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Rainmaker is the public finance plan specialist...

 

  

TIF Plans, TIC Plans & PILOT Plans...

Public or private, Rainmaker is the firm to turn to when it comes to preparing Tax Incremental Finance (TIF) Plans, Tenants-In-Common (TIC) Syndication Plans, Payment-In-Lieu-Of-Taxes (PILOT) Finance Plans or Community Development District (CDD) Finance Plans.

Which is the one for you and how would you know?  Following along and decide which fits your business case:

Tax Incremental Finance Plans.  A TIF plan is a way to provide construction financing for retail and mixed-use projects by pledging a share of the future property tax revenues the resulting business deal is likely to generate and using these pledged funds as a guarantee the financing will be paid off.  This is not a freebie and the financing will be subject to current commercial mortgage underwriting requirements because the resulting bonds are sold to the investing public.

Tenants-In-Common Syndication Plans.  A TIC plan is used to raise capital for a commercial real estate development transaction.  TIC plan transactions have a lot of built-in flexibility and do not necessarily require the sponsor to accept a huge dilution of their equity (as would be the case with a private placement offering of equity securities).  There are all kinds of rules and issues here, but TIC plans are very flexible and can be the developer's best friend.

Payment-In-Lieu-Of-Taxes Finance Plans.  PILOT plans are used to generate additional funding (bond) for a real estate development project in a manner that is similar to that of the TIF plan.  PILOT plans are typically "back-end" loaded take-out financing so they are not particularly helpful to the developer seeking construction funding, per se.

Community Development District Plans.  CDD plans are used to have the public pay for public improvements to real property including roads, utilities, sidewalks and the like.  CDD Plans fund on the backside of the development stream once the improvements are complete and usable; this means CDD plans are used to add additional profit to the developer's pocket but not as development financing, per se.

Think of TIC plans as your way of raising additional cash for the enterprise on a basis that guarantees your TIF plan or PILOT plan outcome because at the end of the rainbow, the financing is sold to institutional buyers and not fools.  The project will have to go through underwriting somewhere along the line and today's turbulent financial conditions means higher debt service coverage ratios and lower mortgage financing loan-to-value ratios are going to be the key issues.  Underwriters are going to want to have a "fortress balance sheet" to work with and that means more working capital being applied to reserves and working capital is not something that bond underwriters like to pay for so the advent of commercial real estate syndications provides another well the developer can include in the process along with tax credits and CDD plans to provide even more strength for the benefit of the prime mortgagee.

Still unsure?  Talk to a Rainmaker consultant and we'll be happy to explain all of the issues and the opportunity that may best describe your situation.

 

About Rainmaker...

Rainmaker Marketing Corporation is the brainchild of Clint Lovell, a seasoned business finance consultant with more than 20 years experience.  Rainmaker is a B2B consulting firm that was incorporated in 1994 for the purposes of providing market feasibility studies to businesses seeking capital financing in the commercial and institutional markets.  Today, Rainmaker Marketing Corporation provides a comprehensive array of due diligence documentation services for most major industry groups.  Rainmaker Marketing Corporation also provides syndication management services for fractional commercial real estate syndicates that can provide mezzanine gap funding for income-producing commercial property developments as early as the pre-construction phase.  Rainmaker Marketing Corporation serves clients throughout North America and the Caribbean Basin.

Rainmaker Marketing Corporation, Inc.

15519 Dawnbrook Drive, Houston, Texas 77068

281.537.1200  

consultants@rainmakermarketing.com

© Copyright, 2009 Rainmaker Marketing Corporation, Inc.  All rights reserved.

  

A Few Words on Change...

Clint Lovell, the Managing Principal of Rainmaker, has written a book on the subject of capitalism and the creation of a new economic society that ends our reliance on taxation and retires all of our national debt.  The book is called The Fix and you can order an advance copy now at www.the fixbookstore.com.  Order today and we'll pay your shipping, saving you some real change. 

What's New...

Read our latest whitepaper on capitalization strategies and commercial real estate syndications that provide developers with a new arsenal of capital finance weapons they can deploy in the middle of this recession.  Click here and download the whitepaper free! 

 
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