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IPED Historic Tax Credits For

Developers

Artspace• Was founded in 1979 as an

advocate for the space needs of artists in Minneapolis’ historic Warehouse District

• Is now the nation’s leading nonprofit real estate developer for the arts

• Has completed 21 projects nationwide

• Has 3 projects under construction

• Has 12 projects in development

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Development Criteria

We accept projects that:

• reclaim areas that present redevelopment challenges to a city

• have strong community leadership

• involve buildings or land with significant historical context

• are located in areas with vital artist communities

Financing Tools• Permanent mortgage lenders• Low income housing tax

credits• Housing finance tools• Historic rehabilitation

resources• Economic development

initiatives• Cultural facility grants• Private sources (foundations,

corporations, individuals)

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Our Projects

• Are fully funded when they open

• Generate positive cash flow• Typically take 3-5 years to

complete• Are self-sustaining• Are owned and maintained

by Artspace to ensure that they remain permanently affordable

Elder Street Lofts

Houston, TX

Project Description

39,000 square foot historic rehabilitation

Completed: 2005

34 Low Income Live/Work Housing Units5-Studios15-1 Bedroom Units10-2 Bedroom Units4-3 Bedroom Units

Project Motivation

1. Arts Facility Development

2. Neighborhood Development

3. Historic Preservation

Financing Structure

Source Amount Notes

First Mortgage 900,000$ ConventionalSecond Mortgage 500,000$ City CDBGThird Mortgage 56,000$ CountyFourth Mortgage 100,000$ FoundationFifth Mortgage 553,000$ Sponsor Loan 1Sixth Mortgage 497,000$ Sponsor Loan 2General Partner Capital 291,200$ Deferred Developer Fee 286,562$ Historic Tax Credits 1,015,929$ 15.76%Low Income Hsg Credits 2,245,638$

Total Funding Sources 6,445,329$

Lessons

•Historic Preservation can generate significant charitable support•Archeology is a big deal•Manage design/engineering/construction changes closely to avoid Part 3 problems•Preservation projects can be transformative

Artspace Buffalo

Buffalo, NY

Project Description

Historic Rehab/New Construction Artist Housing

Completed: 2007

60 Live/Work Dwelling Units36 Rehab Units24 New Construction Units

6-Studio Units26-One Bedroom Units22-Two Bedroom Units6-Three Bedroom Units

36-Low Income Units24-Market Rate Units

13,000 SF Commercial Space

Project Motivation

1. Economic Development

2. Neighborhood Development

3. Arts Development

Financing Structure

Source Amount Notes

First Mortgage 575,000$ ConventionalSecond Mortgage 1,800,000$ State HTFThird Mortgage 1,100,000$ HOME (City)Fourth Mortgage 1,240,079$ Sponsor LoanHistoric Tax Credits 1,833,414$ 11.14%Federal Low Income Credits 7,273,265$ State Low Income Credits 2,639,736$

Total Funding Sources 16,461,494$

Lessons

•Beware when mixing historic rehab and new construction•Two sets of construction risk•Different design and construction expertise•Sequencing issues

•New construction on a historic site often involves brown field •Mixing historic rehab with new construction provides product differentiation