Historic Tax Credits

Preservation, rehabilitation, adaptive re-use, and re-development of historic buildings utilizing federal historic tax credits and/or related state historic tax credits is a creative and economically beneficial enterprise for developers, investors, owners, and communities. CohnReznick offers full-service advisory capabilities for federal and state historic tax credit projects, including estimates of eligible basis, financial projections, tax credit equity investment capital relationships, in-depth transaction analysis, and development of transaction structures to help maximize benefits for all parties.

In addition to offering property owners, real estate developers, equity investors, lenders, and other project stakeholders substantial incentives for private investment, historic tax credit developments result in important civic advantages, from increases in property taxes to general enhancements to commercial activity. Communities benefit from property improvement and increased occupancy of buildings in historic neighborhoods.

For over 20 years, CohnReznick has been at the forefront of making historic tax credits a matter of national policy and guiding clients in maximizing their benefits. Our team has participated in the restoration and adaptive re-use of hundreds of real estate developments nationwide, including apartment complexes, office and retail buildings, hotels, mixed-use properties, student housing, educational facilities, theaters, and art centers, among many other types of buildings and tenants.

We help developers comply with tax and historic requirements, allowing them to identify well-suited sources of financing, while also working on behalf of owners, lenders, equity investors, and tax credit syndicators to help maximize tax credit and tax credit equity proceeds, while making sure all additional capital stack components are properly synchronized.

Our clients benefit from access to the most current historic tax credit knowledge, insights into complex technical rules, deep capital markets relationships, and creative employment of comprehensive strategies.

Services

Transaction structuring, due diligence, and understanding the tax credit equity capital markets
Assistance with all aspects of the tax credit equity investor transaction closing process
Financial analysis and projections
Assistance in coordinating “soft money” from local governments with other project sources
Assistance with bifurcations, master lease structures, and structuring transaction capital stack-related economics based on the most up-to-date policy, strategies, and tax opinion-related requirements
Market insight and consultation on tax credit equity trends and current debt and equity market conditions
Compliance assessment based on IRS code and regulations, state-level statutes, private letter rulings, court cases, and other guidance that impacts deal structuring; examples include IRS Safe Harbor, partnership allocation rules, Substantial Rehabilitation Test, tax credit recapture issues, eligible basis, cash flow waterfalls, and the overall business arrangement between all transaction parties

Qualifications

Comprehensive understanding of all historic tax credit project parties and their competing priorities, from the National Park Service to developers, investors, syndicators, the IRS, state-level revenue departments, city governments, and community stakeholders
Active participation in industry groups (e.g., National Trust for Historic Preservation, National Park Service, Urban Land Institute, National Housing & Rehabilitation Association, IPED)
Publication in industry journals
Significant understanding of the unique challenges of structuring, using, and syndicating state historic tax credits of all types and related subsidies
Exceptional reputation in the real estate industry for providing expertise in real estate taxation and transaction structuring (e.g., tax increment financing, other local subsidies)
Substantial portfolio of clients, some of whom are responsible for the largest historic tax credit developments in the country