top of page

Case Study: Humboldt Bay Harbor District

Updated: Jun 14, 2023

The Humboldt Bay Harbor, Recreation and Conservation District (the "District") engaged Weist Law to contribute to their team of consultants to work on the Humboldt Bay Offshore Wind and Heavy Lift Marine Terminal project (the "Project"). Utilizing a combination of New Market Tax Credit ("NMTC") funds, revenue bond funds, grant funds and other funds, the District was able to successfully acquire and construct 660,000 square feet of new indoor recirculating aquaculture project permitted with over $500 million projected investments, as well as other strategically located sites that are essential to the Project. These investments paved the way for the off-shore wind energy farm and the world's longest broadband fiber optic cable project with connections planned for Australia, Singapore, Taiwan, and Japan.

Humboldt Bay Reimagined

Humboldt Bay is the California North Coast’s only deep-water port and serves as the region’s

major maritime transportation link to the rest of the world. As the only harbor between San

Francisco and Coos Bay Oregon with channels of sufficient size to accommodate large

commercial vessels, the District is reimagining Humboldt Bay as a thriving

waterfront and economic incubator.


Off Shore Wind Energy

In 2015, during the first phase of the Project, Weist Law assisted the District in acquiring a former pulp mill site. Weist Law then served as bond counsel to secure the funds needed to to execute the acquisition of another strategically located site. With the initial NMTC funding, and the recent 2023 Revenue Bond funding, the District was able to secure and pay off well over $25 million in property improvements, while securing title to properties essential to the realization of the Humboldt Bay Offshore Wind and Heavy Lift Marine Terminal.


On December 7, 2022 the Biden-Harris Administration announced the winners of two leases in the Humboldt wind energy area, located 21 miles off the coast of Humboldt Bay. The District is currently negotiating with Crowley Wind Services to become the initial developer and operator of the Wind and Heavy Lift Marine Terminal Project to serve as California's first hub for offshore wind energy installations.


Since the start of the Project, there is now a wide stream of multi-billion dollar companies looking to invest in Humboldt Bay.


Transoceanic Fiber Optic Cable

The Project includes the landing hub for the world’s longest subsea fiber optic cable. Stretching from Eureka to Singapore, the 10,000-mile-long cable will bring enhanced broadband connectivity to Humboldt County and beyond as soon as 2023.


The NMTC Program

The NMTC Program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities ("CDEs"). All of the qualified investments must be used by the CDEs to provide investments in low-income communities. A total of 39% of the investment cost is the credit provided to the taxpaying investor, claimed over a seven-year credit allowance period. The NMTC program allows individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments. Funds can be used to finance equipment, operations, or real estate projects. Real-estate financing can purchase or rehabilitate retail, manufacturing, agriculture, community facilities (e.g., health services, museums, or charter schools), rental or for-sale housing, or combinations of these.


Using the capital from investors CDEs can make loans and investments to businesses (qualified active low-income businesses, can be for-profit or non-profit enterprises) operating in low-income communities on better rates and flexible terms/features than the market. Terms for NMTC loans can include lower interest rates, flexible provisions such as subordinate debt, lower origination fees, higher loan-to-values, lower debt coverage ratios, and longer maturities.


Businesses and the surrounding communities have significantly benefited from the NMTC Program. Businesses (and Non-Profits) benefit from access to flexible and affordable financing. The low-income communities benefit from the jobs associated with the investments in manufacturing, food, retail, housing, health, technology, energy, education, childcare, and more, as well as greater access to community facilities and commercial goods and services.

For every $1 invested by the federal government, the NMTC Program generates more than $8 of private investment. You can read more about the NMTC program on the Department of Treasury website or download the NMTC Program Fact Sheet below.

New_Markets_Tax_Credit_Program_FactSheet
.pdf
Download PDF • 371KB

If you would like to learn more about the strategies mentioned in this article or any other public financing matter, you can schedule a no-obligation zoom meeting directly on our scheduling calendar. We would love to learn more about how we can help you generate savings and create a healthy financial future for your agency.

 

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact a designated Weist Law representative. This material may be considered advertising under certain rules of professional conduct.


90 views0 comments
bottom of page