 Great. Well, welcome everybody and welcome to another webinar in the Forum webinar series. I'm Renee Kuhlman, Senior Director of Outreach and Support in the Preservation Services and Outreach Department and I'll be moderating the webinar today. In case you aren't familiar with the program, the Preservation Leadership Forum is the professional membership program of the National Trust for Historic Preservation. Our webinars are made possible by members of the Preservation Leadership Forum and we sincerely thank each and every member who is with us today. Today's webinar focuses on how state historic tax credits can help repurpose historic buildings to create new units of affordable housing. And before we begin, we would love to hear and type into the chat your level of knowledge. Are you newbie? Are you somebody who's really experienced or are you somewhere in between? So we're very interested in hearing, so if you wouldn't mind sharing in the chat your level of expertise, we sure would appreciate it. Also, in terms of logistics, you are more than welcome to submit questions in the Q&A function directly to the panelists. We will answer them at the end of the webinar as time permits. You're also encouraged to communicate with all of your fellow participants through the chat function like you are doing now if you have specific examples or thoughts you want to share. And I'm pleased to note that the closed captioning function is enabled. And we're going to be sending out a recording of the webinar later today directly to the email that you used to register for this webinar. And all of our forum webinars are archived on our forum webinar library should you wish to share them with others. Next slide. So nationally, we are seeing an uptick in the support for state historic tax credits. In the past three years, four states have created new state tax credits, which is great. While other legislatures like West Virginia saw their credit made permanent or an increase in the overall cap of the program, like in Arkansas. Next slide. Although all 39 credits, all 39 of the state historic tax credits encourage adaptive reuse and therefore help create new units of affordable housing, today we're going to discuss how states are laboratories and how three states, both urban and rural, have crafted their programs to address a lack of affordable housing. Next slide. In many ways, these incentives are modeled after the very successful federal historic tax credit and target properties listed or are eligible for listing on the National Register of Historic Places. And with partners across the country, the National Trust is working to also expand the understanding and guidance of the integrity provision to list properties on the national register to ensure that incentives like state historic tax credits are widely available. I also want to note that there are two bills pending before Congress that would help increase new creation of housing through adaptive reuse. Senate Bill 2266 was introduced last week by Senators Cantwell, Cardin, Collins and Cassidy, say that three times fast. While HR 2294 was introduced in April, which mirrors what was passed in the last Congress's House Infrastructure Bill and currently has 56 cosponsors. We're asking that you would ask your own delegations to cosponsor these two bipartisan bills and also ask that they be included in upcoming infrastructure bills. And any questions about this particular advocacy campaign or the federal historic tax credit, please reach out to my colleague Shaw Sprague or Mike Phillips that the emails listed here. I know they're especially interested in hearing from folks who might have projects that have either been stalled or canceled due to pandemic challenges. Next slide. It's now my great pleasure today to ask our guests who are with us now to share their own experiences and working with state tax credits. And I'd like to introduce the three of them to you now. John Egan currently serves as the chief lending and program officer at the main based Genesis Community Loan Fund. And for today's presentation, he will use his 30 plus years of housing experience to describe how the state's investment is making repurposing buildings possible. Leslie Reed serves as the CEO of the Madison Park Development Corporation, one of the largest community based nonprofit developers in Massachusetts. She also volunteers her time to serve on the board of the Boston Preservation Alliance. Today Leslie will describe how Massachusetts sets aside 25% of its credits for affordable housing projects and the impacts the incentive has on the work of her own organization. And finally we'll hear from Logan Ferguson, who is senior associate with powers and company. As a historic preservation consultant, she has helped clients apply for tax credits in many states but will highlight for us today her experience with the Delaware credit, which provides 10% more credit for depreciable projects that qualify for low income housing tax credits. So John, I'll turn it over to you. Thank you. Great. Thanks Renee. Good afternoon everyone. My name is John Egan. I work at Genesis Fund here in Brunswick, Maine. I sit historically on Wabanaki land, the Dawnland Confederacy and Wabanaki tribe as the historical occupants of this property. I'm going to talk a little bit today about the state historic parallel that Maine uses and specifically about how it can leverage more affordable housing. We are a rural state and so as such we get a very small allocation of low income housing tax credit from the federal government, which is many people in the room, not everybody given the poll, knows that that's the number one tool that the federal government has for production of new affordable housing is also sometimes called LiTAC and I'll try and avoid using the acronyms because in looking at the responses from the poll we have a wide variety of folks that are new to tax credits and people that have been here for many years. So I'll try and navigate somewhere in the middle there with trying to keep it important and focused on what can really be effective but not get too down in the weeds on the acronyms and such. So the state