YWCA Playing Ball With Federal Tax Program

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The YWCA of Greater Los Angeles Inc. has turned to a unique financing tool to raise money for the construction of its $70 million center in downtown Los Angeles.

The project at 1020 S. Olive St. – which will have housing, a charter school and job training facilities for at-risk, homeless and emancipated youth as well as young adults – is being financed by the New Markets Tax Credit Program. The federal program was created in 2000 to encourage development in low-income areas by enticing investors with tax credits.

The $70 million was raised in part by selling $7.8 million in tax credits to JPMorgan Chase and additional ones to Bank of America’s commercial bank subsidiary.

The project also received proceeds from the sale of tax credits by other organizations. The total proceeds were then leveraged by a loan.

“This opportunity has been extremely invaluable to this project. Not only does it provide the necessary funding but it has acquainted the financial industry with the needs of our at-risk youth,” said Faye Washington, chief executive of the YWCA of Greater Los Angeles.

A portion of the credits were held by the Los Angeles Development Fund, a non-profit entity established in 2006 by the city of Los Angeles to apply for and administer the tax credits. The fund, administered by the Los Angeles Community Redevelopment Agency, received a $75 million tax credit allocation in 2007. The YWCA deal is the fund’s first.

Jina Yoon, manager of capital finance for the CRA, said the credits were critical in creating the project’s core financing.

“It helps create of pool of equity that, when levered up, results in $70 million in funding,” said Yoon, who expects the fund to apply for more credits.

The CRA declined to release details about the transaction with JPMorgan Chase.

Site work began at the former parking lot last month. Once the 154,000-square-foot building is completed in November 2011, nearby YWCA offices will be consolidated there.

Network Lease

Current Media Inc., the San Francisco media company co-founded by former Vice President Al Gore that operates Current TV, has signed a four-year lease at Los Angeles Center Studios.

The network will use the 22,786-square-foot facility for both production and offices. The deal with landlord Bristol Group Inc. of San Francisco is valued at $2.4 million, according to industry sources. The transaction closed in November.

The 20-acre studio, just west of downtown Los Angeles at 1201 W. Fifth St., is home to such shows such as “Mad Men,” which are filmed by separate production companies.

Current TV consolidated four Hollywood offices when it moved last month into the space that had previously been occupied by network ReelzChannel, which moved to New Albuquerque, N.M., last year. As a result, the space needed little remodeling.

“It was pretty much plug and play,” said Gary Horwitz, a Jones Lang LaSalle Inc. broker who represented the tenant. The space includes about 18,000 square feet of ninth-floor offices and a 3,500-square-foot ground-floor studio.

When Reelz left in mid-2009, there were about two years remaining on its lease. A deal was structured that allowed Current TV to pay a lower rate for the first two years, with Reelz making up the difference for its early departure, according to John Tronson of Ramsey-Shilling Commercial Real Estate Services Inc., who represented the landlord.

The deal started at slightly less than $2 per square foot per month and later will escalate to about $2.80 per square foot.

The development’s 12-story tower is about 90 percent leased and two low-rise buildings are 85 percent leased.

Bristol was also represented by Chris Bonbright and Tom Barich of Ramsey-Shilling.

Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.

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