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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
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