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Historic Tax Credits (Notes)
9 Months Ended
Sep. 30, 2016
Historic Tax Credits [Abstract]  
Historic Tax Credits [Text Block]
HISTORIC TAX CREDITS
In the second quarter of 2012, we closed a transaction with a counterparty (the “Counterparty”) related to the historic rehabilitation of an office building located at 801 Market Street in Philadelphia, Pennsylvania (the “Project”), which has two stages of development. The Counterparty contributed equity of $5.5 million to the first stage through December 31, 2013 and $5.8 million to the second stage through September 30, 2014. In exchange for its contributions into the Project, the Counterparty received substantially all of the historic rehabilitation tax credits associated with the Project as a distribution. The Counterparty’s contributions, other than the amounts allocated to a put option (whereby we might be obligated or entitled to repurchase the Counterparty’s ownership interest in the Project), are classified as “Accrued expenses and other liabilities” and recognized as “Other income” in the consolidated financial statements as our obligation to deliver tax credits is relieved.
The tax credits are subject to a five year credit recapture period, as defined in the Internal Revenue Code of 1986, as amended, beginning one year after the completion of the Project, of which the first stage was completed in the second quarter of 2012, and the second stage was completed in the second quarter of 2013. Our obligation to the Counterparty with respect to the tax credits is ratably relieved annually in the third quarter of each year, upon the expiration of each portion of the recapture period and the satisfaction of other revenue recognition criteria. We recognized the contribution received of $0.9 million from the Counterparty as “Other income” in the consolidated statements of operations related to the fourth recapture period of the first stage and $1.0 million related to the third recapture period of the first stage in each of the three and nine months, respectively, ended September 30, 2016 and 2015. We recognized the contribution received of $0.9 million related to the third recapture period of the second stage, and $0.9 million related to the second recapture period of the second stage in each of the three and nine months, respectively, ended September 30, 2016 and 2015. We also recorded $0.2 million and $0.3 million, respectively, of priority returns earned by the Counterparty in each of the three and nine months ended September 30, 2016 and 2015.
In the aggregate, we recorded net income of $1.8 million to “Other income” in the consolidated statements of operations in connection with the Project in each of the three and nine months ended September 30, 2016 and 2015, respectively.