Healthy Food Provider, Health Center, Hospital, Multiuse Properties Named QLICIs of the Year
Published by Brad Stanhope on Monday, July 10, 2023
A health center in California, a rural hospital in Tennessee, a healthy food provider in Detroit and multiuse properties in Washington, D.C., and Detroit are among the winners of the Novogradac Journal of Tax Credits QLICI of the Year Awards for 2023.
The awards go to the community development entities (CDEs) that allocate new markets tax credits (NMTCs) to the properties and were presented at the Novogradac 2023 Spring New Markets Tax Credit Conference in Washington, D.C., in June.
“These awards reveal the wide variety of uses for new markets tax credit equity to help growth in low-income communities,” said Greg Clements, chair of the conference. “They also show what a tremendous impact this type of investment makes in the lives of the residents of those communities.”
The winners of the awards include:
Metro: Klein Center for Jobs and Justice
Three CDEs–CAHEC New Markets, Reinvestment Fund and Chase New Markets Corporation–combined to allocate $18.5 million in new markets tax credits (NMTCs) to help fund the development of DC Central Kitchen’s Klein Center for Jobs and Justice in Washington, D.C.
The new 36,000-square-foot facility will be the home for DC Central Kitchen, which was founded in 1989 as an alternative to the traditional soup kitchen. The property is located on the site of the former U.S. Coast Guard headquarters on the Anacostia River, which historically divided Washington, D.C.’s, wealthier neighborhoods from its underserved neighborhoods. The property includes a culinary training kitchen and production kitchen capable of producing 25,000 meals per day. The development also has cold storage and a flexible production space to host 20,000 annual volunteers and a food accelerator program, as well as rentable event spaces.
The goal is to establish the nation’s most ambitious community kitchen and urban food hub, which can also serve as the lead anchor tenant of a major mixed-use waterfront development and will have a healthy café as its entry point.
CAHEC New Markets and Reinvestment Fund each allocated $8 million in NMTCs, while Chase New Markets Corporation allocated $2.5 million for a facility that will be open every day for 15 hours.
Nonmetro: Lauderdale Community Hospital
An aging hospital in rural Ripley, Tennessee, will receive significant upgrades for patients and staff due to NMTCs allocated by three CDEs.
DV Community Investment ($9 million in NMTCs), Hope Enterprise Corporation ($8 million) and CCG Community Partners ($5 million) helped support the construction of a new, 35,000-square-foot state-of-the-art Lauderdale Community Hospital.
The $22 million upgrade to the hospital will bring improved and expanded services. Those include upgraded emergency cardiac and pulmonary rehabilitation, surgery services, radiology, laboratory, physical rehabilitation, acute care and respiratory care.
The region is a medically underserved, severely distressed census tract. An improved layout will also benefit patients and staff. Lauderdale Community Hospital is the only hospital in Lauderdale County and most adjacent counties lack hospitals. The rebuilt Lauderdale Community Hospital will retain 95 jobs and create 25 new jobs, half of which will be accessible to resident of the low-income community. The hospital is expected to serve 50,000 people per year, with 31,500 visits from low-income residents. Without the hospital, many patients would have to travel to the nearest metropolitan area, which is a multihour drive for residents, some of whom have limited access to transportation and struggle to reach medical care and other services outside their immediate communities.
Real Estate: The Freelon at Sugar Hill
The Freelon at Sugar Hill, a mixed-use development in Midtown Detroit’s Sugar Hill Arts District, is the Novogradac Journal of Tax Credits Community Development Real Estate QLICI of the Year.
The financing for The Freelon at Sugar Hill, which will provide high-quality, modern housing options including units set aside for veterans, included NMTCs allocated by Building America CDE ($14.5 million), Michigan Community Capital ($6 million), Cinnaire New Markets ($5 million) and PNC Community Partners ($4 million).
The Freelon at Sugar Hill provides commercial space for properties that are either woman- or immigrant-led and is part of a larger master plan. The residential portion of the property will be 68 apartments, 20 of which are affordable and 14 of which are for veterans served by the U.S. Department of Housing and Urban Development’s HUD-VASH program. All residents will have access to a community room, lounge, outdoor green space, a workout room and a parking garage.
