A theater complex will soon call downtown Las Vegas home thanks to a deal using Nevada’s 2-year-old New Markets Tax Credits program.
The $19.8 million transaction was led by Fox Rothschild LLP partners Paul Wassgren and Mark Connot in Las Vegas and Daniel Madrid in Princeton, N.J., who completed the transaction on behalf of client Eclipse Theaters Development Group LLC.
The multifaceted transaction, which was undertaken through the federal and state New Markets Tax Credits programs, will allow the company to complete the planned upscale, concierge-style Eclipse Theater complex in downtown Las Vegas.
The state’s New Markets Tax Credit Program was created by the Nevada Legislature in 2013. It’s designed to support economic development and job growth through targeted investments in economically distressed communities.
“We are pleased to have assisted Eclipse in achieving its business goals through this transaction,” Wassgren said in a statement. “In more than 10 years of handling business transactions in Las Vegas, this is the most complex deal in which I’ve participated. It is gratifying to facilitate a development that will help revitalize and hopefully attract further investment to the downtown Las Vegas community.”
State officials declined comment, saying the paperwork had yet to reach the Business and Industry Department. The deadline for paperwork under the New Markets Program is July 30. BNI said only a few deals have used the New Markets credit.
Nevada’s program is based on the federal New Markets Tax Credit Program, which was passed by Congress in 2000.
It allows the state to allocate tax credits to community development entities, which serve as an intermediary for providing loans or investments for qualifying projects such as hospitals, office buildings, infrastructure improvement and manufacturing ventures.
The community development entities in this transaction, affiliates of Clearinghouse CDFI and Stonehenge Capital, contributed $12.3 million of subordinated construction financing toward the theater facility. A portion was sourced from New Markets Tax Credit equity from U.S. Bank and an additional $7.2 million of short-term bridge debt was financed through a private construction lender.
The 550-seat Eclipse Theater, which will be on South Third Street, is slated to open next spring and will feature eight auditoriums as well as VIP amenities such as in-movie dining, and a bar and lounge.
“Developing large scale projects is rarely an easy task. When dealing with complex transactions, it is so important to have good partners,” Nic Steele, managing director at Eclipse Theaters, said in a statement. “It took tireless dedication and ingenuity to set Eclipse Theaters on course to break ground this summer and open in spring 2016.
“We look forward to adding value to the community and building on the momentum here in downtown Las Vegas.”
The venue plans to host both for-profit and nonprofit events, including movie premieres, corporate events, concerts and comedy shows, while incorporating job-training for veterans and youth development opportunities.
“Without the New Markets Tax Credit program, projects like this one would not be possible,” Madrid said in a statement, “and the hope is that this theater acts as a catalyst to the redevelopment of this portion of downtown Las Vegas.”