Google and Union Bank Join Forces in LIHTC Arena
Google has entered an arrangement with Union Bank, N.A. to finance assisted housing in California. Union Bank’s Community Development Finance (CDF) division is syndicating and managing approximately $25 million in low-income housing tax credit (LIHTC) investments.
The arrangement marks a rare entrance into the LIHTC market by a company outside of the financial services industry. Since the founding of the LIHTC program in 1986, the vast majority of capital to purchase the credits has come from banks and other financial institutions, although a few large corporations have served as investors.
Two affordable senior housing developments—one of which is within eight miles of Google’s global headquarters in Mountain View—will receive financing. Google’s LIHTC investments will provide it with tax benefits, while advancing the company’s mission of corporate responsibility.
In its role as syndicator, Union Bank has originated and will manage two LIHTC investments in California in this first fund for Google: Fair Oaks Plaza and Regency Tower Apartments.
Google is investing $19 million in LIHTC equity in Fair Oaks Plaza, a development serving 123 low-income seniors. Union Bank also contributed $21.8 million in debt financing for Fair Oaks, which is being developed by Mid-Peninsula Housing. In addition to community amenities, Fair Oaks will offer on-site services for residents as part of a partnership with a new medical facility that is being built on the property.
A $6 million LIHTC investment in the Regency Towers Senior Housing will round out Google’s portfolio. Using financing provided by Google, Thomas Safran & Associates purchased and is rehabilitating this 104-unit property in Inglewood.