Munistrategies News

MuniStrategies project awarded QLICI of the Year 2015

The Novogradac Journal of Tax Credits recently announced the winners of the 2015 Community Development QLICIs of the Year Awards, which recognize community development entities (CDEs) that made exceptional qualified low-income community investments (QLICIs) in the past year. Winners will be honored Oct. 21 at the Novogradac New Markets Tax Credit Conference in Chicago.

In the Operating Business Category, Winston Plywood & Veneer, LLC, which is based in Louisville, Mississippi was chosen as the winner.

WinstonStrong

“I want to congratulate the winners and honorable mentions of the Community Development QLICIs of the Year Awards,” said Brad Elphick, CPA, conference chairman and partner in Novogradac’s Atlanta metro office. “In terms of execution, innovation and community impact, these transactions are among the best in the industry.”

About The Project

In April 2014, Louisville, Mississippi was devastated by an EF-4 tornado, which killed 10 people and destroyed more than 1,000 structures, including the 265,000-square-foot plywood lumber mill. The town was subsequently declared a federal disaster area by Federal Emergency Management Agency (FEMA).

After the tornado devastated the area and facility, WPV partnered with city officials, including Mayor Will Hill, and FEMA, and determined the outside structure of the facility was eligible for FEMA public assistance grants. The $43 million grant, along with equity raised from new markets tax credits (NMTCs), enabled WPV to develop a new state-of-the-art mill building. Alan Lange, managing director of MuniStrategies LLC, said the new facility is will serve as an anchor for the local economy. The building will be developed to help weather economic downturns, produce larger volumes of plywood for less cost and employ 400 local residents, double the amount the previous facility employed.

WPV overcame several financing hurdles to redevelopment the mill. One of the significant problems was the status of the equipment. Much of the equipment needed to operate the plant had to be substantially repaired. Lange said it was difficult to finance the repair of used equipment with traditional financial methods, as well as determining the equipment’s collateral value. As a result, MuniStrategies worked with the company executives and local and state officials to have NMTC financing serve as the financing vehicle for this particularly difficult part of the capital stack. MuniStrategies was able to create an innovative financing model that provided $12 million in federal and $9.2 million in state NMTC financing to bridge this capital gap shortfall and fund equipment repair/replacement in conjunction with FEMA CDBG Grant funding, Appalachian Regional Commission Grants and other local/state economic incentives.

Lange said the development will create more than 600 jobs, $28 million in annual wages and nearly $9 million annually in other local purchases. Across the broader 33-county region, the impact jumps to a projected $66 million in annual wages, more than $105 million annually in other local purchases and more than 1,400 jobs. WPV, which made a $50,000 per year commitment to MuniStrategies to fund workforce development during the seven-year compliance period, has already started recruiting in conjunction with East Central Community College and Winston County WIN Job Centers.

“This is a fantastic story about perseverance and commitment after the devastation in Louisville following the EF-4 tornado. The direct impacts are great, but the heart that Winston showed will bind this community for generations, undoubtedly leading to a thriving community,” said Eric Rosen, a 2015 Community Development QLICIs of the Year Awards judge.

 

 

 

© 2017 Munistrategies LLC, All Rights Reserved
In accordance with federal law and U.S. Department of the Treasury policy, this institution is prohibited from discriminating on the basis of race, color, national origin, sex, age, or disability. To file a complaint of discrimination, write to Department of Treasury, Office of Civil Rights and Diversity, 1500 Pennsylvania Avenue, NW, Washington, D.C. 20220 or call (202) 622-1160.