100% multi-family projects are not eligible Focus on long-term job creation

4. 4 III. National New Markets Fund: Mezzanine Debt Terms $25 million Allocation creates $5 million in subsidy Creative structuring to meet each projects unique needs Debt can be converted to equity to remain in project at exit NNMF hopes to deploy in 1 or more deals within 90 days Typical terms: Below-market rate (< 3.00%) Interest only 7-year terms Loan-to-value up to 100%

5. 5 IV. National New Markets Fund: Deals NNMF has screened 20-30 deals Many are still in the pipeline, but not one has closed yet. Why? Risk: Lack of infrastructure Uncertain ultimate population figures Cost escalation Insufficient subsidy Complexity

6. 6 V. Risk: Infrastructure Basic services: water, power, sewer, hospitals, schools, etc. Rebuilding efforts will then follow infrastructure. Will all communities be rebuilt? If so, when? Federal money has been allocated to these efforts, it has not reached the ground. Time is the enemy: as time goes by fewer to return if progress is stalled.

7. 7 VI. Risk: Ultimate Population? Orleans and St. Bernard Parishes, those hardest hit, are still below 50% their pre-Katrina levels: July 2005 August 2006 Orleans & St. Bernard501,762216,435 Sources: 2005 American Community Survey, 2006 LA Health & Population Survey. How many people will eventually return? Many have returned to metro region, but may not return to New Orleans. Where will they liveDowntown, New Orleans East, Gentilly, Lakeview ?

8. 8 VII. Risk: Cost Escalation Construction labor cost: 43% increase since Q2/2005 ( Source: Louisiana Dept of Labor) Materials cost: 20% increase Insurance premiums: 70-100% increase due to Katrina, Wilma, and Rita Decreased population impacts: Labor shortage: a six-month wait in New Orleans for a construction permit Energy costs: 216,000 vs. 501,000

9. 9 VIII. Risk: Insufficient Subsidy NMTC subsidy alone is not enough to overcome this heightened risk profiletoo many unknowns. Housing is clearly one of the most critical needs, but mixed-use structures can be challenging given the existing population demographics. Combining NMTCs with other subsidies, such as GO Zone Benefits, and/or State NMTCs has proven to be structurally challenging.

10. 10 IX. Risk: Complexity Combining benefits to create more subsidy has proven to be a long and arduous process: Uncertainty: parking in mixed-use structures with GO Zone Bonds GO Zone Bond structure is not understood by many Louisiana State NMTCs only transferable on a case-by-case basis The NMTC structure not understood by many developers

11. 11 X. Example: Downtown New Orleans Office Tower A developer began due diligence to purchase an office tower for conversion to apartments. $100 million project had a $17 million gap that could be bridged with NMTCs. Upon more serious due diligence, the developer found: Significant delays in construction permitting No clear estimate of population post-construction Huge construction labor shortages Lack of coordinated support Project did not pencil at market rents, even with NMTC subsidy.

12. 12 XI. Solutions Increase awareness through: Education, e.g. conferences, technical seminars, etc. Forums linking developers with NMTC Allocatees: The Consortium in New Orleans is one example Industry best-practices newsletters including case- studies of real deals Reduce risk by collaborating on deals to: Create greater subsidy Facilitate greater impact on projects Stay informed regarding local issues

13. 13 Economic Innovation International, Inc Belden Hull Daniels President and CEO 5 Sentry Hill Place Boston, MA 02114-3505 Tel: 617-523-1490 Fax: 617-507-8450 belden@economic-innovation.com Strategic Development Solutions Deborah La Franchi President and CEO Monica Edwards Managing Director, Real Estate 11150 Olympic Blvd. Suite 910 Los Angeles, CA 90064 Tel: 310-914-5333 Fax: 310-914-5337 dl@strategicds.com me@strategicds.com NNMF Contact Information