The Finance Team
The finance practice team in the Atlanta office of Seyfarth Shaw LLP (the “Finance Team”), led by Dan McRae, concentrates on practice areas involving finance, incentives, and investment transactions, as well as representation of public bodies and private sector entities. The Finance Team’s legal products fall into the following general areas: (i) representation of local governments and local authorities; (ii) municipal bond financing; (iii) capital markets financings, including CMBS transactions, “bondable” leases, synthetic leases and other off-balance sheet (OBS) transactions, capital leases and operating leases; (iv) structuring and organizing new business entities, including equity financing; and (v) the use of available federal, state and local incentives to assist companies and communities with business locations and expansions.
Looking just at more recent periods, since 2006, the Finance Team has closed 170 bond and note financings having an aggregate principal amount of $9,450,044,232. In addition, we have handled commercial real estate developments, and the creation and certification of tax allocation districts (TADs, or in other states, TIF districts) from start to finish. We are proud that the total number of jobs created or saved by projects we served during that period amounts to almost 19,000.
The lawyers in the Finance Team have highly diversified experience in public finance. Our lawyers are all listed in the “Red Book” directory of nationally recognized bond counsel and are members of the National Association of Bond Lawyers. Our experience includes serving as authority counsel (issuer’s counsel), bond counsel, underwriter’s counsel, borrower’s counsel, trustee’s counsel, special tax counsel, disclosure counsel and bank counsel. The experience of the lawyers on the Finance Team includes virtually all areas of municipal finance, local authority law, and local government law, including, but not limited to, the following:
- specialized issues of local government and authority law
- intergovernmental relations and intergovernmental agreements
- special district financings
- structured finance transactions; in 2010, these included tax-exempt bonds issued to monetize Illinois’ tobacco settlement, and tax-exempt bonds issued for a new Midwest plant to process oil into asphalt;
- “higher ed” financings for both public and private colleges and universities
- public/private partnerships, and public/public partnerships, including privatization transactions
- “project finance” transactions involving layered “capital stacks,” including the use of proceeds of New Markets Tax Credit (NMTC) investments, EB-5 investments, film tax credits such as under the Georgia Entertainment Industry Investment Act, state and federal Historic Rehabilitation Tax Credits, and traditional private placements of equity and near-equity securities with accredited investors and institutional investors
- new bonds and new bond features under the American Reinvestment and Recovery Act, as well as other “stimulus” programs, “GO Zone” bonds, etc.
- housing finance, including tax-exempt multifamily housing bonds (affordable housing) and single family residential financing, including qualified single family loans and taxable revenue bonds for workforce housing
- both “governmental purpose bonds” and “private activity bonds”
- new money, refunding and multipurpose issues of bonds and notes
- the use of derivative products, such as interest rate swaps and forward purchase agreements
- the issuance of fixed rate bonds, floating rate bonds and multimodal bonds having daily, weekly, monthly, quarterly, semi-annual, commercial paper, and extended interest periods
- the use of bond insurance, letters of credit, guarantees and surety bonds for credit enhancement
- statutory incentives, including the Mega Project Tax Credit, the Jobs Tax Credit, the Quality Jobs Tax Credit, the Opportunity Zone Jobs Tax Credit, and the Georgia Entertainment Industry Investment Act
- the issuance of bonds involving:
- roads, bridges and related improvements;
- public facilities, including airports, parking facilities, public hospitals, police stations, municipal marinas, golf courses, recreational centers and senior citizen centers;
- facilities for 501(c)(3) organizations (facilities for colleges, universities, schools, nursing homes and adult congregate living facilities);
- rental housing;
- governmentally and privately owned water and sewer facilities;
- manufacturing plants, distribution facilities and other privately operated industrial and commercial facilities;
- the funding of municipal pension liabilities and accrued compensated absence (vacation, sick leave and overtime) liabilities;
- issues of bonds payable from: ad valorem taxes (general obligation bonds), special assessments, utility system and other enterprise fund revenues, guaranteed entitlement funds, excise taxes, municipal franchise fees, tax increment revenues, tourist development tax revenues, project revenues, installment loan and lease payments (private activity bonds), payments in lieu of taxes and unspecified lawfully available non-ad valorem tax revenues;
- the simultaneous issuance of tax-exempt and taxable bonds to finance the governmental use and private use portions, respectively, of a single project;
- the simultaneous issuance of tax-exempt and taxable bonds to finance the manufacturing and non-manufacturing portions, respectively, of a single project;
- the issuance of bonds that are payable from payments in lieu of taxes, i.e., PILOT bonds, or payable from tax increments and sales and use taxes (i.e., tax allocation bonds, sometimes called TAD bonds or TIF financings);
- lease/purchase certificates of participation issues;
- draw-down bonds;
- municipal forward refunding warrants; and
- public and private offerings.