historic tax credit in Maine is celebrating its 10th anniversary of official existence. It was enacted initially in 2008 here but not put into permanent state law until 2011 and right on time our state legislature is actually reviewing it with its program review committee through the legislature and happily that review is going very well because the users and advocates for the program have collected a significant amount of data and stories to show how effective it really is. Next slide. The way that the tax credit works in Maine, very similar to the way it's going to work in many of the states that have a state parallel program, is that the credit is allocated if the project is also eligible under the national register and can get an allocation of the federal historic credit. There's a long list of secretary standards that the property has to meet. You'll hear a little bit more from other panelists this afternoon on how those things work and how you can navigate those rules with getting the right professionals on your team like Logan that you'll hear from later. But the state credit in Maine works that virtually the statute that we have follows almost exactly word for word what the federal guidelines are for getting a property eligible on the national register. One element that we do have in Maine is a small deal set aside because we are a rural state. There are many small buildings that would never really be big enough to attract federal credit investors and therefore the developer might not seek federal credits and otherwise if the project is under $250,000 in eligible expenses, you can get the state credit without necessarily having to go through all of the criteria for the national register and the federal credit. The state does have a fair amount of ingredients that it's looking for in the project, namely the history and use of the property. But that's about the only sort of one off in eligibility for the project. Maine's credit along with eight other states is refundable and that's really important because the way a tax credit works in these projects it becomes an avenue to bring equity, to bring cash to your project but it can only do that if you can find someone to buy the tax credit and in the state of Maine the tax credit is delivered to the state taxpayer over a four-year period. So you have to as an investor you would have to wait four years to get your return of your full dollar back on your on your tax credit which means that it's attractive for long-standing private sector businesses in Maine that have significant state tax obligation to the Maine revenue services. But the other important feature is that as refundable if you don't have a state of Maine tax obligation whatever you're applying for that year can come back to you as a rebate. So a lot of real estate developers will look for that opportunity where they might qualify for a million dollars in federal tax credits and they'll qualify for a little bit more than a million dollars in state credits because our percentage is 25 percent so a million two fifty but if you don't have a million two fifty in tax obligation what are you going to do with a state credit? So the idea is that you then convert that credit to cash for your project and that's what I'm going to try and explain a little bit about in the next few minutes. For those who are familiar with how eligible basis and that's one of those sort of inside baseball terms it means how much of the expenditure not counting acquisition of your project meets the criteria for eligible investment to drive credit value. So if you're going to spend a dollar on an eligible activity 20 percent of that or 20 cents of that dollar is going to be delivered back to you as a federal credit and in Maine it's 25 percent on a typical project. However if you go to affordable housing you can get that credit up to 34 percent and these two credits are aggregated so you can put the federal credit and the state credit on top of each other and if you are nifty on how you assemble your partners you can get an investor to buy that 54 percent credit so that's 54 cents on every dollar that you're spending that's coming back to you as a credit. There's a little bit of a discount on when you sell the dollar of credit you don't get a dollar in cash because there's some transaction and time involved in when they get that credit but generally you're getting almost half of every dollar you're spending back to you as equity not debt but equity into the project to make it work so if you're new to tax credits that's the real powerful lever that a historic tax credit allocation can work and I'll just answer very briefly that the property has to be a going concern which means it has to be leased out as a commercial activity it is not eligible for owner occupied residences. Next slide please. So you know I'm working on my career as a architectural photographer I might have a little bit more to go our communications people always tell me to put more people in the pictures but I'm always fascinated by the buildings here's a couple of pictures in downtown Portland of some recent projects that my company has been involved in the one on the left is is a recovery house for women in transition and their families and the one on the right is for people with psychiatric disabilities who are otherwise at risk of being homeless or might have even recently come out of an institution heavily supported housing from a local service provider. Both of these projects are using federal credits they're using state credits and the way the state credit is working in each of these is that the developer doesn't have a state tax obligation so they're going to get the full rebate back from the state of Maine and then my company is making a bridge loan so I don't I'm hoping I don't lose anybody here but we're loaning the whole dollar of of the state capital I'm sorry the state credit into the project and as the customer gets that rebate back from the state of Maine they use that rebate to make a once a year debt service payment to my loan and it's paid off after four years based on the rebate schedule from the state of Maine because it's paid out 