Twinning Historic Tax Credits and New Markets Tax Credits

Charlie Werhane

Vice Chairman/COO

Enterprise Community Investment, Inc.

November 8, 2007

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Enterprise NMTC Portfolio Overview

$515 million in allocations

26 NMTC investments closed

12 projects include the twinning of HTC and NMTC:

Broad product mix

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Enterprise Portfolio

Closed HTC/NMTC Transactions

47%HTC/NMTC

53%Non

HTC/NMTC

340 mm

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Old Post Office – St. Louis, MO Fashion Square – St. Louis, MO Drury Hotel – San Antonio, TX Oak Street School – Buffalo, NY Court Square Center – Memphis, TN

Project Impact

Examples

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Court Square Center

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Court Square Center

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Sources and Uses:

($ in millions)

Sources: Uses:

A Loan (Perm. Loan) $8 Site Acquisition $1 B Loan (Sec. 108 Loan) $8.5 Hard Costs $31.7 C Loan (BEDI Loan) $2 Soft Costs

$6.8 D Loan $.2 Other $11.5 HTC Equity $6.3 NMTC Equity $11.3 Insurance proceeds $9.1 Other $5.6

Total: $51 Total: $51

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NMTC Equity generated by twinning HTCs and NMTCs

Total Federal HTC Equity (based off of QREs) is $6.3MM *

Total Loans and Equity infused into project generating NMTC:

A Loan (Perm. Loan) $8MM B Loan (Sec. 108 Loan) $8.5MM C Loan (BEDI Loan) $2MM D Loan $.2MM Federal HTC Equity $6.3MM *

NMTC Equity boost to project on HTC approx. $2MM

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Complexity

ESIC has implemented the organizational ESIC has implemented the organizational structure to allow investors to take full structure to allow investors to take full advantage of the New Markets Tax Credit.advantage of the New Markets Tax Credit.

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Example of a Master Lease Structure - 1

Landlord

Investment Fund

$ QEI

Master Tenant$ Equity

$

QLICI

Loans

$ QLICI

Equity

EnterpriseCDE

HTCs

HTCs

HTCs, NMTC,

Distributions

Debt Service

EnterpriseAllocatee

Allocation

Subtenants

Developer

Equity/Property

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Loan A= EB&T Leverage Loan State HTC Loan Loan B= Crown Village Loan, plus, State HTC Loan from Managing Member Loan C= Portion of NMTC equity to balance QEI, less CDE fees

$2,629,842 Loan D= HTC equity plus balance of NMTC, less CDE fees and equity to MTCredits

NMTC Equity 100.00%

$5,371,275 Federal HTCsFederal HTC Equity NMTCs

$3,080,170 17,500,000 QEI $1,655,000

Loan

$470,000 Loan

LIHTC & NMTC Lease Proceeds $4,763,713

$12,500,000

QEI

Federal HTCs

6,471,613$5,000,000

QEI

$725,000

Capital

$6,001,613 CDE FEE

$937,500

$1,500,000 Equity

$1,707,900 $100,000

Contributed CDE FEE

Property

$235,000 $1,930,000

Ground Lease Debt Service

6,001,613 Rent

Contributed Cash Flow/Profit/Losses

$2,765,000 Property Loan C Loan B Loan A Loan D Equity Federal HTCs

$1,930,000 $2,513,945 $7,393,555 $1,655,000 $2,300,000 $2,600,000$2,765,000

2,212,000 at closing Equity:

553,000 at completion $1,707,900 Combined

Total Equity Equity: $2,600,000

$3,637,900 Cash Flow/Profit/Losses

32740003274000 Rent

State HTC Loan Cash Flow/Profit/Losses 40-year lease$2,629,842

State HTC Certificate Federal HTCs: 100%

35-year lease

SHTC Certificate RentEnterprise CDE Loan A $1,655,000

$2,896,346 Enterprise CDE Loan B 7,393,555Purchase of Credits Development Services Enterprise CDE Loan C 2,513,945

Dev. Fees MBS CDE Loan D 2,300,000$3,541,613 2,765,000 MBS CDE Equity 2,600,000

Capital on behalf of Contributed Property 1,930,000

ONSLRG & PDC I Gen. Ptnr. Equity 1,707,900State HTC Investor 100

$20,100,500Uses $20,100,500Gap (0)

Rent

$776,613Development Fees

Dev. Fees$2,765,000

Investment FundMBS-UI Investment Fund III, LLC

$17,500,000Non-Managing Member: 100%

Non-Member Manager

Federal HTC & NMTC Investor

US Bank

Leverage LenderEnterprise Bank & Trust

Enterprise CDEESIC New Markets Partners XVI, LP

$12,500,000Investment Fund: 99.99%

CDE Sponsor: .01%

McCormack Baron Salazar CDEMBS-UI Sub-CDE III, LLC

$5,000,000Investment Fund: 99.99%

CDE Sponsor: .01%

Crown Village Associates, LLC

Non-Profit Land Owner $6,001,613 Capital and

$470,000 Up-Front Lease Proceeds

RHCDA Bridge Loan

CDBGMoney

RHCDA ProgramSources

Bridge Loan

QALICBFourteenth Street Mall Commercial, L.P.

NMTC PartnershipMaster Tenant LLC : 10%

Managing Member (Affiliate) : 89.99%State HTC Investor: .01%

Master TenantMaster Tenant, LLC

100% McCormack BaronState HTC Limited Partner (of QALICB)Fourteenth Street Mall Commercial II, LLC

PDC XXVIII, Managing Member .01%Loss Partner, 99.99%

Taxable Subsidiary(Loss Partner Fees of $266,504)

Proceeds of LIHTC and

NMTC Lease Pmts.

CDE Sponsor CDE Sponsor

State HTC PurchaserUS Bank

Old North St. Louis Restoration Group (ONSLRG)

Tax Exempt Neighborh'd Ptnr. Member, Crown Village Assoc.

LLC

St. Louis Public Development Corp. (PDC I)

RHCDA Tax-Exempt AffiliateManaging Member, Crown Village

Assoc. LLC$6,001,613

DeveloperCrown Village Development,

LLC(LIHTC and NMTC

Developer)

LIPartnershipPDC I (Mng.

Member)

ONSRLG (Member)

Occupant

Sub-TenantFor-Profit

General Partner ofQALICB

(For-Profit Subsidiary of Crown Village Associates, LLC)

State HTC Bridge LenderEnterprise Bank & Trust

$2,629,842 Bridge Loan

$2,629,842 Repyament

NMTCs

Example of a Master Lease Structure - 2

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THANK YOU