Tax Advantaged Investments


Ulmer & Berne’s tax and community development attorneys have extensive experience assisting clients with the broad range of tax issues that arise in connection with the structuring, negotiating, documenting and closing of projects involving federal and state New Markets Tax Credits (NMTC) including the leveraged model, Historic Tax Credits (both federal and state), Renewable Energy Tax Credits and Low Income Housing Tax Credits (LIHTC) and multiple credit transactions, tax increment financing, facade easements, conservation easements and lost development easements.

Our multidisciplinary group combines the knowledge and expertise of highly skilled attorneys experienced in advising developers, investors and lenders on tax advantaged investments involving:

  • Historic Tax Credits (HTC)
  • LIHTC
  • NMTC
  • Preservation Easements
  • Renewable Energy Tax Credits

Historic Tax Credits

State and federal historic rehabilitation tax credit programs provide tax subsidies to those who invest in the rehabilitation of historic districts and landmark buildings. We have experience advising on projects that qualify for HTC and are well-versed on the similarities and differences between state and federal HTC. We work with the developers of these projects, as well as the project investors and lenders, to identify and resolve the tax issues involved in these transactions and assist structuring the financing related to these credits. Our attorneys have managed a broad range of historic rehabilitation tax credit transactions across Ohio and other states and have been involved with the first projects to successfully close with the Ohio Preservation Tax Credit.

LIHTC

Our attorneys have been advising clients on LIHTC transactions since the program’s inception in 1987. The LIHTC program allows four percent and nine percent credits for affordable housing projects. We take a multidisciplinary approach and rely on the talents of attorneys across several different practice groups to help clients navigate tax issues and identify the best structure for their transaction.

NMTC

The NMTC program provides tax incentives on qualified investments in qualified businesses in low-income communities. The NMTC program allows a 39 percent credit to be taken over seven years for qualified investments. We advise investors, developers and lenders on the tax issues involved in structuring and closing NMTC deals under state and federal guidelines.

Preservation Easements

Preservation easements are legal tools designed to protect significantly historic properties. When properly structured, preservation easements can ensure long-term preservation of your historic property and provide tax benefits. Facade and lost development easements create a charitable contribution deduction equal to the value of the easement. Facade easements are based on a percentage of the building’s value. Lost development easements are based on the lost potential of the site. We help clients understand their tax advantages and liabilities, and finance these projects using easements and effectively navigate the extensive auditing process involved with preservation easements.

Renewable Energy Tax Credits

Section 45 and 48 of the Internal Revenue Code identifies tax credits for qualified investments in wind, solar and other renewable energy facilities. Eligible facilities – solar, wind, fuel cell, geothermal and micro-turbine – can receive a credit equal to 30 percent of the investment. We help clients understand the requirements of this tax code and maximize the benefits of renewable energy tax credit transactions and the financial advantages these credits can bring to these projects.

Frederick N. Widen, a Cleveland-based partner at Ulmer & Berne LLP, has been nationally recognized as a Client Service All-Star by BTI Consulting Group. The honor extends to a select group of elite attorneys who provide the absolute best in client service, going above and beyond the call of duty...

Representative Experience

New Markets Tax Credit (NMTC)

  • Represented a nonprofit developer in connection with the conversion of a historic hospital into a charter school and nonprofit offices utilizing federal and state New Markets Tax Credit (NMTC) and Historic Tax Credit (HTC).
  • Representing a nonprofit developer utilizing leveraged NMTC structure to finance the expansion of its facility in the City of Toledo.
  • Represented a nonprofit utilizing leveraged NMTC structure to finance the expansion of its home-like facility in the City of Cleveland’s medical community.
  • Represented a nonprofit developer utilizing a leveraged NMTC structure to finance its new corporate headquarters in the City of Cleveland.
  • Represented a nonprofit in the Fairfax neighborhood in the development of a community building using leveraged NMTC.
  • Represented a nonprofit developer in connection with the renovation of an historic theatre using federal and state HTC and leveraged NMTC in Cleveland.
  • Represented a nonprofit developer with respect to its theatre renovation project using leveraged NMTC and federal HTC in Marietta, Ohio.
  • Represented a municipal developer with respect to its urban development projects involving the renovation of a historic hotel using leveraged NMTC and federal and state HTC in Piqua, Ohio.
  • Representing a developer in the conversion of an office building in the NineTwelve District in Cleveland, Ohio, into housing, commercial space, and a parking garage utilizing federal and state HTC together with NMTC. Total project cost of $63 million.
  • Representing a hotel developer in connection with the adoptive reuse of a historic structure in Cleveland utilizing federal and state NMTC and federal and state HTC.
  • Represented a developer of a mixed use project (housing and retail) in the Playhouse Square area utilizing federal and state NMTC along with federal and state HTC.
  • Represented a leveraged lender in connection with a NMTC transaction financing a green house in the City of Cleveland utilizing an employee cooperative structure.
  • Represented a leverage lender in a NMTC transaction financing a “green” laundry facility utilizing an employee cooperative structure.
  • Represented a lender in connection with a mixed-use project in University Circle of Cleveland, Ohio utilizing leveraged NMTC.
  • Represented a for-profit developer in a mixed-use project located in the central business district of Cleveland, Ohio, which involved federal and state HTC, leveraged NMTC, tax increments financing (TIF), and subordinate financing.