25% each year so I'll go over that again in just a minute for people that are trying to follow along and how the finance works but the the tool here is that the federal investor who's a local equity fund who's also purchasing the light tech credits these happen to each have light tech credits as well is is buying the federal credits and they're using their same investment pool that any other equity fund investor would would use and so we're able to leverage up a little bit more equity for each of these projects because my company Genesis fund is is making the bridge loan next slide so the purpose of of really focusing on how to push your state credit to further provide equity into the project is to provide more cash which means less debt and if you have less debt in a project then you have much more ability to provide affordable rents which is why the main credit goes from 25% to 34% if you've got rental units at least half of the rental units are targeted to households at 60% area median income which is a affordable housing vernacular but essentially if you're targeting rents for people that are between 100 and 150% of the poverty rate in terms of their income they would be then eligible for renting in that in that project so if you again if you're taking you have let's say a million dollars worth of renovations and if you don't have affordable housing that would generate 250,000 in state credits if you do have affordable housing it generates 340,000 in state credit so you can see very quickly that's an extra 140 grand in equity into the project add some zeros if you're in the bigger cities and it and it really makes it a big difference there's a couple of different ways that the state credit is converted into cash the bridge loan model is one of them there's another model where you can get a state nonprofit to be an investor just like your federal credit is an investor and and use the same rebate back to that to that nonprofit part of the reason why we have to be careful about who is your state investor in Maine is that that rebate from the main revenue services right you get your dollar of state credit you send it into main revenue services each year for four years they give you 25 cents back but that dollar that you get as a rebate from the state of Maine ultimately becomes a federally taxable event so I'm not going to go any further into tax consequences there but that's one of the reasons why we like to use a nonprofit and if you go to the next slide another acronym is that you can use someone called a CDFI if you've not heard of that acronym before that's a community development financial institution and that is a local nonprofit partner who usually has a mission aligned with your project to provide affordable housing and other more environment environmentally and community oriented solutions in the building such as childcare or charter schools or whatever else might be going on so in Maine again the the credit syndication or how you convert your tax credit into dollars is could be in two ways that is the developer takes the credit themselves and then they can borrow a bridge loan from my company for example or from others and repay the bridge loan with that rebate as they get it back from the state of Maine revenue services or the the tax collector or they can actually invite that nonprofit to join the project as an investor and allocate all of the credits to that investor who then does the same thing where they file for the rebate and and and and get that's how they get paid back so they make a loan I'm sorry they make an equity injection into the project and get and pay that back to themselves with the rebate so there's a couple of different ways to to convert the tax credit which ultimately is you know a piece of paper on your tax return into cash in the project but the the real effective tool here like in a number of other states and I'm hoping to see more of them take this on is that you get a bump in the basis so the value of the credit goes up in this case almost 30% from 25 to 34 and that allows the project to attract a lot more attention and get more equity and everybody knows if you have more equity in the deal that means you can have less debt and then you can actually afford to run the property on much more affordable risk so I'm I'm I want to sort of like not go too much deeper than that but I I want to just indicate that we go to the next slide that the the purpose of this is to really focus on on assembling the right team if you are if you are one of the players in a community where you see opportunities with projects you're going to need a developer you're going to need a tax advisor you're going to need a historic consultant to help you go through the eligibility and application process and you're going to use your your usual array of finance partners but again look for a CDFI who is going to be a key player in your community community development financial institution that is going to be as motivated as you are to see that project come forward and you have to figure out how you can how you can put that team together you know not everybody's timeline is going to be on the same curve and not everybody's cost structure is going to be on the same curve so it's better to have those conversations early on and again your your municipal officials as everybody knows are key to this because if you can't get your building permit or you can't get your zoning approval you're not going very far so i'll think i'll i'll stop there so we have time for everybody else's presentation thanks for listening and we'll be available for questions after this i'm going to turn it over now to leslie reid in boston good afternoon everyone my name is leslie reid and i have the pleasure to work for a medicine part development corporation we were actually founded 55 years ago before community development corporations were formally recognized in massachusetts and so we spent 55 years in the lower roxbury neighborhood of boston creating and maintaining mixed income homes in addition to operating programs for families and children some of our key accomplishments as we've um either produced or preserved over 1500 