New Markets Tax Credit Case Study for Welcome House
September 27, 2023
Welcome HouseSponsorFor more than 50 years, Welcome House has been committed to providing a high-quality, moral and open residential program to men struggling with alcoholism and addiction. Welcome House has held more than 50,000 12-step meetings and helped over 18,000 men become productive members of society again. This program has become a vital recovery resource and a community safety net for the Kansas City area. Most men arrive at Welcome House with no money, job, means of identification or support system, and they frequently do not have a verifiable employment history. A significant number of them face poverty, homelessness, legal consequences and marital or family issues. ProjectThis project involved the construction of a 28,000-square-foot, three-story building on the existing parking lot of the functionally obsolete 80-bed facility. The new building features 100+ beds, with additional spaces to learn and engage. With outside features of parking, recreational and gathering areas. On the first floor, a configurable multi-purpose room provides a large space to accommodate whole-house meetings and can be divided into smaller meeting rooms for a variety of simultaneous program activities. Several smaller rooms offer privacy and the potential for new on-site health services. In the post-COVID era, the space afforded by the new building will make it easier to operate under socially distanced protocols (when necessary) that were difficult to achieve in the previous building. For a congregate residential program like Welcome House’s, this flexibility is crucial to protecting the health of residents and staff. The new center’s second and third floors feature single, double and triple-occupancy resident rooms. This is another improvement that will make the management of infectious diseases more effective than in the previous multi-bed dorm-style resident rooms. The tiled bathrooms and larger common areas are also efficient for cleaning and disinfection. FinancingWelcome House engaged in a multi-year capital campaign to successfully raise approximately $10 million. As post-COVID construction costs kept rising, Welcome House sought out Cherry Bekaert’s New Markets Tax Credits team to help offset these unexpected expenses. Cherry Bekaert’s team of professionals was able to pair this transaction with an $8 million allocation commitment from CBKC CDC and a $6 million allocation commitment by the National Community Impact Fund. By utilizing the capital campaign proceeds, direct and upper-tier debt from Security Bank of Kansas City and the $14 million new market tax credit transaction, Welcome House was able to finance and complete their new facility.
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