Historic Tax Credits -
The New Frontier
June 5- 6, 2014
To download presentations from this conference, click here.
The IRS guidance on Historic Boardwalk Hall (Revenue Procedure 2014-12) has been
a game changer for the historic tax credit (HTC) industry. Compliance with the Safe
Harbor created by the Rev. Proc. is essential to deal structuring in the HTC space.
The first waves of Safe Harbor–compliant deals have closed, and the industry
is wrestling with some aspects of the guidance that have proven to be difficult
to apply in practice. Experienced investors, developers, and practitioners on the
front lines of today’s HTC transactions will gather in Chicago to take a comprehensive
look at the current environment and lessons learned from the first generation of
Safe Harbor–compliant transactions, including:
- Structure Risk. Investors now take structure risk, but what does this really
mean? What can be guaranteed, and how damages for lost credits can be measured without
running afoul of the Safe Harbor. How have pricing and deal terms responded to the
new risk allocation?
- Developer fees, management fees, incentive fees, lease terms, and other arrangements.
They all must be reasonable compared to fees, lease terms, or other arrangements
for non-HTC real estate developments. How are investors underwriting this requirement?
- Combining HTCs with New Markets Tax Credits, Low Income Housing Tax Credits,
and loans from affiliates. What is a separately negotiated, distinct economic
arrangement, and how can you show it?
- Timing and amount of capital contributions. How much must be fixed? What
can be adjusted? How are phased rehabs being dealt with?
- Flips and exits in the new environment. What are the different ways that
they can be handled? Also, the issue of 50(d) income is now squarely out in the
open. Where does the IRS stand on guidance?