homes um where over 3000 residents live we do a lot of other great things in service of our mission to foster a vibrant healthy roxbury neighborhood but i'm really pleased to talk to you today about how the massachusetts state rehabilitation tax credit has um supported some of our work um so the next slide um in our portfolio of development um historic tax credit financing overall has helped us to either repurpose um restore or rehabilitate 10 buildings that um have 261 homes um another 30 that 32 000 square feet of non-residential uses um and at least three cases we did adaptive reuses of buildings so um taking school buildings or industrial or other buildings and repurposing them for housing and um in all cases um our historic restorations um of our buildings have enhanced both accessibility and energy efficiency um and so historic rehabilitation has been really really instrumental in um ensuring that we can meet our mission of preserving mixed income homes in our community and one thing that i want to mention there's a lot of people talking a lot about um kind of the technical side and the financial benefits um john did a great job of that but i want to talk a little bit about the community benefits as well you know boston massachusetts is famous for our revolutionary history um but our neighborhoods tell really really important stories and as a community-based developer um our our work um and using historic tax credits um to repurpose and restore buildings also helps us to um tell the stories of our communities and preserve what's valuable um so for example one thing that we've learned recently is that um there's a lot of buildings you see images here a four-story or more brick walk-up buildings which were homes to successive generations of workers in boston you know irish and italian immigrants jewish families and then subsequent generations of african-american and latinos and um they're they're referred to um in historic parlance as background buildings um but these backgrounds you know tell the stories of our communities and as developers we are incentivized and have become quite adept at understanding the history of our buildings telling the stories and leveraging the resources to preserve our history so in that way the historic tax credit has kind of an additional benefit when it comes to affordable housing and community-based development and practical purposes um the benefit of the historic tax credit to a number of our projects is as john indicated we tend to do larger more sophisticated projects and we have combined um our state historic tax credit with federal low-income housing tax credits we also have a state low-income housing tax credit here in massachusetts we've used the federal historic tax credit and then added in the state credit and in most cases on average we're able to leverage about four percent of the total development cost of the project using the um state historic credit that's averaged about twenty thousand dollars a unit and the good news is that twenty thousand almost a hundred percent of it goes to enhancing the scope of work um that we're putting into the construction and the rehabilitation of these buildings um so that is a great incentive and then the teams that john mentioned that we have to assemble the architects the historic consultants that help us navigate the secretary of interior standards for rehabilitation have also increased our attention and capacity to um the details of um renovation of buildings i've learned more about the profiles of buttons on window frames and the texturing color of mortar than i ever thought i would but the attention to building technology um has also increased the quality of the projects that we delivered and it's not in massachusetts but we are watching um avidly um when residential is developing a building i believe in connecticut that is both passive house and a historic renovation and so when it comes to um the future of building technology um the historic tax credit helps us leverage additional capital that covers sometimes the the incremental costs to enhance our scopes we also know in cities like boston when it comes to sustainability and resilience we can't do better than using um our existing buildings and thoughtful and creative ways and so in that way the state historic credit in massachusetts has catalyzed um a lot of successful work not just in boston and the roxbury neighborhood that i work in but across the state and um for that reason we think it's a really really critical tool especially when it comes to affordable housing development which um has now become you know a national um issue and to the extent that this resource provides funding um for equitable and thoughtful development that tells the stories and and preserves the histories of our communities it's a really um fabulous and important opportunity and we've been um really proud um to be deeply involved in that work in massachusetts and the city of boston so um i'm pleased now to turn it over to logan fergusson hi i'm logan fergusson um and as renay mentioned i've been working with historic tax credits for over 15 years i'm going to walk you through the technical side of federal and state credits along with a more specific look into the Delaware credits and um an affordable housing and tax credit case study that we recently completed there uh the federal historic incentive program was instituted in 1976 to provide a 20 tax credit to facilitate the rehabilitation of historic buildings in order to obtain the credit the building needs to be a certified historic structure meaning that it is listed on the national register of historic places it also needs to be an income producing property and must be maintained by the ownership for five years prior to the completion of work the proposed work must also meet the substantial rehabilitation test next slide uh the substantial rehabilitation test means that a project must exceed uh project cost must exceed the adjusted basis of the building which is calculated as shown in the table essentially this means that the project must be of a fairly large scope it would not for example be sufficient to simply paint the exterior