Syndication Leasing Structures

How Tax Credits Become Capital: When and How to Syndicate Panel

USING HISTORIC TAX CREDITS IN NEW YORK

June 24, 2009

The Rehabilitation Tax CreditsInternal Revenue Code Section 47

Tax Credit Investor LLC

Tax Credit Investor LLC

Tax Credit, LLC(Property Owner)

Tax Credit, LLC(Property Owner)

Tax Credit InvestorTax Credit Investor

Single Entity Structure

TenantsTenants

RentalPayments

Construction/Perm Lender

Construction/Perm Lender

Managing Member(Developer Affiliate)

Managing Member(Developer Affiliate)

HistoricTax Credit

Equity

99.99% Credits, Profits & Losses and Cash Flow

LoanProceeds

DebtService

Payments

.01% Credits, Profits & Losses, Fees and

Cash Flow

DeveloperEquity

DeveloperDeveloperDev.Fee

Tax Credit Investor LLC

Tax Credit Investor LLC

Master Tenant, LLC(Master Tenant)

Master Tenant, LLC(Master Tenant)

Landlord, LLC(Property Owner/Lessor)

Landlord, LLC(Property Owner/Lessor)

Master Lease/Credit Pass-Through Structure

Sub-Tenants/End Users

Sub-Tenants/End Users

RentalPayments

Construction/Perm Lender

Construction/Perm Lender

Managing Member(Developer Affiliate)

Managing Member(Developer Affiliate)

HistoricTax Credit

Equity

99.99% Credits, Profits & Losses, and Cash Flow

LoanProceeds

DebtService

Payments

.01% Credits, Profits & Losses, Fees and

Cash Flow

DeveloperEquity

>50% Profits & Losses, Fees and

Cash Flow

Pass-through of Historic Tax Credits & Share of Residual

Lease Payment &Equity Investment

<50% of Landlord Profits& Losses

Andrew Potts, Esq.401 9th Street, NWSuite 900Washington, DC 20004

202.585.8337202.585.8080 (Fax)

apotts@nixonpeabody.com

Thank You