SB Friedman recently completed an underwriting assignment for the City of Chicago evaluating the potential to provide a TIF-backed HUD 108 loan to address a mid-stream financing gap for the Green Exchange Project. This 227,000 square foot, $55 million historic rehab of an old lamp factory on the City’s Northwest Side will transform it into office, retail and live/work space for a range of green industries and service businesses. Our work involved evaluating the potential repayment risks and TIF/HUD 108 loan structure that could allow the City of Chicago to borrow against future CDBG allocations while using TIF proceeds to protect against default risk. This structure allows good access to capital and cost of capital, while ensuring that the City’s future CDBG fund availability should not be impacted. Our work included reviewing projected tax credit proceeds and how the equity pay-ins for these credits could be used to further protect the City’s loan position.
Results: The proposed transaction was approved by the Chicago City Council in mid-2010, and is in the process of final structuring. Our firm is continuing to assist the City of Chicago in this regard.