of the building and receive a federal historic tax credit next slide once you've determined that your project meets the required criteria there's a three-part application process part one determines that a building is historic and documents its current condition through photographs in a written description part two describes the proposed scope of work to both the interior and exterior of the building through drawings in a written description and part three documents that the work has been completed as proposed all applications are first reviewed by the state historic preservation office and then the technical preservation services division of the national park service uh this also known as the nps uh the nps provides then provides final approval with conditions or denial of certification next slide the ship bone nps review the proposed scope of the project using the secretary of interior standards so you can see on the slides rather lengthy list but it essentially requires that any work done to the building maintain the historic integrity of the building in general any historic elements have to be retained or replaced in kind and any new elements have to be compatible but contemporary next slide a subcategory of the federal credit is a state historic tax credit which is presently offered in 39 states unlike the federal program each state has its own application process project requirements fees and monetary allocations however uh the process typically involves meeting the standard but federal requirements along with supplemental information next slide of the 39 states mentioned above only three have the supplemental credit for affordable housing in Delaware this is a set 10 percent credit which was first offered in 2001 and is currently funded through 2024 in Delaware the affordable housing and state credits are applied for jointly through a four-part process the first three parts are similar to the federal credit but also require the submission of preliminary certified costs the fourth part is a reservation of credit which involves a final accounting for the project next slide this is a case study of a building that we recently completed in wellington using federal state and affordable housing tax credits the building was completed in 1928 and stands as one of the few remaining impact examples of classical style architecture in wellington it's also significant as the last stand during luxury apartment building constructed in wellington before the depression and as the first high rise apartment building in delaware to be built with elevators it was individually listed on the national register in 1980 the building was placed in service in september 2020 it was completed at a cost of nearly 17 million including qres and non qres it contains 51 affordable housing units this resulted in a 30 credit of nearly 2.6 million from the state and a 20 credit of nearly 1.7 from the irs on the exterior of the building the work including cleaning repair and repointing of all exterior masonry and metal the most significant change was the replacement of all non historic windows with new historically appropriate steel units uh site work included new planting beds and sidewalks and the stabilization of two historic cast stone piers that flank the driveway next slide on the interior of the building the intact lobby and associated historic finishes were wholly retained this small wheelchair lift was added to an adjacent sitting room the historic circulation was also left intact including the stairways elevators and hallways given the retention of the residential programmatic use the interior configuration and historic fabric were also fully retained in general the kitchens and bathrooms are upgraded with contemporary finishes and some of the units were made handicap accessible thank you for listening be happy to answer any questions thank you um i wanted to just flag for folks that the national trust has entered into a partnership with another national organization called the national preservation partners network and we are working together to address four big issues that are challenging all of us and our states including affordable housing and density and so we have a working group that is looking at trying to create more tools to help create new affordable housing and to retain older housing that is currently affordable so the folks who are managing that particular project are listed there if you want to learn more information but as those products become available we will be sharing them on the preservation leadership forum so be sure to look for that next slide and i just wanted to give a shout out to the folks who are working on that working group and we are looking for examples of great tools that may be working to encourage affordable housing at this intersection with preservation and adaptive reuse so very much interested in hearing from you and stories and and examples that you might be able to share next slide so now it's the time for q&a and i want to thank all of our presenters for providing great information and if you all could join me back by sharing your sharing your your screens and join me up here on the panel we'd love to ask you the questions that we've received so far in the q&a and also i have a few myself so why don't we start with what the the folks have asked juliana rose would like to know does this apply for residential properties so i know that each state is different but maybe you all could share whether or not residential properties are allowed in your state their state tax code covers that in main like i think in most states the state credit is not going to be eligible for homes or owner occupied properties they do have to be income producing which means there has to be a leasing tenant in the building or tenants and that is a absolute requirement of the federal credit and many state programs parallel that that element so i would i'd love to see if that if a state had tried that but they would have to get over a pretty significant hurdle with matching the federal credit if they did some states do i know virginia does for state credit but it is definitely the exception absolutely yeah so i