The Story
Old Town Companies and project goals.
The developer
Old Town Companies is a commercial real estate developer based in Carmel, IN, focused on mixed-use development through public-private partnerships — expanding from single family residential homes to transformative mixed-use projects in communities looking to grow.
The opportunity
Carmel has always looked to incentivize transformative projects along its city center core. North End's proximity to the Monon Trail and the lack of commercial development in the area provided an opportunity to add housing, office and retail — but mission-driven housing is rarely profitable without government assistance. North End received municipal support through TIF revenues; Old Town needed a capital partner to monetize it.
Unlocking Capital from TIF
The path through Freddie Mac financing.
Old Town was financing the project through a Freddie Mac program — which meant several requirements traditional lenders don't impose.
Municipal incentives required
The project needed municipal incentives to qualify for the Freddie program — which came in the form of TIF.
Affordability commitments
At least 10% of units needed to be under 80% Area Median Income — accomplished by setting aside affordable units for individuals with IDDs.
Rigorous underwriting
Freddie's underwriting standards are high, requiring multiple iterations of project financials and construction budget reviews.
TIF monetized at closing
For the lender to be comfortable closing the loan, Old Town needed to monetize the TIF upfront with proceeds at loan closing — a partner with certainty of execution who understands complicated real estate closings.
Expert Partners
The advantage of an experienced counterparty
Hageman Capital was built to make TIF monetization a routine part of a real estate closing. The firm's perspective comes from both sides of the table: as a capital provider to developers, and as a developer itself. Old Town has since become one of Hageman Capital's closest partners, and certainty of execution has facilitated transactions that would not otherwise have closed.
- Outright purchase of TIF and incentive bonds at competitive valuations
- Flexible structuring across the capital stack, from senior to gap funding
- Decisive diligence — most valuations returned within days, funded in weeks
- Discretion and continuity from first call through closing
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TIF monetized at construction loan closing.
North End moved forward because its TIF was monetized upfront, with certainty, at construction loan closing. Hageman Capital evaluates projects with an existing TIF incentive and projects where one has yet to be created.