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How the district's roughly $650M build-out gets financed: the instruments, what each costs, and the work that unlocks them. Who invests, and how, is on the District Capitalization page.
Edgewater finances as a phased capital stack. Each vertical phase carries its own stack; public mechanisms carry the shared infrastructure. Public value capture, government credit enhancement, tax-advantaged structures, and mission-priced capital layer together to compress the blended weighted average cost of capital well below conventional development finance. The rate on any single instrument matters far less than what the whole stack costs together, and the delta flows directly to project feasibility, affordability depth, and sponsor economics.
Tax increment financing funds shared infrastructure from the value the project itself creates, moving an estimated $30-80M of scope onto the public stack.
HUD-insured and agency debt prices 150-300 bps inside bank construction financing, at higher leverage and longer fixed terms.
LIHTC equity, tax-exempt bonds, C-PACE, and Opportunity Zone equity each lower the effective cost of a tranche of the stack.
CDFI debt and foundation program-related investments price at 1-4% because the regenerative mandate is the return. Now City's positioning is a genuine pricing advantage here.
The district builds in phases of roughly $60-120M, and each phase carries its own stack. District infrastructure is financed separately through public mechanisms. The composition below is indicative for the full build-out; ranges are deliberately wide at this stage, and the grounding work in the action plan narrows them.
| Layer | Source | Est. Range | Indicative Cost |
|---|---|---|---|
| District infrastructure | TIF / URA, state infrastructure programs | $30-80M | Carried on the public stack |
| Senior construction / perm debt | HUD 221(d)(4), agency, insurance company | $380-450M | 5.0-6.5%, 40-yr fixed (HUD) |
| C-PACE | Private C-PACE providers (ORS 223.680) | $40-90M | 6-7.5%, up to 30-yr fixed |
| Tax-exempt bonds + 4% LIHTC | OHCS conduit + tax credit equity | $50-120M | Below-market blended (affordable phases) |
| OZ 2.0 equity | Qualified Opportunity Funds | $60-120M | Market return target, lower hurdle via tax benefit |
| Sponsor / GP equity | Sponsor, co-GP partner, landowner land contribution | $25-45M | Promote structure |
| Grants, PRIs, CDFI gap | URA grants, foundations, Craft3 | $5-15M | 0-4% |
The stack organizes into three pools by check size and stage. The small pool funds the next 18 months and de-risks everything above it; the medium pool capitalizes phases; the large pool operates at district scale.
The catalyst site sits inside the 453-acre West Salem URA, funded through tax increment financing under ORS 457, with a Capital Improvement matching grant program for new construction and mixed-use projects ($50K+ on larger projects). The near-term dollars are modest; the strategic value is the working relationship with the Urban Renewal Agency ahead of the district-scale TIF negotiation. Plan status, remaining capacity, and the amendment pathway are a first-30-days diligence item.
Multi-Unit Housing Tax Incentive Program, Enterprise Zone, Low-Income Housing Property Tax Exemption, and the Single Property TIF District mechanism. Salem has already executed a single-property TIF granting up to a 97% property tax rebate for an affordable project (Jory Apartments): the political and administrative precedent exists.
Craft3 is the anchor Pacific Northwest CDFI for this profile. Predevelopment, acquisition, and gap loans typically price 400+ bps inside comparable private credit.
Meyer Memorial Trust and Oregon Community Foundation both deploy PRIs at 1-3% for housing and community development. A regenerative, mixed-income district in a state-capital submarket is squarely in mandate. PRIs are patient, subordinate, and signal-generating for the institutional capital that follows.
The Special Public Works Fund and related programs lend to municipalities at below-market rates for development-supporting infrastructure. These deploy through the City, which makes the City partnership the gating item.
The workhorse for market-rate and mixed-income phases: roughly 85% loan-to-cost, 40-year fully amortizing fixed rate, non-recourse, combined construction-to-permanent, priced meaningfully inside bank construction debt with zero refinance risk at stabilization. The cost is time (12-18 months from engagement to closing), which is why the HUD lender relationship starts now, well ahead of entitlement.
For phases carrying significant affordable components, tax-exempt private activity bonds issued through Oregon Housing and Community Services paired with 4% credits produce the cheapest capital available in US real estate, stacking with Salem's local tax exemptions to improve operating economics simultaneously. The Point Access Block / Passive House product suits LIHTC cost limits well given its standardized shell design.
