Case Study

NMTC Case Study for FC Mission Plaza

June 15, 2021

Project

In the early 1980s, a group of University of Texas students created a local housing program for low-income families that would later turn into Foundation Communities (FC)—a local, homegrown non-profit dedicated to providing affordable, attractive homes and free on-site support services for thousands of families with kids, as well as veterans, seniors, and individuals with disabilities.

In the decades since, FC has grown to develop, own and operate 23 residential communities all over Austin and in North Texas, providing over 5,600 Austinites with quality, affordable housing. By 2018, FC had outgrown its headquarters and Community Financial Center (CFC) in south Austin. To resolve that problem, FC identified a onestory retail building and a co-located four-story suburban office facility constructed in 1973 and 1974, respectively. The site is located in a Federal Promise Zone where the low-income community has 33.10% poverty and median family income at 39.92% of the wider metropolitan area.

After acquisition, FC will renovate the four-story building, taking over more than one full floor as its new headquarters. The remaining space in the four-story building will be leased to other non-profits, government and other office users. Collectively, these groups will provide services to over 17,000 low-income Austinites annually, including, Communities In Schools assisting 5,000+ students overcome challenges to their educational success, and FC providing wrap-around services to 12,000+ low-income residents in their housing units.

Additionally, FC will use the one-story building as FC’s flagship financial services building in south Austin. This will be the largest of two Community Financial Centers which will leverage over 600 volunteers to help more than 20,000 Central Texans file their tax returns free of charge each year (i); (ii) receive financial coaching and money management classes; (iii) enroll in healthcare through the ACA marketplace; and (iv) benefit from college, financial aid and career resources.

The Financing

The approximately $19.5 million dollar project was financed by FC pairing permanent debt from BBVA Compass Bank with its own equity to fund a self-leveraged structure. NMTC equity was provided by US Bank, along with $12 million of New Markets Tax Credit Allocation provided by PeopleFund CDE based in Texas and $5 million of New Markets Tax Credit Allocation from MBS Urban Initiatives CDE.

“Huge thanks to TAG for being part of Team FC. We interviewed quite a few NTMC consultants before making our selections early in the year, and I couldn’t be more pleased with the support you provided to us. Many times during this closing process I reflected on how pleased I was that we’d put together the right team. I appreciated your calm, problem-solving attitude throughout – as well as your expertise and infinite patience translatin NMTC into English for me – again, and again.”

Sabrina Butler, Director of Real Estate Development

TOTAL PROJECT COST:

$19,467,000

 

NMTC ALLOCATION:

$17,000,000

 

FINANCING COMPLETE:

May 2019

 

PROJECT SPONSOR:

Foundation Communities

 

CDES:

PeopleFund CDE / MBS Urban Initiatives CDE, LLC

 

NMTC INVESTOR:

US Bank

 

LEVERAGED LENDER:

Foundation Communities

 

ADDRESS:

2900, 3000 S IH 35
Austin, TX 78704

 

CENSUS TRACT:

48453002308

 

COMMUNITY OUTCOMES:

208 Direct Jobs
37,000+ LIC residents served annually

 

LOW-INCOME COMMUNITY:

Poverty Rate: 33.10 %
Median Family Income: 39.92% Federal Promise Zone
FEMA Disaster Area

 

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