Hartford Business Journal

www.HartfordBusiness.com • February 12, 2018 • Hartford Business Journal 7 ing units. By yearend 2017, more than 12,000 units had been built, with 11,300 more units under construction or in various phases of development, state officials said. According to the governor's homepage, in 2012 he unveiled a 10-year housing revitalization plan and pledged $300 million in fund- ing. Much of that funding has come through companies' and investors' purchases of state and federal hous- ing tax credits. In the months of fiery debate leading up to Congress' reworking of the federal tax code in December, to spur corporate investment and job creation, there was un- certainty among housing inves- tors and their financial advisers about the fate of LIHTCs, Kilduff said. As early as Nov. 2016, the U.S. hous- ing community had begun devaluing LIHTCs amid expectations that a federal tax cut, or changes in tax laws or deductions, might ebb demand for housing credits, he said. The result was that projects that calculated housing tax credits into their financing had to tap other sources to fill the gaps. "There was a hit to projects last year,'' Kilduff said. State credits The state Department of Economic and Community Department man- ages the state's popular Historic Rehabilitation Tax Credit Program. In the past four to five years, the state has approved minimum 25 percent tax credits for some 30 to 35 appli- cants to refurbish mixed residential or non-residential buildings. The program yearly receives a $31.7 million credit allotment, from which eligible recipients can collect up to $4.5 million per project, said Julie Car- melich, who oversees the program. Carmelich said it is too early to gauge fallout from tax reform on demand for the historic rehab tax credit. "We're kind of in a wait-and-see situation,'' she said. "I don't know when it's going to shake out.'' In Hartford, the Capital Region De- velopment Authority (CRDA) has not relied in the past — nor is it likely in the future — on housing tax credits to assist developers with financing many of their office-to-apartment conversions that have trans- formed down- town in recent years, said Executive Direc- tor Michael Freimuth. CRDA and its development co-partners, however, have used federal historic tax cred- its to readapt qualified, older office and commer- cial buildings to other uses, mainly housing, Freimuth said. Tax reform eroded the value of those credits by prolonging the payback period from one to five years, but down the road, CRDA expects, he said, to be involved with more new, "infill" construction in Hartford's neighborhoods, rendering those historic credits useless to them. However, Freimuth, who has spent decades in economic development in Connecticut and New York, and others said the financial impact on LIHTCs from tax reform is inevitable. "The tax reform act inheritably lowers the value of federal credits,'' Freimuth said. "Simply by lowering the corporate rate, the relative value of the deduction is lowered. The net effect is that the credits are priced downward when purchased/sold, thereby reducing the amount of eq- uity that can be raised for a project. This in turn leaves a gap in project financing." Low-Income Housing Tax Credit awards Here is a list of Greater Hartford area properties that were awarded Low-Income Housing Tax Credits in 2015 and 2016. These projects are all very different, from old manufacturing buildings to revitalizing existing properties to new construction. 2015 LIHTCs Avery Park, Stafford 79 units $11.1 million in net equity proceeds Old Talcottville Mill, Vernon 83 units $5.7 million in net equity proceeds Billings Forge, Hartford 112 units $4.6 million in net equity proceeds 2016 LIHTCs 616 New Park, West Hartford 54 units $11.6 million in net equity proceeds Casa Nueva, Hartford 107 units $4 million in net equity proceeds Sheldon Wyllys, Hartford 79 units $2.2 million in net equity proceeds Squire Village, Manchester 379 units $27 million in net equity proceeds Willow Creek, Hartford 62 units $18.6 million in net equity proceeds Source: Connecticut Housing Finance Authority Julie Carmelich, Historic Tax Credit Coordinator, CT Historic Preservation Office Michael Freimuth, Executive Director, Capital Region Development Authority NOMINATE AN OUTSTANDING C-LEVEL EXECUTIVE TODAY! DEADLINE APRIL 9, 2018 WWW.HARTFORDBUSINESS.COM/OUREVENTS GO TO C-SUITE AWARDS TO NOMINATE CEO Chief Financial / Operating / Administrative Offi cer Chief Technology / Information / Security Offi cer Chief Human Resources / Diversity Offi cer Chief Marketing Offi cer / Administrative Offi cer / Security Offi cer / Diversity Offi cer CATEGORIES

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