Oregon authorizes C-PACE statewide under ORS 223.680 and 223.685, subject to county opt-in: up to 30-year fully amortized fixed rate, payment-free during construction, non-recourse, sized up to 35% of property value, available for new construction. Passive House by default maximizes eligible basis; the deeper the energy scope, the larger the tranche. Marion County opt-in status is the open item, and initiating that conversation is a high-leverage, low-cost coalition action with SEDCOR and the City.
For commercial, community-facility, and mixed-use non-residential components, where the census tract qualifies. Tract eligibility is being verified alongside the OZ analysis.
Fannie Mae and Freddie Mac takeouts on stabilized phases where HUD execution is less optimal, including green financing pricing incentives for certified high-performance buildings.
The OBBBA made the OZ program permanent, with new designations every ten years. Oregon's Governor nominates tracts in the current window (July 1 to September 29, 2026), with new zones effective January 1, 2027; Oregon has 229 eligible tracts, of which up to 58 will be designated. Now City has verified the Edgewater tract's OZ 2.0 eligibility and is working the nomination window. Designation applies OZ equity economics to the entire build-out: a rolling 5-year deferral, a 10% basis step-up, and full exclusion of appreciation at a 10-year hold, which materially lowers the return hurdle OZ equity requires. The January 1, 2027 effective date aligns directly with predevelopment and Phase 1 capitalization.
The full 22-acre assembly at $650M of new assessed value generates increment that dwarfs the existing West Salem plan's original sizing. The negotiation target is a plan amendment or successor TIF district in which increment funds streets, utilities, stormwater and green infrastructure, and public realm: an estimated $30-80M of scope carried on the public stack. Salem's Urban Renewal Agency board is the Mayor and City Council; this is a political relationship with a 12-24 month arc, and it starts with the small URA grant engagement above.
EPA WIFIA lends at Treasury rates for water and stormwater infrastructure at project scales above roughly $20M, relevant where the regenerative water strategy (district stormwater, water reuse) is capitalized as a discrete system. DOT discretionary programs apply where the district carries qualifying multimodal transportation scope.
Insurance company and pension debt on stabilized phases prices at tight spreads for durable, certified assets. At scale, a portfolio of Passive House buildings supports green bond or sustainability-linked issuance. Danish pension investors hold explicit sustainable real-asset mandates; US deployment typically routes through fund intermediaries, so the realistic near-term play is relationship cultivation and LP introductions on a 2027+ horizon.
The debt and public instruments above define the cost floor; the equity strategy defines who carries which risk at which stage, and at what price. Equity arrives as four distinct products with different risk appetites, return requirements, and entry points. Sequencing them correctly protects sponsor economics while keeping every phase capitalized. Stage 0 capital is the $15M Phase One Campaign on the District Capitalization page: the platform and the fund are the vehicles it arrives through.
Every instrument above has an owner, a sequence, and a clock. Items flagged as time-critical carry hard external deadlines. This plan is shared in full because sequencing transparency is exactly what a data room is for; the verification register below tracks each open item to closure.
This register stays live. Investors reviewing the room should expect to see items move from open to closed over the diligence period; each item gates a specific piece of the stack.
| # | Item | Status | Gates |
|---|---|---|---|
| 1 | Opportunity Zone 2.0 tract status | Verified | OZ equity strategy (Large Pool) |
| 2 | Marion County C-PACE opt-in | Open | $40-90M C-PACE tranche |
| 3 | West Salem URA remaining capacity & expiration | Open | TIF strategy |
| 4 | NMTC tract eligibility | Open | Commercial component stack |
| 5 | WIFIA threshold fit for water systems | Unscoped | Federal infrastructure credit |
| 6 | Blended-cost model reflecting this stack | In build | Investor materials |
Prepared as working strategy for the data room. Figures are indicative ranges pending the register above.
All projections are based on assumptions regarding revenues and costs that may not equate to actual results; actual results will differ and may differ materially. Prospective investors, with their financial and legal advisers, should independently evaluate all assumptions and should not place undue weight on any projections. This page does not constitute an offer to buy or sell securities; an offering can be made only pursuant to delivery of a private placement memorandum and related documentation. Any securities would be offered in reliance on exemptions from registration and only to persons meeting applicable requirements. Statements herein may constitute forward-looking statements involving known and unknown risks and uncertainties; no representation is made that objectives will be achieved, and Now City undertakes no obligation to update such statements. This material is confidential, furnished solely for consideration of the matters described, and is not to be copied or shared without written consent.