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Kutak Rock Uses “First in the Country Financing Structure” to Complete $51M Development Project

News | November 16, 2020


Kutak Rock recently completed a $51M+ development project in the heart of the historic Over-The-Rhine neighborhood in downtown Cincinnati, Ohio. The 136,117 gross-square-foot project consisted of 20 buildings, including new, historic, commercial, residential and mixed-use properties across eight scattered sites.  

The project is the first in the country using an original financing structure that utilized 14 different funding sources, including federal and state New Markets Tax Credits (NMTC), federal and state Historic Tax Credits (HTC), Low-Income Housing Tax Credits (LIHTC), Opportunity Zone investments, conventional debt, Neighborhood Stabilization Program funds and City funding.  

Kutak Rock represented the developer and affiliated lending, leasing and operating entities, and touched every aspect of the transaction, making it necessary to address the unique requirements of the various, competing funding sources.

The project has received notoriety and praise in the Cincinnati area from business leaders, politicians, journalists and  social leaders, acknowledging that “the project not only comes at a time when the world is in the midst of a pandemic, the Cincinnati area is also in the midst of an affordable housing crisis.” 

This transaction used the following types of funding, which have never been used together in a single transaction: 

  • Ohio historic preservation tax credits
  • Federal historic rehabilitation tax credits
  • Ohio new markets tax credits
  • Federal new markets tax credits (loans and equity from four unrelated community development entities and quality equity investments from three different banks)
  • Low-income housing tax credits
  • Opportunity Zone (two Ozone transactions)
  • City funding
  • Conventional debt (senior and subordinate)
  • NSP funds (soft loans) (The Community Builders loan)

Kutak Rock partner Carol Mihalic and associate Judd Larson in the Denver office worked on this financing structure. They were assisted on the low-income portion of the financing by Denver partners Melissa Bleser and Mark Maichel. Kutak Rock partners Scott Neill from the Omaha office and David Lu from the Washington, D.C. office added support.