Anna Short-Slightom Completes New Market Tax Credits Transaction to Expand Food Bank

Womble Bond Dickinson attorney Anna Short-Slightom represented Raleigh-based nonprofit Food Bank of Central & Eastern North Carolina in a new markets tax credits (“NMTC”) transaction to finance the expansion of the Food Bank’s Wilmington branch.  The new Wilmington facility triples the size of the old location and will provide more space to store and distribute food to southeastern North Carolina. In addition, the new space contains a 2,500 SF commercial teaching and production kitchen.

WBD attorneys Peter Duffley and Hunter Edwards assisted with the transaction, with additional support from Chris Hewitt.

The multi-million dollar project is being partially financed through the NMTC program, which is a federal tax credit program designed to encourage investment in economically distressed areas.  A community development entity (“CDE”) affiliated with Rural Development Partners provided a $12,500,000 loan to the project with the help of investment funds from Regions Bank.

Short-Slightom assisted the Food Bank in its role in the NMTC transaction as a qualified active low-income community business (“QALICB”) by structuring the transaction to ensure the NMTC requirements were met while also meeting the Food Bank’s business objectives.  The WBD team negotiated, prepared and reviewed critical transactional documents, ranging from various loan agreements, organizational documents (including Form 1023 filings), real estate documents and fee arrangements, to tax and enforceability opinions.

Enacted in 2000, the NMTC program is designed to stimulate economic and community development and job creation in low-income communities by attracting investment capital from the private sector. Taxpayers invest equity capital in qualified CDEs in exchange for a credit against their federal income taxes. In turn, CDEs are required to invest the proceeds in low-income communities for projects such as the Food Bank’s Wilmington branch.

The Food Bank is a nonprofit organization that has provided food for those facing hunger in 34 counties in central and eastern North Carolina for over 40 years. The Food Bank is an affiliate member of Feeding America, the nation’s leading domestic hunger relief charity. In terms of total food distributed, the Food Bank ranks in the top 15 nationally among 200 Feeding America food banks and first in North Carolina.