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REGULAR MEETING OCTOBER 14, 2013 <br /> <br /> <br /> <br /> <br /> <br />Nick Surak: co-developer of the project. <br /> <br />Councilmember Schey ok, if awarded these tax credits and are you selling the tax, filing for the <br />tax credits based on an $8.5 million dollar project or a $6.4 million dollar project? <br /> <br />Nick Surak: the total project cost is just under $8.5 million but the hard cost is about $6.3, $6.4. <br /> <br />Councilmember Schey so if awarded these tax credits, I mean this is an assessment vehicle that <br />probably a lot of folks here tonight might not be all that familiar with how, much would you <br />anticipate these tax credits will sell for on the market? <br /> <br />Nick Surak: you know I would say in this matter you’re probably going to get 87, 88 cents on the <br />dollar. <br /> <br />Councilmember Schey so you will be getting perhaps a couple million dollars. <br /> <br />Nick Surak: yeah, we will be requesting a little more than $8.5 million tax credits so; you would <br />probably look to leverage you know a little less than $8 million in equity in that. <br /> <br />Councilmember Schey Englewood Corporation, because we are talking that we have been <br />repeating ourselves that this is private money, it’s your company that is going to receive the $8 <br />million dollars correct? <br /> <br />Nick Surak: no that is incorrect. <br /> <br />Councilmember Schey the NNN is going to receive $8 million dollars from the sale of these tax <br />credits? <br /> <br />Nick Surak: no, what we are going to have is a limited partner set up that is the recipient that is <br />the recipient of the tax credits and what you do is you take on an investment partner and equity <br />partner, they will receive the tax credits. <br /> <br />Councilmember Schey this limited partnership, is going to be a for-profit entity? <br /> <br />Nick Surak: yes, in tax credit development like this and this is true across the country most <br />commonly the investor is a larger financial institutions or insurance companies and another way <br />to do that is by another federal law called the community investment act and those are the most <br />common investors in these type of projects for example we most recently completed one in <br />Phoenix and our investor was Bank of America. <br /> <br />Councilmember Schey who will be the and I apologize these are complex investment vehicles <br />that I am not rich enough to be buying tax credits so I don’t know about these types of things, <br />you would have to have a pretty sizeable income for this type of thing. So anyway this limited <br />partnership who will be the principals of this limited partnership and who will be guiding this <br />LLC. <br /> <br />Nick Surak: there are two components to a limited partnership, a general partner and a limited <br />partner. The general partner has operational control that will be Near Northwest, the limited <br />partner is an equity partner they provide the financing basically equity and they basically sell it <br />other than that they reap the economic benefit in investing in the property but as far as day to day <br />control and decisions when it comes to property management or development that resides with <br />the general partner which would be Near Northwest. <br /> <br />Councilmember Schey so Karen, I worked with an attorney as I was drafting, as I was reviewing <br />something of things that came before us and some of the questions that the attorney had asked <br />was how, please explain how this project does not detracted from the not-for-profit status of the <br />NNN, will the project remain part of a not-for-profit operation or will it become a for-profit <br />operation? <br /> <br />17 <br /> <br /> <br />