MMF Announces New Product
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The Michigan Magnet Fund (MMF) announced the closing on loans totaling $6,093,750 to the Shiawassee Performing Arts Center (SPAC), the new restored home of the Owosso Community Players (OCP), the project sponsor. The SPAC will use the proceeds of these loans along with other funds to restore the historic Lebowsky Theatre in Downtown Owosso, Michigan. The Lebowsky Theatre was built in 1926 by Joseph H. Lebowsky and designed by leading Detroit architect, George J. Bachmann. The Theatre featured performers from the famous B.F. Keith Vaudeville Circuit. The Lebowsky Theatre is Owosso’s last remaining historic theatre. The building has been vacant since February 2007 when it was destroyed by fire. Since the fire, Owosso Community Players has performed out of a small studio theatre donated by Chemical Bank. When completed, the Shiawassee Performing Arts Center will allow Owosso Community Players to return to big stage productions that are projected to draw as many as 17,000 people to downtown Owosso. The renovations are expected to be complete in March 2014 with the first performances taking place shortly thereafter. Corporation (MEDC), SDA, Chemical Bank,and PNC Bank toimplement the MMF financing of the theatre.
Serving Low-Income Communities
The project meets MMF’s goal of only investing in Low-Income Communities. It is located in a non-metropolitan (rural) county in central Michigan and is in census tract 26155030600, which according to the 2006-2010 American Community Survey has a poverty rate of 32.3%, median family income 40.8% of the State median income, and an unemployment rate of 17.4%. The minimum requirements under the New Markets Tax Credit program are 80% of State median family income or 20% poverty levels.
"It Takes a Village"
The MMF considers the SPAC an “it takes a village” project. It will not only restore a historic theatre and community theatre group to greatness; it will help re-establish the economic vitality of the community’s downtown area. Twenty-three downtown businesses have indicated they would expand and hire new people, if OCP’s audience returns to its pre-fire level. Congressman Dave Camp helped support the project. An important component of this project’s fundraising success is attributed to the nearly $1.6 million donated by Owosso area residents toward the restoration. In addition, Chemical Bank, The City of Owosso, and MMF have provided bridge loans to the project totaling over $3,000,000. These bridge loans allow SPAC to utilize Michigan Historic and Brownfield Credits and Community Revitalization Program Funds in the renovation of the project. The U.S. Department of Agriculture (USDA) also provided $940,000 in funding for the project. It took strong community support along with the City, State, Michigan Economic Development.
MMF Provides Flexible Terms
The terms of the MMF loans are more flexible than found in the market. The MMF loans are subordinated to the USDA loan, have a 1% interest rate, exceed the properties’ appraised value, have a 32-year term, and are “interest only” for seven years. All these terms are significantly more flexible than those SPAC may have received from conventional lenders. These flexible terms were made possible by a $1.7 million equity investment by PNC New Markets Investment Partners, an affiliate of PNC Bank. It was combined with other funds to make a $6.25 million Qualified Equity Investment in an MMF subsidiary. In return for its investment, PNC will receive approximately $2.4 million in New Markets Tax Credits over a seven-year period.