Case Study

NMTC Case Study for Rooms To Go

May 24, 2021

Project

Rooms To Go is a Florida-based furniture store chain with approximately 225 stores operating throughout the southern United States. It focuses on offering quality home furniture at affordable prices. The company constructed, developed, and equipped a $57+ million distribution, warehouse, and retail/outlet facility on a 120 acre in Non-Metropolitan Harnett County. The 1.4 million square foot facility houses a state of the art Rooms To Go showroom, a Rooms To Go Kids/ Teens showroom, an Outlet Center and a large distribution center housing tens of thousands of pieces of furniture. Located along a highly visible portion of I-95, Rooms To Go will receive and warehouse furniture, prepare furniture for shipping to customers, load home delivery trucks, and sell merchandise to customers from a retail outlet.

Harnett County is part of the Southeastern Economic Development Commission (SEDC) Region, consisting of 12 counties in the extreme southeastern corner of North Carolina. This region is the largest Economic Development District in NC. Per the 2012 Comprehensive Economic Development Strategy, in the period between 1990 and 2010, this region was decimated by
job losses – over 38,000 industrial jobs alone – as a structural shift in the region’s economic took place as companies downsized and shifted activities offshore to countries with lower wages, and less business and environmental protection regulations. These job losses and record unemployment wreaked havoc on income. The Rooms To Go investment is projected to create 626 direct jobs to be filled by community residents in a highly distressed census tract with 9.5% unemployment.

The Financing

With total project costs over $57 million, Rooms To Go received $30 million in NMTC Allocation from CAHEC New Markets ($10 million), CCG Community Partners ($10 million), and SunTrust Bank ($10 million). Project debt was in part self-leveraged by Rooms To Go and by additional conventional debt from SunTrust Bank. The project was originally designed to be 1.2 million square foot with future expansion capacity. However, due to sales growth, the project size grew by over 230,000 square feet; thereby, increasing its total project cost. As conventional financing for
rural projects in high-risk areas is difficult to secure, without the NMTC subsidy, additional equity funding would have need to be raised to accommodate the growth. This would have either delayed the project timeline or reduced the project’s scope.

An integral part of the Harnett County economic development plan, the project was strongly supported by the local community and the State of North Carolina. As a result of the private and public investments, Rooms To Go would become the 2nd largest industrial employer in
Harnett County.

“It’s a great day to be in Harnett County.
I think what you see here behind you is a beacon. It’s a beacon that’s going to cause hundreds of people to work at good jobs and good paying jobs everyday.”

– David Lewis, North Carolina State Representative

 

TOTAL PROJECT COST:

$57,800,000

 

NMTC ALLOCATION:

$30,000,000

 

FINANCING COMPLETE:

May 2014

 

PROJECT SPONSOR:

Rooms To Go

 

CDES:

CAHEC New Markets, LLC
/ CCG Community Partners, LLC / SunTrust Community Development Enterprises, LLC

 

NMTC INVESTOR:

SunTrust Bank / US Bancorp Community Development Corporation

 

LEVERAGED LENDER:

Rooms to Go / SunTrust Bank

 

ADDRESS:

Saddlebred Road, Dunn, NC

 

CENSUS TRACT:

37085070200

 

COMMUNITY OUTCOMES:

1,454,147 Square Feet
626 Direct Jobs

 

LOW-INCOME COMMUNITY:

Poverty Rate: 25.7%
Median Family Income: 72.1% Non-Metropolitan County

 

NMTC Case Study for Rooms To Go