Twinning Historic Tax Credits and New Markets Tax

Twinning Historic Tax Credits and New Markets Tax Credits Charlie Werhane Vice Chairman/COO Enterprise Community Investment, Inc. November 8, 2007

Enterprise NMTC Portfolio Overview § $515 million in allocations § 26 NMTC investments closed § 12 projects include the twinning of HTC and NMTC: § Broad product mix 2

Enterprise Portfolio Closed HTC/NMTC Transactions 47% HTC/NMTC 53% Non HTC/NMTC 340 mm 3

Project Impact Examples § § § 4 Old Post Office – St. Louis, MO Fashion Square – St. Louis, MO Drury Hotel – San Antonio, TX Oak Street School – Buffalo, NY Court Square Center – Memphis, TN

Court Square Center 5

Court Square Center 6

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Sources and Uses: ($ in millions) Sources: § § § § A Loan (Perm. Loan) B Loan (Sec. 108 Loan) C Loan (BEDI Loan) D Loan HTC Equity NMTC Equity Insurance proceeds Other Total: 8 Uses: $8 $8. 5 $2 $. 2 $6. 3 $11. 3 $9. 1 $5. 6 Site Acquisition $1 Hard Costs $31. 7 Soft Costs $6. 8 Other $11. 5 $51 Total: $51

NMTC Equity generated by twinning HTCs and NMTCs § Total Federal HTC Equity (based off of QREs) is $6. 3 MM * § Total Loans and Equity infused into project generating NMTC: § A Loan (Perm. Loan) § B Loan (Sec. 108 Loan) § C Loan (BEDI Loan) § D Loan § Federal HTC Equity § NMTC Equity boost to project on HTC approx. 9 $8 MM $8. 5 MM $2 MM $6. 3 MM * $2 MM

Complexity 10

ESIC has implemented the organizational structure to allow investors to take full advantage of the New Markets Tax Credit.

Example of a Master Lease Structure - 1 Investment Fund HTCs, NMTC, Distributions $ QEI Enterprise Allocatee Enterprise CDE Allocation Debt Service $ QLICI Loans Developer 12 HTCs Equity $ Equity Landlord Equity/Property $ QLICI Subtenants Master Tenant

Example of a Master Lease Structure - 2 13

THANK YOU 14