Boys & Girls Clubs would pay below-market, interest only payments for seven years, then as much as $1.7 million of the loan through the New Market Tax Credit Program is eligible to be forgiven
Sarasota Herald-Tribune
NORTH PORT – Construction on the new Boys & Girls Club in North Port may commence as soon as late fall, after local attorneys helped the Boys & Girls Clubs of Sarasota and DeSoto Counties obtain a unique type of loan to bridge the gap between money raised by local donors and the anticipated $9 million cost.
That last piece of the puzzle, a below-market-rate loan through the federal New Market Tax Credits Program – $1.7 million of which is forgivable – was announced late last month.
The next key date for the project is July 11 when Boys & Girls Club officials will learn more about the allocation process for the $4 million Resilient SRQ grant it received from Sarasota County in May.
Bill Sadlo, president & CEO of the Boys & Girls Clubs of Sarasota and DeSoto Counties, said the project includes renovating the gym, which was the only structure usable after Hurricane Ian hit in September 2022.
Why does North Port need a new Boys & Girls Club?
The Boys & Girls Clubs of Sarasota and DeSoto Counties had already contemplated an update of the club in North Port, which opened in 1997 at the Scout House at Dallas White Park and later moved to the former South Biscayne Baptist Church campus at at 6851 South Biscayne Dr. The pandemic halted fundraising and then Hurricane Ian knocked out two of the three buildings.
About 250 children made use of the Gene Matthews Boys & Girls Club. Many of those families are still attending the club, which has been operating out of the gym and two portable buildings.
‘It’s challenging this summer with 240 children in North Port that we’ve registered and having the building limitations that we have,” Sadlo said.
How did the North Port Boys & Girls Club funding come together?
A new 14.000-square-foot club was announced in May 2023, before the passing of Gene Matthews that August.
The new facility will be known as the Steven and Marjolaine Townsend Campus for the Gene Matthews Boys & Girls Club in North Port, recognizing both Matthews and board member Steven Townsend, who jump-started the initial fundraising with a $1 million donation.
After that, Jamie and Julie Di Domenico of CoolToday followed up with a half-a-million dollar contribution, the Gulf Coast Community Foundation pledged $1 million and the Atlanta Braves made a significant but unspecified donation that led to a ceremonial groundbreaking in March, during spring training.
Combined with other donations, the $4 million Resilient SRQ award from the $201.5 million federal community development block grant awarded for Hurricane Ian recovery and the New Market Tax Credits loan that means that the construction process can proceed.
What is the New Market Tax Credit Program?
The program was started in 2000 by the U.S. Department of Treasury in concert with the IRS.
“What it does is it provides tax credits to investors, lenders who will agree to make loans to underserved communities to organizations that qualify, such as the Boys & Girls Club,” said attorney Mike Pitchford, a partner in Shumaker, Loop and Kendrick in Sarasota, who issued an opinion letter on the loan’s viability. “The loans that they make are way below market because the investors get tax credits.
“It’s a benefit for the investors, it's a benefit for the community and the Boys & Girls Club,” he added.
The federal tax credit program is similar to the one used to subsidize affordable and workforce housing.
The Florida Community Loan Fund and Truist Financial are providing the funds for the loan.
Pitchford reviewed the voluminous complex loan documents, collaborated with several consultants and three law firms representing each of the seven involved parties, based in Chicago, St. Louis, and Boston.
The club will make interest-only payments on the loan for seven years, after which up to $1.7 million of the balance may become forgivable.
Pitchford became involved through fellow partner Meghan O. Serrano, a Boys & Girls Club board member who was also involved in the loan process.
“The damage from Hurricane Ian was extensive, but we knew the Boys & Girls Club is exactly where it needs to be to serve the community, so we had to rebuild,” Serrano said in a prepared statement. ““We were initially uncertain about how to achieve this.
“However, after thoroughly researching the New Markets Tax Credit, we recognized it as a unique and complex opportunity that we had to pursue.”
What’s next in the construction process?
Sadlo said after the July 11 meeting with Sarasota County on the Resilient SRQ funding, the club can put the project out for bid and pick a general contractor, which is also part of the process to access the $4 million block grant.
The goal is to begin construction in early Fall.
Donations are still needed and naming opportunities remain North Port, Sadlo noted.
To learn more or contribute, visit https://bgcsdc.org/.
Also this fall, the nonprofit should be able to start on the new teen center for the Louis and Gloria Flanzer Club on the Arcadia Smith Brown Campus in DeSoto County, which opened in October 2023.
There, the original club structure will be transformed into the Malcolm Family Teen Center, named for Kirk and Rae Malcolm.
That is in permitting and renovations should start in the fall, Sadlo said.
The next major project on the horizon for the Boys & Girls Clubs will be an update and possible replacement of the Roy McBean club campus in Newtown, and the New Market Tax Credits will be explored for that.
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