Matt Wachter, who has a tax attorney’s love for the intricacies of federal opportunity zones and historic tax credits, has used those skills for nearly four years to advance a $100 million transformation of the downtown Erie.
But now Wachter, the vice president of finance and development for Erie Downtown Development Corp, will be leaving the organization. He leaves on Friday to lead the investments and finances of Carnegie Foundry, described as a Pittsburgh-based robotics and artificial intelligence lab backed by Carnegie Mellon University and a number of Fortune 500 companies.
Wachter, who last week thanked EDDC’s board of directors for the opportunity and for his investments in the community, said the timing of his departure seemed good for him and for EDDC.
A former partner in the Erie law firm of MacDonald Illig, where he served as a member of the firm’s Commercial Transactions and Trusts and Estates practice groups, Wachter was the person primarily responsible for building what is sometimes referred to as the stack of capital to achieve EDDC’s vision. for downtown Erie.
Along with CEO John Persinger, who is also a lawyer, it was his job to pull together a mix of investments, loans and tax credits to bring a plan to rebuild downtown Erie to life by buying and by transforming downtown properties.
Historically, selling investors on Erie has been a challenge, Persinger said.
Even now, at a time of acceleration in Erie, EDDC’s $26.5 million investment that built the Flagship City Public Market, Flagship City Food Hall and 28 apartments is valued at just 7.7 millions of dollars.
This situation required something more than an understanding of tax law and finance.
“There has to be some creativity in how you structure (funding) so that everyone can benefit from it,” Persinger said. This includes “the professionals who work on the projects, the people who invest in these projects and all those who borrow. It is not only necessary to work from a financial point of view, but also from a point of view of impact on the community”.
Federal Opportunity Zones, which offer special tax benefits to investors who use capital gains to invest in designated low-income zones, would prove to be EDDC’s most important tool for funding its projects.
Not only was EDDC invited to Washington, D.C. in 2020 as the White House touted the organization for its leadership in Opportunity Zones, but Erie took top honors in a national competition highlighting leaders of the Opportunity Zone, sponsored by Forbes and Sorenson Impact. He has also secured over $35 million in Opportunity Zone investments from Erie Insurance and Boston-based Arctaris Impact Investors.
Visiting the White House in August 2020The Erie Group sheds light on OZ funding at the White House
Success can be measured in other ways, including the completion of 42 new apartments, all of which have been let.
Persinger attributes much of the credit for EDDC’s success to the support, expertise and encouragement of EDDC’s Board of Directors and the Board of Erie Downtown Equity Funding, which provided an initial investment of $27 .5 million dollars.
“Matt was instrumental in helping attract early-stage investors and he put in place financial models that made people want to invest in these projects.” Persinger said: “The food hall and market are great examples of how we’re able to take a building that was collapsing, and one that we knew would cost more than it cost, and to attract a national opportunity zone investor, a historical tax credit investor, local investors and local debt, and not only make it work financially, but also make it work from a community perspective.
They innovated in other ways. Instead of charging rent to food hall tenants, some of whom were new startups, EDDC paid all upfront costs and collects a portion of gross sales each month.
Like Persinger, Wachter credited investors and the board with believing in the effort.
What’s next for Wachter’s position at EDDC?
So what happens now – is EDDC starting to look for the financial point that can replace Wachter?
It’s not clear, Persinger said. The organization’s needs may change as it nears completion of its first set of projects worth approximately $100 million, which will include the completion of a new parking lot and a new mixed-use building at the northwest corner of Fifth and State Streets.
“There are fewer capital raising requirements for this role and more financial reporting and compliance,” Persinger said. “Responsibilities evolve naturally within the organization.”
The future needs of the organization — and whether or not a replacement for Wachter will be hired — appear to hinge on whether or not EDDC plans future investments once currently planned or ongoing work is completed.
It’s too early to say for sure what will happen next, Persinger said.
“We still have a lot of work to do,” he said.
Wachter, who went to work at EDDC when it had just three employees — including himself, Persinger and Nicole Reitzell, vice president of community engagement and social impact — is leaving an organization that matters. about 20 employees.
Wachter, who will continue to live in Erie, said he looks forward to EDDC’s sequel.
“I couldn’t be prouder of what has been accomplished for Erie,” he said.