Historic Tax Credit (HTC)

  • Representing buyer-client in the purchase of the 52-story historic Terminal Tower in downtown Cleveland in a transaction involving complicated joint use arrangements and financing in connection with its redevelopment utilizing historic and new markets tax credits, public financing, and tax increments financing. Also negotiated and closed the acquisition financing for the building.
  • Represented buyer-client in the financing for the redevelopment of the historic Halle Building in downtown Cleveland. This mixed-use project (half commercial and half residential), involved multiple sources of funding, historic, and new markets tax credits.
  • Represented a Missouri-based national hotel chain in a multi-layered debt and tax credit deal that among other sources of funding, included federal and state historic tax credits along with bank and State of Ohio financing.
  • Represented a nonprofit developer in connection with the conversion of a historic hospital into a charter school and nonprofit offices utilizing federal and state NMTC and HTC.
  • Representing a developer in the conversion of an office building in the NineTwelve District in Cleveland, Ohio, into housing, commercial space, and a parking garage utilizing federal and state HTC together with NMTC. Total project cost of $63 million.
  • Representing a bridge lender for federal and state HTC for a project in the Gordon Square Arts District of Cleveland.
  • Representing a hotel developer in connection with the conversion of a school administration building into a hotel utilizing federal and state HTC together with NMTC.
  • Represented the corporate investor in a project involving federal and state HTC and the renovation of a building in the Playhouse Square area into commercial space.
  • Represented a developer in the conversion of an office building in the Playhouse Square area to multifamily/retail project utilizing federal and state HTC twinned with federal and state NMTC.
  • Represented a lender in a project involving HTC and preservation easements on the West side of the Flats in Cleveland, Ohio.
  • Represented a developer in connection with a commercial building across from CSU involving federal and state HTC.
  • Counseled a developer on the acquisition, renovation and financing of the conversion of the Gateway District historic office building into apartments and retail space. Project challenges included multiple ground leases, ownership issues and multi-layered financing.
  • Represented a for-profit owner and developer in the rehabilitation of 116 units using state and federal HTC and Low Income Housing Tax Credits (LIHTC) in Cleveland, Ohio.
  • Advised a nonprofit owner and developer in the rehabilitation of permanent supportive housing units using federal HTC and LIHTC in Cleveland, Ohio.
  • Represented a nonprofit independent college of art and design with respect to HTC in Cincinnati, Ohio.
  • Represented a nonprofit in developing permanent supportive housing using federal and state HTC together with LIHTC in Youngstown, Ohio.
  • Represented a developer of multiple warehouses to housing conversions using HTC, U.S. Department of Housing and Urban Development (HUD) financing and preservation easements in Cleveland, Ohio.
  • Represented an owner/developer in connection with the renovation, development and financing of a project involving multifamily and retail units. Funding included multi-layered public and private financing as well as HTC and conservation easements.
  • Advised a developer in an $81 million redevelopment of a warehouse into a multifamily project in the Warehouse District. This was the largest HUD project (at the time) with multiple subordinate lenders utilizing HTC and preservation easements in Cleveland, Ohio.
  • Counseled a developer on the conversion of a historic department store in downtown Indianapolis into apartments, including its acquisition, financing and renovation. Issues involved Urban Development Action Grant financing, historic rehabilitation tax credits, multiple cross easements and facade easement deductions.
  • Representing a developer with respect to its residential real estate project using federal and state HTC in the Ohio City neighborhood of Cleveland, Ohio.
  • Advised a hospital in the development of its health center and spa using federal and state HTC and NMTC to leverage the structure.
  • Representing a nonprofit owner in the rehabilitation and development of a multi-phases project including 216 units, an office, and charter school in a former hospital building with historic designation using state and federal HTC, LIHTC, and NMTC in Cleveland, Ohio.
  • Represented a local developer in connection with federal and state HTC, together with HUD financing, with respect to renovation of a factory into a mixed-use development in Cincinnati, Ohio.
  • Represented the developer of a mixed-use project utilizing federal and state HTC and leveraged NMTC loans in Piqua, Ohio.
  • Represented a developer in the Cleveland State University area for a mixed-use development using federal and state HTC.
  • Represented a nonprofit developer in the Gordon Square Art District of a theatre renovation using combined federal and state HTC and NMTC.
  • Represented a developer in an adaptive reuse of a manufacturing facility into housing using HUD and city financing together with HTC.
  • Represented a developer of a substantial rehabilitation of two apartment buildings in the Detroit Shoreway neighborhood using LIHTC (four percent) and federal and state HTC.
  • Representing a nonprofit developer in connection with the rehabilitation of a historic theatre in Marietta, Ohio using federal and state HTC together with NMTC.

