1. Family-owned business that's been around forever. Located in a faded small urban area in a larger region that has a lot of wealth.
2. Reasonably profitable, but not an ideal credit risk.
3. Closely-held ownership with limited options for internal succession.
4. The family owns both the business and the property.
5. They're looking for financing options to expand the business.
Apparently the new tax code gives this type of situation some interesting options. The family and outside investors set up an outside structure like a partnership or closed corporation that takes ownership of the property. The investors contribute cash. The family either sells the property to the new ownership structure or contributes the property in lieu of cash. The new entity then dumps a ton of money into the property to expand and improve it, and leases the improved property to the business.
I'm sure I missed some key details, but this is the gist of the conversations I've been hearing in my circles. There may be 1031 exchange implications here, too?
Interesting.
If so, just another windfall for the current property owners in the area. When you’re already a business and property owner setting up a shell corporation to get tax money from the feds, Joe Average is getting screwed once again.
There have been studies showing that the poor are helped better when such giveaways are given outside of such constrained geographic areas. Which makes sense. The government is not a great allocator of any economic resources. Certainly not good at deciding where businesses should be sited and invested in.