A complex capitalization potentially including a multi-level public economic incentive package, LFREC applied our experience in structured finance paying particular attention to the success achieved with both Glen Town Center and Sherman Plaza, both of which included mission critical public-private financing.
LFREC designed for our development client a menu of multiple redundant potential solutions designed to ensure deliverability while minimizing the economic incentive burden to the local tax payers. This complex but elegant capitalization structure designed to deliver the lowest weighted average cost of capital includes:
Eliminating refinance risk
Debt Capital up to 85% of project cost minimizing the return-on-equity cost, essentially a fixed cost in any TIF supported development.
Minimizing outside cash equity investment by:
Maximizing equity credit from lender of underwritten land value in excess of land cost
Crediting a portion of a calculated 10% "developer fee" towards the equity requirement
Strategies for addressing immediate site remediation requirements
JV/Credit enhancement partners with combined over 75 years of experience in asset classes specific to the project, over $250 million of public-private investment, and credit pre-approval for debt financing.
Economic incentive structures maximizing efficiency thereby reducing risk to local taxpayers while maximizing community returns.
Our recommended structure not only maximized liquidity for the project through redundancy and provided surety of execution but also allowed us to continually seek alternative creative solutions including pre-sales, condominium conversion, vertical subdivisions, crypto-currency, alternative non-redundant sources and more, all with a deliverable funding mechanism backstop.
This potential redevelopment of an 8.5 acre blighted site located in Lincolnwood, Illinois, was derailed when the Village took precipitous action against the developer by passing an ordinance allowing the Village President to purchase the property by eminent domain then refused to meet with the developer to discuss this potential action. The otherwise well-advanced capitalization was forced out by the uncertainty of property ownership.
The Village immediately took action to remove the Village threats for the subsequent contract purchaser/developer.