know that some states have a residential program that's separate from their federal the commercial state tax credit and so since each state's program is different i would encourage you all to visit the state historic preservation offices webpage which can provide you with specific information john this one may be for you dan would like to ask you to review in a little more detail the items included in the basis calculation for the projects property so if you could speak a little bit more about the basis calculation that would be helpful sure um i've been doing this in in main for a while and there's generally a pretty good sense among the developers who are familiar with it about what they can and cannot put in there the the sort of big sift is none of the purchase price none of the reserve dollars in a project if you're lender or your investor is requiring reserves you cannot include reserves you can't include prepaid points on financing and generally anything that is not in within the envelope of the building so if your project is also requiring water and sewer and sewer improvements or storm drain improvements that are outside of the property generally those are not eligible you can get away with certain things that are connected to and absolutely essential to the operation of the building if they're nearby but that's really kind of an interpretation from your local state historic preservation office but generally anything else that's going into the into the construction of the building furniture and movable fixtures are not eligible but certainly all of the hard construction costs and more importantly all of your soft costs related so are the architect and engineering as well as a developer fee are eligible for basis in the in the historic credit thank you you may have more experience with that as a developer directly no you covered it very well so this is a question for all of you because I do believe that massachusetts has a cap and i in delaware has a cap i'm not sure john if you want to comment on this but in terms of the caps that each state has um how do you work around that because there's only a set amount of money that the state will give for historic tax credits so interested in your perspective maybe first leslie about how you as a developer plan for that in your projects well it's it's extraordinarily challenging here in massachusetts there's typically 55 million dollars um and tax credit allocation available every year there's three rounds and those rounds aren't necessarily coordinated with the allocation of other affordable housing resources so i must say it's a bit of a challenging challenging dance and in some cases historic credits might come in um once you've already started the project which makes folks like john and cdfis that will provide bridge financing like really really critical um but if you have the kind of project where you can time multiple rounds and applications for funding that's the most effective way to maximize the allocation of credits in massachusetts it does not work for every project because some kinds of projects have to have 100 of the resources committed at critical um points but in some cases um we can project our eligibility and our track record in the past and take some limited risk and bridging um resources that might be allocated in future rounds that's really really interesting i don't know logan if you have any comments on that yeah i mean it's very state specific because some states have a set amount of money that they give out some states have um you know you just get a flat percentage of what you're spending so um it really depends and it it is to your benefit to know how your state is set up um in pennsylvania for example they have a set amount of money and the way that they distribute it is totally at their inclination um so we tell our clients to sort of think of it as a bonus if you happen to get it um other states that have a set percentage um you know if you apply sort of as Rene was saying in the beginning sorry as leslie was saying in the beginning of the round or in the beginning of the funding before they run out of money that's one way to do it um some states like ohio you can apply again and again if you don't get money so um you just really need a good understanding of how your state program works because they're all kind of all over the place and the nuances um can get very complicated and have very significant financial implications thank you logan that's very well said um so john you talked about having to get and i think leslie touched on this too getting everybody on the same curve so i think that's what leslie was talking about in terms of the time when financing has to be all aligned whether it's the low-income housing tax credit and the historic tax credit can you talk a little bit about the challenges of of marrying those two up at the right time to make the project work um yeah i can talk a little bit about that the um but it does vary from from state to state um if you are focusing to use the historic tax credit in conjunction with um one of the other affordable housing credits whether it's a the state or the federal li-tech or low-income housing tax credit from the treasury those are generally um allocated out in fact almost all of them are allocated out on a very competitive usually five to ten to one oversubscription meaning the state has a dollar of credit and ten people are showing up for it so um those competitive rounds often require a whole bunch of um spending and preparation on an application process um usually there's a lot of local permitting work that's required in terms of establishing readiness and so all of those things take time um in the meantime you're uh maybe you don't own the building yet and you're telling your seller hey just give me another three months here's 10 grand hard money non-refundable just let me have another three months until i get my award from this credit over here um and then your um you know you might lose some of your trades in in in a rural state like main um labor capacity is is constricted we have a dramatic shortage of trade labor so if you don't sign your contract with your