The Freelon at Sugar Hill is part of a larger revitalization effort to create a vibrant, walkable neighborhood in the Sugar Hill District of Detroit, once a booming entertainment and nightclub district with many Black-owned businesses. The neighborhood remains home to the Museum of Contemporary Art Detroit, the N’Namdi Center for Contemporary Art and a rich cultural and arts scene.
Small Business: The Detroit Food Commons
A trio of CDEs–New Markets Support Company ($7.2 million), Michigan Community Capital ($7 million) and U.S. Bancorp Impact Finance ($5.5 million)–combined to allocate nearly $20 million in NMTCs to help fund The Detroit Food Commons, a 31,000-square-foot, two-story building in Detroit’s North End neighborhood.
The Detroit Food Commons will house the Detroit People’s Food Co-op–a community-owned, full-service grocery store including a deli and a café–on the first floor. On the second floor, there will be four teaching and shared-use commercial kitchens, a banquet hall/community meeting space and office spaces for the Detroit Black Community Food Security Network.
The Detroit Food Commons is in a severely distressed census tract and will directly address a severe lack of access to fresh food in the neighborhood: There are 32,000 low-income residents and 20,000 residents with poor access to high-quality food within a 1.5-mile area. The Detroit Black Community Food Security Network is a nonprofit that was founded to make sure that Detroit’s African American population is leading and participating in the food movement.
The Detroit Food Commons aligns with the state’s strategic plan and objectives outlined in Detroit’s targeted multifamily housing district by providing continuing density along the city’s main artery and continued investment in the North End neighborhood. Before being built, the co-op signed up 1,300 member-owners, highlighting the demand for high-quality grocers. There currently are more than 1,850 members. A market study forecast $5.18 million in sales in the first year of operation. It is anticipated that there will be 41 full-time employees at time of stabilization.
Operating Business: Santa Cruz Community Health Centers–Live Oak Health Clinic
An additional 3,000 patients and 20,000 visits annually will be possible at a new health clinic in Santa Cruz, California, thanks to funding that includes $14.4 million in new markets tax credit (NMTC) allocation.
Primary Care Development Corporation ($10 million in NMTCs) and HEDC New Markets ($4.4 million) helped fund the Santa Cruz Community Health Centers (SCCHC)–Live Oak Health Clinic. SCCHC is a federally qualified health center and a Health Resources & Services Administration-designed Healthcare for the Homeless provider. It previously served more than 11,000 patients annually, nearly 60% of whom are at or under 100% of the federal poverty guideline.
Another clinic–East Cliff–reached capacity by 2020, prompting the desire for a new health center to replace it. The facility provides medical, behavioral health and specialty care, with a focus on pediatrics and those experiencing homelessness. The clinic is part of a larger development that includes Dientes, a dental clinic with a 30-year history of providing dental services to patients who have public health insurance or who are uninsured, and a 57-unit affordable housing property being developed by MidPen Housing.
While the site was no longer in an NMTC-eligible census tract after the 2020 census, it qualified through the targeted populations test. The clinic opened in December 2022.
Metro: HFFC Support Corporation, San Antonio, Texas (CDEs: Accion Opportunity Fund Community Development, Capital Impact Partners, DV Community Investment).
Nonmetro: United Health Services Mountain Youth Academy, Mountain City, Tennessee (CDEs: MuniStrategies, PNC, Pathway Lending).
Real Estate: Goodwill Opportunity Campus, Louisville, Kentucky (CDEs: Old National CDE Corporation, CAHEC New Markets, Urban Action Community Development, New Markets Support Company, Brownfield Revitalization, Lower Brule Community Development Enterprise).
Small Business: Indy Fresh Market, Indianapolis (CDE: Old National CDE Corporation).
Operating Business: Advanced Cutting Solutions, New Orleans (CDE: AMCREF Community Capital).