Healthcare Community Development Group, LLC (HCDG), a certified
Community Development Entity (CDE), served as the New Markets Tax
Credits (NMTCs) project leader and allocation aggregator in connection
with the issuance and leveraging of the $15.7M raised through
traditional Series A Financing ($13.4M) and Series B NMTCs ($2.3M) for
Cuyuna Range Hospital District, Crosby, MN.
"Federal Government NMTCs-qualified subsidies are an attractive
supplemental financing strategy allowing not-for-profit health systems,
such as Cuyuna Range Hospital District, to continue meeting growth,
infrastructure and community health services needs, while effectively
reducing the overall amount of money they need to borrow for their
projects," Jacque J. Sokolov, Chairman and CEO of HCDG, said. "These are
complex transactions, however we serve our clients with an end-to-end
solutions approach that includes deploying a highly-skilled project team
committed to minimizing administrative and finance department disruption
while working to bring funding to a successful conclusion."
"The HCDG-led Cuyuna Range Hospital District NMTCs transaction team
included the law firms Paul Hastings and McKenna Long & Aldridge and the
accounting firm of CohnReznick," Sokolov said. "HCDG also brought
SunTrust Bank into the transaction as the tax credit investor, who in
turn brought Nixon Peabody into the funding process as the tax credit
investor's law firm."
According to Kyle Bauer, chief financial officer of Cuyuna Range
Hospital District, securing funding by using an NMTCs strategy resulted
in the opportunity to borrow less money and still have the required
funds needed for the project through the Federal Government's
HCDG's core services offering includes complete NMTCs evaluation and
investment funding services, including:
About the New Market Tax Credit Program
The New Markets Tax Credits Program (NMTCs Program) was established by
Congress in 2000 to spur new or increased investments into operating
businesses and real estate projects located in low-income communities.
These investments are expected to result in the creation of jobs and
material improvement in the lives of residents of low-income
communities. The NMTCs Program attracts investment capital to low-income
communities by permitting individual and corporate investors to receive
a tax credit against their Federal income tax return in exchange for
making equity investments in specialized financial institutions called
Community Development Entities (CDEs).
The credit totals 39 percent of the original investment amount and is
claimed over a period of seven years (five percent for each of the first
three years, and six percent for each of the remaining four years). The
investment in the CDE cannot be redeemed before the end of the
About Cuyuna Range Hospital District
Cuyuna Range Hospital District, Crosby MN. owns and operates Cuyuna
Regional Medical Center ("CRMC"), a critical access hospital located in
the rural community of Crosby, Minnesota. As an acute care hospital,
CRMC is a comprehensive medical center recognized throughout the region
for its progressive approach to innovative healthcare comprising more
than 900 physicians, medical professionals and support staff working
together to provide the highest level of care and compassion. The
financing strategy consisted of a direct purchase with a commercial
banking entity (the "Purchaser") of the fixed-rate Series 2013A Bond.
HCDG worked with investment bank Piper Jaffray toward securing the
Purchaser's 15-year capital commitment. The Series 2013A Bond does not
currently carry a rating. The 15-year commitment resulted in a low cost
of capital based on interest rates as of the date of transaction closing.
About Healthcare Community Development Group,
HCDG is a nationally-certified Community Development Entity (CDE) and a
wholly owned subsidiary of SSB Solutions, Inc. SSB Solutions is a
healthcare specialty consultancy that has served clients in 49 states in
over 150 markets for the past 20 years.
HCDG is the only national CDE exclusively focused on helping healthcare
organizations reduce growth investment costs using the New Markets Tax
Credits program. The company is a leader in setting the pace of helping
not-for-profit, community-based healthcare systems use both tax-exempt
bonds and NMTCs as their funding strategies.
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