builder and execute you might lose your mechanical contractor who's going to go on to the next deal and you got to wait five months before you can get somebody back in so there's a lot of orchestration the flutes have to play on the same page as the clarinets on the same page as the brass and and they're not all on the same calendar so it it takes a skillful developer to be able to hold all of those players together um i will say you know the historic credit uh in main um is a uh it's not a competitive process and i hate to say this out loud with 120 people listening but it's not capped either so uh in one year we might have five million dollars allocated um and the next year it might be uh you know 45 million dollars allocated um so uh with that i'll say that the success of the program in main is now uh proven um uh econometrically it is returning more money to the state of Maine than it's costing so that's why we're getting a large endorsement from our legislature uh for it to continue but the historic credit um is is effective very effective when paired with some of these others but um it's really important to pick your developer agent um carefully and make sure that they have some experience with this um you know you can you can learn it on the fly and usually it takes a couple of declined application rounds for you to learn the the real tricks about how to put these together um and as a an advocate in the community or a building owner or a municipal official um or just a community developer person um you want that you want that learning curve to happen on somebody else's clock somebody else's wallet so you want to be able to get the team that's done this before so they're not learning as much on on your watch those are really good points um so Nathan wants to know our most affordable housing projects done with historic tax credits and low-income housing tax credits 100 affordable or mixed income is either model model preferable from a financing standpoint Leslie hi um almost a hundred percent of our projects are um eligible for low-income housing tax credit um simply to maximize the basis and the value of affordable housing resources so um we have tended to utilize this resource when um 100 percent or nearly all units are affordable again if you're going to go through the hoops of structuring and timing a project to secure all of and coordinate all of these um tax credits um we tend to want to maximize the affordability um we have here in massachusetts where um some of the tax credits also have a preference for affordable housing and so for that reason we're incentivized to maximize affordability which is a great thing in massachusetts so uh yeah the answer is almost 100 percent affordable for our projects that apply here is tax credit um there are a couple of questions here that are specifically about smaller projects um one person is from eastern oregon and is approached uh cdfis um but their one to three million dollar projects are too small for the ones um and they were asking is there any thoughts on finding cdfis with interests in small projects well i'll just say that they um need to be talking to some different cdfis a three million dollar project is kind of right over the plate for my cdf i um in turn to use the baseball analogy so um and i work in in rural parts of maine i saw a question earlier on the chat about you know kind of working in town with less than a certain number of people and and we we've done historic projects in very rural towns um those generally only work when there is a uh a benevolent sponsor who's willing to take some risk and probably put more of their own equity than you might find in a conventional deal but they do work and um they can be transformative there's a small town in central maine called livermore falls that has a paper mill that used to employ 1500 people um i think there might be 200 left working there and there was last spring a giant explosion and there's zero people working there now and that town is at risk of literally falling off the map um but there's still an opportunity there and that i worked with a developer who put together a mixed use project that had a health clinic uh a tax prep agency um a small engineering firm and and five units of housing and those are the exact kind of mixes that you'd find in in rural communities uh in maine that are eligible we have lots of old buildings um so there's lots of stock to take a look at uh and so they it can work in smaller projects um i i think that the challenge is um finding a cdf i who is experienced in understanding how to leverage in those credits and once the cdf i recognizes an opportunity then that the leverage goes the other way they can pull that building owner or that developer to do a little bit further along in terms of the mission and add a little bit more affordable housing or possibly add space for a child care if that's in need in your community so um i just encourage those folks in rural areas keep talking to cdf i's the ones in your neighborhood are good to start with but there are other national cdf i's that will work across state lines and and do small projects um another person wants to know um scott wolf uh that the and would the anticipated decline and demand for office space significantly expand opportunities for adaptive reuse of those historic commercial buildings for affordable housing and if so are there tweaks that you would think about uh for state historic tax credits that could facilitate those conversions any thoughts on that my only yeah my only thought is that in boston um the land values for commercial versus residential aren't very different so the economics don't necessarily change radically for us when it comes to the acquisition of a non-residential building again land values are pretty consistent across the board so at this point you know we've been watching the market to see if changes in commercial demand might provide new opportunities for housing and affordable housing development but we haven't actually seen that come to fruition in a way that we could define the tools that would help us do that effectively so stay tuned at least from our perspective any