SB Friedman has assisted Esperanza Health Center with two successful NMTC closings totaling $30 million to fund a 59,000-square-foot, state-of-the art primary care and health/wellness hub in the Kensington neighborhood of Philadelphia, Pennsylvania.
The initial project involved acquisition and conversion of a historically prominent former bank building into a comprehensive facility offering a range of primary, behavioral, and mental health services, a healthy foods-focused café, and a pharmacy, plus acquisition/cleanup of a nearby vacant lot to create a structured parking facility serving the health center. SB Friedman assisted the client with successfully navigating multiple financial structuring challenges, including designing a process for both components of the project (clinic and parking structure) to be included in the same financing, despite the fact that they had different start dates and sit on separate sites. The closing was smooth and efficient, and the amount of NMTC net subsidy exceeded the client’s initial expectations.
We then assisted Esperanza with attracting NMTC allocation and efficiently executing an $11.5 million NMTC financing Esperanza’s Phase 2 Community Health and Wellness building, which is being constructed on the remainder of the vacant lot. On EHC’s behalf, we negotiated intercreditor provisions that will allow the new building to maximize its use of NMTCs while avoiding duplication of the work to execute the initial Phase 1 financing structure.
In both cases, we helped Esperanza attract the full targeted amount of NMTC allocation and execute smooth, on-time, on-budget closings that maximized the yield from the NMTC subsidy to close EHC’s financing gap.
Results: SB Friedman has also continued to assist Esperanza with post-closing, including providing a summary of all key financial and reporting obligations, guidance on how to record NMTC closing-related entries on EHC’s books, and successfully navigating the construction draw process.