SB Friedman assisted Northern Trust in closing NMTC financing to support the operational expansion of Purpose Built Schools. We were instrumental in developing an innovative operating business financing structure that also incorporated a local Community Development Financial Institution (CDFI) to broaden the benefits of NMTCs.
Purpose Built Schools has pioneered a holistic educational model that puts economically disadvantaged children on a trajectory for college and career successes. The key to this model is extensive wraparound services that engage parents and address specific factors that interfere with success. As Purpose Built School has expanded to lead turnaround efforts of some of Atlanta Public Schools’ worst performing schools, it needed access to flexible working capital to support its growth.
SB Friedman was essential in bringing together many different parties to establish an innovative financing structure to support a less traditional use of NMTC financing. In this role, we:
- Coordinated a Northern Trust line of credit and community investment to serve as leverage for the transaction;
- Created an innovative financing structure that allowed Northern Trust to use its NMTC allocation to invest through Atlanta Neighborhood Development Partners (ANDP);
- Structured financing to create a permanent “EQ2” subsidy for ANDP;
- Negotiated deal terms that balanced minimizing the administrative burden of the NMTC for Purpose Built Schools while minimizing the risk for Northern Trust; and
- Provided technical assistance to ANDP and Purpose Built Schools to maximize the benefits of NMTC.
Results: Purpose Built Schools successfully closed on NMTC financing and, due to closing efficiencies, generated additional subsidy than had been initially contemplated. Purpose Built Schools is currently expanding its operations into additional schools with the subsidy provided by the NMTCs.