2006 Section 108 Project Summaries - Iowa

Nonpareil Building Renovation
Council Bluffs, IA
Section 108 Guaranteed Loan- $750,000

The City of Council Bluffs will provide financing assistance through a New Market Tax Credit (NMTC) structure to J-Development of Omaha, NE, Limited Partnership (LP), the developer, for acquiring the Nonpareil Building and renovating it to create a new 13,100 square foot office building for the Council Bluffs Savings Bank. The renovations will restore the building to complement the other renovations occurring in the downtown Central Business District and the downtown urban renewal area. J-Development of Omaha, NE, LP, will use the New Market Tax Credits (NMTC) as a source of equity funding for the project.

The City will re-lend the Section 108 Guaranteed Loan proceeds to the Pottawattamie County Development Corporation (PCDC) which will in turn combine the loan with $750,000 in NMTC equity. The PCDC will form a Community Development Entity (CDE) and invest the guaranteed loan financing and NMTC funds into the CDE as equity. The CDE will use the equity monies to make a loan to J-Development, NE, LP, for the acquisition, improvement and renovation of the building. The total project cost is $2,632,300.

The Community Development Block Grant (CDBG) national objective for the City's use of its guaranteed loan proceeds is to benefit low-moderate income persons through the creation of 15 new full-time jobs.

The City will repay its Section 108 Guaranteed Loans over an eight-year period, paying interest only for the first seven years. To repay the guaranteed loan, the City will use J-Development, NE, LP rent revenues from the Nonpareil Building and the City Tax Increment Financing revenues. To secure the repayment of the guaranteed loan, the City pledges the tax increment financing from the downtown urban renewal district and its CDBG funds.