Combining State and Federal NMTCs in
Florida for the Glazer Children’s Museum
NEW MARKETS TAX CREDIT CONNECTION
Prepared by:
Matthew B. Wexler, Cross Sector Consulting
Summer 2011
Combining State and Federal NMTCs in Florida for the Glazer
Children’s Museum
Tampa, FL: Several states have created New Markets Tax Credit (NMTC) programs modeled on the
federal version, including Florida, Louisiana, Kentucky, Missouri and Illinois. Combining state and federal
NMTC credits are a natural match in order to aggregate the benefits of both programs. Utilizing a $20.5
million Qualified Equity Investment (QEI), the Children’s Museum of Tampa d/b/a the Glazer Children’s
Museum financed its 53,000 square foot facility in downtown Tampa through this combination. The
transaction required collaboration between two Community Development Entities (CDE), one federal
NMTC investor, a separate state NMTC investor, and two bridge loan providers.
The capital campaign for the Glazer Children’s Museum (GCM) in Tampa, Florida began in 2007 and
found many generous donors in the region, led by the Glazer Family Foundation. But in 2008, the
philanthropic environment suffered a double setback with the stock market dip and the banking crisis.
New donations slowed to a trickle for GCM which threatened the vision of a brilliant new facility. In the fall
of 2009, with a little more than half the money raised, and another quarter pledged but not available for a
few years, Al Najjar, CEO of the museum, faced a difficult decision. Pricing for construction would not stay
down for much longer; the museum had executed a land lease with the City of Tampa, and the existing
donors, although patient began to grow a little restless. Najjar remained undeterred and with the help of
Fifth Third Bank, secured interim financing to begin construction. Yet with a permanent financing gap of
about $4.5 million, the future of the GCM remained uncertain.
Najjar struck upon the idea of NMTCs as a potential funding source and began to work with Cross Sector
Consultants to find NMTC allocation and structure the deal. Anticipating a need for more than $20 million
in NMTC allocation authority, the deal would likely require more than one CDE to participate.
Stonehenge Community Development, LLC (Stonehenge) was the first to step forward with federal and
state NMTC allocation, attracted to GCM chiefly by the significant impact of the museum’s activities on
the local minority population and the museum’s potential to catalyze additional economic development,
both hallmarks of its NMTC strategy.
Florida state NMTCs were created in 2009 through the New Markets Program Act in the State of Florida
(Florida Statues Section 288.9913 et. seq.) and are overseen by the Florida Governor’s Office of Tourism
Trade and Economic Development.
“We were thrilled to be able to combine our allocations of federal and state NMTC for the benefit of the
Glazer Children’s Museum. Beyond the project’s fit within Tampa’s downtown revitalization plan, the
museum took a purposeful approach to making its resources accessible to local “Title 1” public school
students, many of which are of low-income and minority backgrounds. Moreover, fun exhibits designed to
increase the experience of students in the STEM fields (Science, Technology, Engineering and
Mathematics), were compelling factors in our decision to support the project,” said L’Quentus Thomas,
Director at Stonehenge.
Capital Trust Agency CDE (CTA) immediately paired with Stonehenge, seeing the new museum as part
of a larger initiative. “The Glazer Children’s Museum joins the Tampa Museum of Art and the Straz Center
for Performing Arts to complete a revitalization effort along the Hillsborough River in downtown Tampa.
We are very proud to participate in this effort and to use NMTCs for such a tremendous community
benefit,” exclaimed Ed Gray, III, Executive Director of CTA. With $10 million of federal allocation from
CTA, the NMTC net benefits would fill the financing gap.
U.S. Bank served as the state NMTC investor. Fifth Third, which had so strongly supported the museum
with interim construction financing, acted as federal NMTC investor. Bruce Bryant, Vice President at the
Fifth Third Community Development Corporation, remarked, “Our bank already had a valuable
relationship with the Glazer Children’s Museum. It only made sense to direct our NMTC equity investment
into this project.”
With two CDEs, one federal NMTC investor, another state NMTC investor, and two bridge loan providers,
the complex transaction required creative structuring that enabled the federal and state credits to work
together, despite differences in qualifying criteria. Unlike federal NMTC, the state of Florida’s qualification
criteria include a minimum wage threshold, a defined set of eligible industries, and a leaning towards
business QALICBs and owner occupied real estate projects. Ultimately, the group collaborated to develop
a workable financing structure, leveraging the experience of Fifth Third Bank and U.S. Bank, the creativity
of Stonehenge and CTA (the CDEs) and the support of the State of Florida.
“The flexibility of the NMTC programs coupled with the hard work of several dedicated organizations
made the financing of the Glazer Children’s Museum a success,” stated Matt Philpott, Senior Vice
President of NMTC, HTC and ITC Investments for U.S. Bank.
Closing the NMTC transaction enabled the GCM to close the financing gap to an amount which
outstanding donor pledges will pay off within thirty months. Al Najjar praised the entire team, “NMTCs
have ensured the future of this facility as a community resource for the children of the Tampa Bay region
and their families. On behalf of our Board, our members and all our visitors, we thank you!”
In its first six months of operations, the museum has received over 128,000 visitors, exceeding
projections by 35 percent. In that same time, GCM has also delivered over 300 curriculum based
workshops for 16,700 local students, and opened its doors for almost 22,000 free visitors. For more
information, see www.glazerchildrensmuseum.org.