kind of a coastal strong market kind of uh community from a sort of technical tax credit application there isn't on it i mean there is a difference but there isn't a substantive difference between putting in office space and putting in residential units so um from the way the program is applied it wouldn't make too much of a difference um from that perspective i just add that historically in main i think lenders to those projects were probably more comfortable with longer term commercial office users generally because they were higher credit quality and they would sign five and ten year leases than uh residential properties i think that has now turned um as those lenders are recognizing those commercial tenants might not be around um but i can tell you firsthand that i know in in hour one big city portland uh which is a great place to live um that the dynamic has changed and uh commercial space is now worth less than than then uh converting that to uh apartments and the um the trick is that it's a even though the project is required to remain a rental property for five years there's a sense that there are certain neighborhoods now that are going to accelerate to even further unaffordability and gentrification after the five-year compliance those housing units are going to flip to condos and that developer is going to go from being able to rent for you know i don't know 1500 bucks a month to suddenly being able to sell those individual units now for 250 350 or even higher uh 500 thousand dollars in a marketplace where uh you know that that kind of um downtown location with a view and you know is very rare so that just there's a there's a sense that you know we want to see those kind of things happen but it it almost is like we're lighting too much of a of a rocket here with um with conversion of historic buildings into residential um without any without any governance on making sure that those stay affordable long term and at this point there's no requirement for affordability um you know the developers can be incentivized to get a little bit richer tax credit if they put affordable units in there or if they choose to pair with one of the federal uh housing but if if there's enough market demand and they can do the project on conventional debt and uh conventional small equity and and historic credits that's the way they're going to go and then in five years they can sell out the whole property and and the return is uh pretty healthy for them and and not so great for the neighborhood so one of the questions is how many states give priority to the reuse of existing buildings in choosing the recipients of low income housing tax credits for their state um and I have not done a look and and it's my understanding that that's set by each state through a qualified allocation plan whether or not the reuse of a building is prioritized so I don't know and you're all states if you all could speak to those specifically mean in massachusetts our qap speaks to production versus preservation I don't know that they're talking about buildings you know so much as affordability but there is a set aside for quote-unquote preservation and that is the bucket where the reuse of historic buildings might fall so there is a port you know in our qap you know some money set aside specifically in a bucket that would work for historic you know reuse or or rehabilitation right now would add in main it's it's kind of a passive or an indirect incentive in that you know the qap often rewards or or definitely rewards developers who can leverage in additional resources besides those that are issued by the state housing finance agency and since the historic tax credit equity is often coming from a third party that's a way for a project to get extra points by leveraging in those dollars so there's a way for the qap to indirectly or I almost call it passively encouraged developers to go find those projects where they can bring in that additional equity but then you know there's a lot of other requirements of the construction standards that these historic buildings might not be able to make so you have to be able to weigh those things out when you're taking a look at your site I wish there were more more teeth in the gravity in the qap to encourage not only historic use but just flat old you know infill housing keep these projects in communities and don't put them four miles out because that's where the cheap land is so we're working on that but haven't solved all of those problems yet I think it's good Logan yeah I would certainly just say it is not the norm for the preservation of buildings to get you any kind of significant bump and as john said it sometimes can complicate things so obviously that is definitely an area in which improvement could be made I think across the board so I apologize at this point that we're not going to be able to answer everybody's questions but we have copied the questions down and we'll try and find other ways to answer either through a forum blog or individually get back to each of you so we really appreciate all of the excellent questions that we received and we appreciate all the excellent answers that we got from our presenters so thank you very much for that so with that we would like to just encourage you all to participate in other forum webinars so maybe if we could see the next slide forum connect is a way to continue this discussion through our online community for people who are in the business like us of saving places we have active conversations going on all week whether it's historic sites or section 106 so if you haven't joined forum connect it's a great ways great place to keep up these types of discussions we also have an upcoming webinar on august 14th about interpretation strategies where women made history so that is a great opportunity in august for you folks to continue learning and then we would like to thank everyone who joined this webinar today it's been a great discussion we are so thankful for the panelists who joined us to share with us their knowledge so thank them we'd like to thank you and we will definitely keep up the conversation because this is a very important topic thank you