We regularly represent clients in the development and syndication of low-income housing tax credit projects and almost all of them involve some novel tax, regulatory or real estate issue. Recently, however, we represented the developer in a tax credit project that went even further – it raised constitutional issues under the First Amendment to the United States Constitution.

Specifically, we represented a developer who proposed to redevelop a portion of an existing Roman Catholic convent in Baltimore into a tax credit development for the elderly while maintaining a portion of the property as a convent. The funding for the project included public funds. The agency providing the public funds raised the question of whether, under the separation of church and state doctrine in the First Amendment, it could make governmental funds available for the project. We researched the law and rendered an opinion on the separation of church and state issues that enabled the project to proceed and to use the public funds.

The project also presented challenging real estate issues. The existing convent had to be subjected to a condominium regime, one unit of which the religious sisters would retain as housing for their community, and the other unit of which would be converted into the affordable elderly housing. We worked with our client and the Sisters to resolve issues of cost allocation, voting and control, coordination of development schedules, easements and numerous other matters.