I have a deal I'm trying to qualify and would appreciate BOLers input.

$28MM deal to convert 2 high-rise buildings into upscale apartments. The deal has qualified for Historic Tax Credits and is located within a low-income census tract (not distressed or underserved). How might I go about qualifying this as economic development? Could I make the case that the project will substantially improve the tax-base for the area and tract? The deal does not fall inside opportunity or enterprise zones.

Thanks,
Norm

We had a similar situation where there was an abandoned building in a downtown low income tract. It was being converted to apartments (not meeting the affordable definition). We are going to submit it under the revitalization and stabilization of a LMI tract CRA "hook." We're not having our exam until this fall, so I don't know if that will fly. Our reasoning is based on a building that was minimally used to one that would provide housing units, something sorely needed in our area, plus the tax based increase and reducing blight. We'll probably throw in a comment that having a place to house workers locally will encourage additional business investment in the low income tract.

I would throw it against the wall and see if it sticks. A lot will depend on your examiner, as I've noticed they have very broad discretion on what they consider CD.

Thanks, Matt. On its face, the bank would probably pass-absent CRA. So we may punt without some definitive conclusion.

Norman - I have little to add, but I was just curious. When you said "$28MM deal to convert 2 high-rise buildings into upscale apartments", what exactly are these buildings used for now? Are they vacant, office buildings, or currently housing?

Vacant office buildings. We punted the deal already. If you have a spin, I'd be happy to hear it.

No additional spin. I was just wondering on the current use in terms of economic development. If the buildings were currently used for housing and you were displacing any low-mod housing units available, that would be a tough sell. If the deal went through, then I would take the route that TMatt outlined and see if the spaghetti stuck to the wall.