Tax credit acquisition and syndication for historic preservation, renewable energy creation, and remediation of contaminated land…those topics just don’t sound sexy. I get it.
But there I was, with my presentation playbook in hand and our roster all set, walking into Gillette Stadium, home of the New England Patriots — one of the most successful teams in NFL history with five Super Bowl wins, nine appearances (the most of any team), and many other record-holding achievements. It was my game day: The Cherrytree Group’s annual tax credit conference.
I’m grateful my friend Brian Earley at NPP Development and The Kraft Group opened his doors to us because what he’s achieved at the stadium and at Patriot Place brilliantly illustrates the impact tax credits can have for developers. Brian explained to the large group of attendees, which included developers, architects, attorneys, and tax professionals from the area, how his organization reduced the combined stadium and business development electricity costs by 26 percent.
The crowd sat up straighter. Then, Brian noted that the complex’s natural gas consumption has gone down by 43 percent. With that statement, he had the rapt attention of everyone in the room as if the Pats were on the big-screen TV behind him, playing in the Super Bowl.
With the audience inspired and energized by Brian’s renewable energy success stories, our roster of speakers took the stage to articulate just how they could bring similar results to their projects.
In the real world, the challenges developers face encompass more than reducing current costs. Many times, the viability of a project depends on finding financial relief because projected future rental income simply doesn’t make revitalization a good investment.
Larry Curtis flipped his first house with a $3,000 down payment when he was 18 years old. Now, he leads roughly $5 billion in real estate holdings as president and managing partner of WinnDevelopment, but he’s never lost his eye for finding value.
Larry is very involved in historic preservation, and there’s plenty of history here in Massachusetts. Larry gave an eye-opening talk about how the commonwealth plans to allocate historic preservation tax incentives, and how developers can maximize project value by revitalizing with historic sensibilities.
Larry’s discussion about a property’s history offered a fitting segue for Bob Atwood to step into a subject I have a personal interest in: site remediation. Bob is vice president and senior engineer at Environmental Strategies & Management and has 44 years of experience as a licensed site planner in Massachusetts.
One of the great misconceptions about the available tax credits for cleaning contaminated property is the notion that those incentives are only for toxic land. Despite being referred to as Brownfields tax credits, Bob enlightened the group to the broader applications of these credits. For example, remediation of almost any property in the Back Bay neighborhood in Boston would be eligible for a Brownfields tax credit, he said.
My C-suite colleague at The Cherrytree Group, Melina Ambrosino, picked up the ball and went deep into the two-decade long history of tax credits given for cleaning up contaminated properties in the state — including the ways state agencies have streamlined both the approval process and timeline for tax-credit approval. The Brownfields program is due to end in 2018 but Melina pointed out that strong industry lobbying may extend the deadline.
I wanted every attendee to leave with not only a comprehensive understanding of the tax-credit opportunities out there but also a way to benefit from them. It’s easier said than done because sometimes developers just aren’t in a position to take advantage of the available incentives
So I reminded the attending developers and investors that, through our help, they can team up to a mutual advantage. By creating partnerships, investors can enjoy the tax credits while the developer gains equity for the project. Plus, there’s usually no time limit involved, and many credits can be deferred for as long as 20 years.
There was a wonderful feeling in gathering key players in the tax credit consulting field into the same venue to share what we’re all seeing day-to-day. With so much misunderstanding in the development and investing world about tax credits, it’s more important than ever to regularly put a clear lens on the topic so developers can get their projects built and stop leaving money on the table.