Preservation Easements

  • Represented numerous developers in Cleveland’s warehouse district using HTC and preservation easements.
  • Represented a developer in the conversion of the historic Warehouse District building into apartments. Issues included leases of public land for parking, HTC, multi-layered financing and facade and air rights easements in Cleveland, Ohio.
  • Advised an owner/developer on the conversion of an industrial facility into moderate-income residential apartments using HTC and conservation easements. The project involved extensive environmental remediation, multi-layered financing and complicated air rights easements, reciprocal easements and leases of adjacent land. Work also included negotiations with Cuyahoga County for easements and leases of public land.
  • Advising a lender in connection with subordination of its mortgage to preservation easements in Cleveland, Ohio.

Tax Increments Financing (TIF) Projects

  • Represented developers in an approximately $17 million mixed-use residential and retail project (green building) consisting of approximately 49 residential units (including 20 percent affordable housing), and retail establishments consisting of nearly 13,000 square feet of retail space, together with required parking in downtown Oberlin. Project financing included TIF, including compensation agreement with local school district.
  • Represented developers of a proposed 400,000 sq. ft., $110 million mixed-use project in the City of Lakewood. The negotiated project included TIF and other city and state financings. Due to the passage of a referendum, the project did not go forward.
  • Represented developers in the $23 million redevelopment of historic property in Cleveland for a mixed-use office and retail shopping center project. Project financing included TIF, federal, state, and city loans and grants, and private equity.
  • Represented a developer of a four-phase, mixed-use redevelopment of property in Shaker Heights, Ohio. Project involved TIF, eminent domain and private equity.
  • Represented a local city in its financing renovation of two historic arcades in downtown Cleveland, Ohio for a mixed-use (hotel and retail) project financed by TIF, HTC and private equity.
  • Represented a company in financing and constructing its new company headquarters project in downtown Cleveland. The $38 million in project financing included Port Authority bonds, TIF, City of Cleveland, Cuyahoga County, private foundation, and State of Ohio loans and grants.
  • Represented developers of a 208-room hotel in downtown Cleveland, Ohio. The $28 million in project financing included TIF, Urban Development Action Grant (UDAG), and private equity.
  • Represented a developer in TIF negotiations in connection with a marina and boardwalk project.
  • Represented a developer of residential project in connection with a TIF agreement for roadway/infrastructure improvements.
  • Represented a developer in connection with a TIF agreement for a mixed-use project.

Department of Housing and Urban Development (HUD) Transactions

  • Representing a developer utilizing HUD 221(d)(4) for a substantial rehabilitation in Ohio City neighborhood of Cleveland.
  • Represented developers in connection with numerous HUD 221(d)(4) financings in the warehouse district in Cleveland, Ohio.
  • Represented a multi-family developer in connection with a HUD 221(d)(4) substantial rehabilitation project in Cincinnati, Ohio.
  • Represented a developer in connection with a HUD 221(d)(4) substantial rehabilitation in Indianapolis, Indiana.
  • Represented a HUD lender in connection with numerous HUD refinancings.
  • Represented a borrower in connection with the HUD refinancing of its senior housing portfolio.
  • Represented a borrower in connection with a HUD 108 loan for the construction of a new manufacturing facility in Cleveland, Ohio.