The Finance Team helps clients raise or provide capital for projects and businesses. We work with public bodies, capital sources, members of the financial and real estate industries, and ultimate users and producers, such as large and small companies that occupy facilities, develop, produce or distribute products or services, and acquire or joint venture with other companies. Many of these transactions are cross-border. The Finance Team also helps public bodies with their projects and their facilities and infrastructure needs. We assist private companies and public bodies with development and re-development projects, including tax increment (tax allocation district) financing, community improvement district financings, other financings that monetize project taxes, and enterprise zones. The Finance Team has an active practice involving federally tax-exempt bonds used to finance activities and facilities for “non-profits” that are federally recognized as tax-exempt “501(c)(3) organizations”; such bonds might in a particular case be available to finance facilities for religious organizations and their affiliates, hospitals, clinics, nursing homes, adult congregate living facilities, affordable housing, etc.
Here are some examples of how clients use our legal services:
- By the time of the expiration of the Recovery Zone Bond program, we held a top ranking in Georgia as bond counsel in terms of closed Recovery Zone Bond financings. We have also acted as Special Counsel for a Facility Bond financing for a general store in Columbia, South Carolina.
- The Finance Team’s advisory work includes statutory incentives such as the Mega Project Tax Credit, the Jobs Tax Credit, the Quality Jobs Tax Credit, the Opportunity Zone Jobs Tax Credit, and the Georgia Entertainment Industry Investment Act (the film tax credit), as well as “monetization” of statutory credits where possible. We obtained for a business locating its headquarters to Georgia the first ever qualification for the Mega Project Tax Credit. Our work with communities includes obtaining a difficult Opportunity Zone designation for a site for a new manufacturing plant for a foreign industry.
- The Finance Team has been a leader in public/private partnerships (“P3”) since they were first used in Georgia, including work respecting a managed lanes (toll roads) project, co-located hangar facilities comprising an aerospace sustainment complex to be developed by the State of Georgia/middle Georgia communities on publicly owned land contiguous to an Air Force Base, and arrangements for the privatization of a state park and lodge and for the redevelopment of a closed paper mill as a mixed-use development. We have also handled private prison and private jail projects, including the creation of specialized new local authorities for that purpose.
- We have contributed to the redevelopment and growth of urban areas by applying our bond and real estate financing techniques to mixed-use and multifamily developments, both vertical and street level. These developments alone account for over $2 billion in new investment.
- We financed a $5 million warehouse for an internationally known fashion company using “taxable floaters.” Derivatives (swaps) were used to fix the interest rate on these variable rate demand bonds.
- We used $11.5 million in PILOT bonds to finance infrastructure for a community’s industrial park. As lender’s counsel in another PILOT bonds transaction, our innovative financing techniques enabled the issue of $76 million in taxable bonds to finance a mixed-use development providing hotels and offices to serve an airport.
- We were project counsel and bond counsel for a $40 million distribution center for one of the nation’s largest consumer electronics retailers that involved taxable bond financing, implementation of “freeport” (inventory tax abatement), and a multiyear, multimillion dollar road improvement program.
- We combined “bonds for title” and synthetic leases to finance and provide incentives for an $80 million manufacturing campus.
- We handled a $6 million project that provided a consumer products manufacturing facility for the world’s oldest corporation, including acquisition, development, construction and incentives.
- We also handled a $50 million project for the world’s largest contract-electronics manufacturer, that involved acquiring, expanding and lease-financing a manufacturing campus.
- When the nation’s largest privately owned company needed new refrigerated warehouses in several states, we handled the acquisition, construction, and financing aspects, using bondable leases for the financings, which aggregated over $60 million.
- The Finance Team represented an owner in obtaining conduit financing for data centers totaling over $200 million and involving senior loans, senior mezzanine loans, and junior mezzanine loans.
- We closed one of Georgia’s largest private sector transactions for financing and incentives for buildings and equipment for an internationally ranked financial services institution. The total for all series amounted to $500 million, funded through a combination of syndicated bank loans, leveraged equipment leasing and institutional private placements.
