Iowa Business Growth Company

5409 NW 88th Street Johnston, Iowa 50161 515-223-4511 dan@iowabusinessgrowth.com

Who/What is Iowa Business Growth Company???

A For-Profit, Certified Development Company est. 1981

Market, Package and Service the SBA 504 Loan Program

Outstanding portfolio - $108.4 million

304 outstanding loans

Territory is Iowa

Market, Structure and Service New Markets Tax Credit projects

$245 million in allocations to date

18 Projects

Exclusive Administrator of the Wellmark Small Business Loan

$5 million

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New Markets Tax Credits

Program Overview

Bringing capital to communities that have had inadequate access

to capital

And/or

Program Overview

Designed to compensate Investors for perceived risk of investing in Low-

income communities

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Project Big Bird

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Impacts: • 34.2% poverty rate • Unemployment 1.79 times national average • Median income 50.7% of area median income • Economic Development Hot Zone • Project cost: $10 million • 320 direct jobs • NMTC allocation: $10 million

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Pinnacle Foods

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Impacts: • 16.7% poverty rate • Unemployment 1.29 times national average • Median income 74% of area median income • Rural • Project cost: $40 million • 65 direct jobs • NMTC allocation: $10 million • Additional Community Benefit: $175,000

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Wright on the Park - Before

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Wright on the Park - After

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Wright on the Park, Mason City

Renovation of former bank building and hotel designed by Frank Lloyd Wright. Will be used as a boutique hotel, restaurant, and conference center.

Project size: $18.9 million

2008 ICD NMTC Allocation used: $10 million

Investor: US Bank

Project Construction

Direct Jobs 11 25

$1.47 million of the benefit will go to a Mason City Foundation for support of future low income Mason City area benefit.

$282,000 to the Mason City Foundation for The Music Man Square.

$50,000 to help create the “River City Sculptures on Parade” public art program.

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Winegard Company

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Impacts: • 24.6% poverty rate • Unemployment 1.7 times national average • Median income 69.3% of area median income • Rural • Project cost: $17 million • 70 direct jobs • NMTC allocation: $12 million • Additional Community Benefit: $400,000

CRST

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CRST

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Impacts:

42.4% poverty rate

Median income 52.1% of area median income

Project cost: $43.8 million

953 direct jobs

NMTC allocation: $ 15.8 million

Additional Community Benefit: $290,000

Dubuque “Pre-NMTCs”

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Dubuque an example of a

“New Market” Community

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Roshek Building Redevelopment in Dubuque

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Impacts:

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• 24.9% poverty rate • Unemployment 1.52 times national average • Median income 53.3% of area median income • Economic Development Hot Zone • Project cost: $38.9 million • 1,300 direct jobs • NMTC allocation: $10 million • Additional Community Benefit: $589,000

Program Overview

$10 million dollar Project will produce 39% tax Credit

($10,000,000 * 39% = $3,900,000)

$3.9 million dollar tax credit converts into cash at 85¢

($3,900,000 * .85¢ = $3,315,000)

Transaction costs vary but typically can reach $400,000

($3,315,000 - $400,000 = $2,915,000)

Economic Benefit = $2,915,000 39

Program Overview

$30 million dollar Project will produce 39% tax Credit

($30,000,000 * 39% = $11,700,000)

$11.7 million dollar tax credit converts into cash at 85¢

($11,700,000 * .85¢ = $9,945,000)

Transaction costs vary but typically can reach $400,000

($9,945,000 - $800,000 = $9,145,000)

Economic Benefit = $9,145,000 40

Community Development Entities (CDEs): CDEs must:

Have a primary mission of serving low-income communities or low-income persons;

Maintain accountability to residents of low-income communities through their representation on any governing board or advisory board;

Must be certified by the CDFI Fund division of the Treasury.

Recent History of Program “Availability/Request”

December 21, 2000

Congress enacts the NMTC as a part of the Community Renewal Tax Relief Act of 2000.

2010 Allocation

$3.5 Billion available, $23.5 Billion requested (6.7 times available allocation)

2011 Allocation

$3.5 Billion available, $26.7 Billion requested (7.6 times available allocation)

2012 Allocation

$3.5 Billion Available, $21.9 Billion requested (6.3 times available allocation)

2013 Allocation

$3.5 Billion Available, $25.9 Billion requested (7.4 times available allocation)

Characteristics of the Allocatees: 2006

$4.1 Billion available

254 CDEs applied – 63 awarded allocation (24.8%)

Average Award was $65 million

2008

$3.5 Billion available

239 CDEs applied – 70 awarded allocation (29.3%)

Average Award was $50 million

2009

$5 Billion available

249 CDEs applied – 99 awarded allocation (39.8%)

Average Award was $50 million

2010

$3.5 Billion available

250 CDEs applied – 99 awarded allocation (39.6%)

Average Award was $35 million

2013

$3.5 Billion available

310 CDEs applied – 87 awarded allocation (28.1%)

Average Award was $40 million

Low Income Communities

Census tracts where:

Poverty rate exceeds 20% or

Median income is below 80% of the greater of:

Statewide median income or

Metropolitan area median income.

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Iowa Community Development

5 time Allocatee of New Market Tax Credits

2006 - $45 million Award

2008 - $50 million Award

2009 - $70 million Award

2010 - $35 million Award

2013 - $45 million Award

18 Projects

Communities served

Des Moines Davenport

Fairfield Sioux City

Dubuque Mason City

Burlington Corwith

Marshalltown Cedar Rapids

Fort Madison Harlan

Ames

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Iowa Community Development -Status of Allocations

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Iowa

Business

Growth Company

Thank you!

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