CHICAGO — Columbus, Ohio-based business law firm Benesch, Friedlander, Coplan & Aronoff LLP has launched a new public finance group that will provide traditional tax-exempt financing counsel as well as advice on how issuers and bankers can take advantage of the tax-exempt provisions that are part of the new federal stimulus program.
Of the six attorneys hired to launch the new division, five moved to Benesch from the Columbus office of Peck, Shaffer & Williams LLP.
Michael Melliere is chairman of the new group, which includes partners Stephen Grassbaugh and Jason George and associates Susan Bender Price and Allison Binkley. All five came to Benesch from Peck Shaffer. Catherine Swartz joins Benesch in its Cleveland office from Squire, Sanders & Dempsey LLP.
Part of the reason the five attorneys left the boutique firm Peck Shaffer was the chance to join a full-service law firm, Melliere said.
The new division allows Benesch, which has a long-established public law practice, to expand into the financing market. The firm expects to hire more attorneys to expand the new group over the next few years, Melliere said.
“With the market hiccup it might not be an ideal time [to launch a new public finance group] looking at it from the short term, but Benesch is looking at this in the long term,” he said. “They historically have one of the premiere public law practices in Ohio, and already interface with state and local government entities, so this is complementary to that practice.”
The new group will focus on several aspects of public financing, largely in Ohio with some work in surrounding states. Melliere’s practice largely consists of private K-12, higher education, and conduit nonprofit financings. He also serves as underwriters’ counsel for transactions across the country.
George focuses on the health care, long-term care, and manufacturing industrial development bond sectors, while Grassbaugh focuses on traditional government financings.
The new group also hopes to work as counsel for issuers, bankers, and nonprofit and for-profit companies looking to take advantage of the federal stimulus funds expected to start rolling in over the next few months.
“We’re all keeping busy digesting the recent stimulus legislation, and getting the word out to state and local governments, nonprofits, and for-profit organizations that can take advantage of it,” Melliere said.
On the government side, he said issuers are showing a lot of interest in the federal cash subsidies that are part of the Build America Bonds program.
On the banking side, the firm has already started to work with some commercial banks interested in the new ability to buy into larger tax-exempt deals under a provision that expands to $30 million from $10 million the “small issuer exception” for bank-deductable bonds.
The provision will allow some banks to participate in the municipal market at a time when they can’t provide letters of credit to issuers in the current tight credit market, Melliere said.
“They view the new provision as a nice outlet for another option, and it offers nonprofit borrowers a chance to preserve relationships even if they can’t get a letter of credit,” he said.
Another provision generating a lot of interest is the Recovery Zone Facility Bonds program, which allows private, for-profit borrowers to obtain tax-exempt financings for property in so-called recovery zones.
But nearly all participants, from issuers to bankers to nonprofit and for-profit organizations, are largely in a “wait-and-see mode until the government provides more details,” Melliere said. “Some bankers say it makes a lot of economic sense, but there’s still a high degree of uncertainty as to how it will work.”