- For a company headquartered in Georgia, we structured and documented one of the State’s largest automotive industry expansions. Incentives for the project included grants amounting to $27 million, as well as a property tax “abatement” program and other important local incentives.
- We handled a $75 million equipment financing for a large Georgia-headquartered Internet service provider, using our “taxable” bonds product to also obtain a property tax “abatement” program on a phase-in basis.
- Our “affordable lower floater” program allowed a lumber company to finance a small ($1.8 million) expansion at the lowest possible interest rate using variable rate demand bonds. With our program, the company was able to use a letter of credit from its local bank to obtain a “wrap L/C” from a larger bank. Alternatively, our FHLB program allows community banks to provide a direct pay letter of credit that is just as acceptable in the “taxable floater” bond markets as a letter of credit from an investment grade bank.
- We put together a public/private partnership to develop and finance a new $5 million facility for a private university that was expanding in Georgia. The financing involved tax-exempt bonds for nonprofits qualified as 501(c)(3) organizations.
- We were recently project counsel for a $3 million single investor tax-exempt lease of a city police station.
- We took advantage of new public works construction law to help a public authority “fast track” a $9 million design/build infrastructure project using competitive proposals (instead of bidding).
- We used an innovative groundlease structure to provide land, site improvements, infrastructure and other incentives for a large foreign automotive supplier’s new $100 million plant.
- We financed a $3 million solid waste disposal facility for a machinery and equipment manufacturer, using variable rate demand bonds in a unique structure without a letter of credit, drawing on the investment grade credit of the company.
- We structured $6 million in tax-exempt financing of land, building and equipment for a strip steel manufacturer through a private placement with a non-bank lender, so that the manufacturer could retain bank financing capacity.
- Our “Cinderella” bonds product allowed a lighting manufacturer to convert $9 million in taxable industrial development revenue bonds, issued to finance a new plant at a time when tax rules could not be satisfied, to tax-exempt bonds, once compliance was possible.
- Members of the Finance Team recently closed a $4 million corporate finance transaction for a mini-warehouse developer.
- We have handled finance and incentives matters for a number of independent or merchant power plants, as well as for renewable energy plants and plants owned or operated by traditional electrical utility companies. These projects typically involve investment ranging from tens of millions, to hundreds of millions, of dollars.
- Our equity finance techniques obtained $8 million in financing for an entrepreneurial entrant into the wireless communications industry.
- We closed an acquisition in the food industry which we financed through raising $15 million in acquisition financing structured as equity, senior subordinated debt and asset-based loans.
- We also assisted a logistics company obtain growth capital through structuring and closing $10 million in asset-based financing.
- Examples of assets we have financed off-balance sheet include a bank branch, an appliance manufacturing plant, the machinery and equipment for a tire manufacturing plant, and a financial transactions processing facility. These financings involved synthetic leases or operating leases and/or tax-exempt bonds or “taxable” bonds.
- In a recent transaction, we handled a refunding financing that provided additional funding for a college’s dormitories and performing arts facility through tax-exempt “qualified 501(c)(3) bonds.”
The Finance Team has considerable experience representing development authorities and other local authorities. In many of the transactions mentioned above, the Finance Team served as either issuer’s counsel for the authority, as its bond counsel, or both.
Members of the Finance Team are well known for our leadership roles in the American College of Bond Counsel, the National Association of Bond Lawyers, and the Georgia Economic Developers Association. We actively participate in the Association County Commissioners of Georgia, Inc. and the Georgia Municipal Association. Finance Team lawyers are listed in the Red Book directory of nationally recognized bond counsel firms. They are active in such real estate industry associations as ULI, NAIOP and ICSC. The Finance Team lawyers are frequent speakers at seminars and workshops, including those presented by the American Bar Association, the International Economic Development Council, NAIOP, the Institute for Professionals in Taxation, the Public Securities Association, the Municipal Treasurer’s Association of the United States and Canada, Inc., the annual Bond Counsel Winter Workshop, plus over 25 bond panels at the annual Bond Attorneys Workshops sponsored by the National Association of Bond Lawyers, and panels for the Institute of Continuing Legal Education in Georgia, the University of Georgia’s Carl Vinson Institute of Government and its Fanning Institute, and various other colleges and universities. Articles written by our members have been published in a number of professional publications, including The Bond Lawyer, the Municipal Finance Journal, Taxes, Taxation for Lawyers, Taxation for Accountants and the Digest of Tax Articles.