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Nine CDEs to Receive Novogradac Community Development QLICI of the Year Awards

Published by Caroline Gallegos on Wednesday, October 7, 2020

Journal Cover October 2020   Download PDF

From expanding a culinary arts program in Flint, Mich., to expanding a biotech company in Athens, Ga., the winners of the 2020 Novogradac Community Development QLICI of the Year Awards represent the diversity of the new markets tax credit (NMTC).

The awards recognize community development entities (CDEs) that have exhibited a well-executed vision and measurable community impact in the use of the NMTC, as well as CDEs that have shown a commitment to establishing change in bringing more people and places into the economic mainstream. Awards are given in five categories of qualified low-income community investments (QLICIs): small business, operating business, real estate, metro and non-metro.

The 2020 awardees have funding transactions that closed between June 2019 and June 2020.

The following are the winners in the five categories:

Operating Business: RWDC Industries

RWDC Industries is an early-stage biotech company located in Athens that harnesses nature to produce the materials in commonly used products. More specifically, RWDC Industries creates Solon brand bioplastics, which can replace traditional petrochemical plastics in packaging materials, particularly food packaging. RWDC uses locally sourced recycled waste cooking oils as a raw material for manufacturing their bioplastics.

The development’s CDE AMCREF Community Capital provided $7.7 million in NMTC allocation which allowed RWDC to close its financing gap and accelerate product development. The NMTC financing also helped RWDC secure long-term contracts and create jobs in the local community.

“RWDC is just the type of business AMCREF looks to support with NMTCs,” said Susan Seagren, managing director at AMCREF Community Capital. “RWDC is a high-growth company in an innovative new industry providing skilled, well-paying jobs via partnerships with local technical colleges and workforce groups. They’re also renovating a vacant facility in an economic development priority area. Finally, their biodegradable plastics address a pressing worldwide environmental problem.”

Small Business: PhoneSoap

PhoneSoap LLC was formed by Dan Barnes and Wesley LaPorte after learning that a cell phone surface was dirtier than a public toilet. After designing a prototype, PhoneSoap created a Kickstarter campaign in 2013 to launch its new product. PhoneSoap is located in Provo, Utah, in a census tract with a 49.5 percent poverty rate.

The working capital from Stonehenge Community Development, the sole CDE for the transaction, has helped to fulfill a growing backlog of customer orders and is expected to create nearly 30 new jobs. PhoneSoap has experienced exponential growth in orders since the onset of the COVID-19 pandemic. PhoneSoap is working to expand its product line to include a device to help hospital workers sanitize rooms and devices as well as a new air purifier for residential use.

“Their story along with other innovative companies is a powerful reminder that small businesses can make important contributions to our country’s recovery from COVID-19 related economic disruption and public health challenges,” said Matthew Orr, vice president at Stonehenge Community Development.

“PhoneSoap’s success is another great example of the importance of making flexible NMTC capital available to small businesses and reaffirms that low-income communities are worth developing” said L’Quentus Thomas, managing director at Stonehenge Community Development.

Real Estate: 683 Northland

The 683 Northland development in Buffalo, N.Y., involved the stabilization, remediation and redevelopment of the Niagara Machine and Tool Works complex—one of the largest manufacturers of machines and tools for working sheet metal. The rehabilitation of the industrial facility provides space for developing and maintaining a skilled workforce to meet the needs of the advanced manufacturing and energy sectors, and helps innovation-driven businesses excel.

The CDEs for the development—Building America and National Trust Community Investment Corporation—provided crucial funding that filled a significant financing gap without the need for more permanent debt. The NMTC financing allowed for a vacant, dilapidated warehouse to be adaptively reused into a vocational training facility for quality jobs in the advanced manufacturing and energy sectors.

“The Northland Workforce Training Center project has exceeded all our expectations,” said David Stebbins, executive vice president of Buffalo Urban Development Corporation, the developer of 683 Northland. “It has been transformational for the community; it is an award-winning historic preservation project; it has been hugely successful as a new workforce training program; and the community benefit goals for the construction portion also exceeded our goals for minority business and workforce participation. The Buffalo Urban Development Corporation–our chair, mayor Byron W. Brown and our entire board of directors–and our primary sponsor, Empire State Development, are extremely proud of what we have achieved. We are very thankful to Build America CDE, National Trust CIC and Citibank for their new markets tax credit investment in this project that helped make it happen and for the recognition this award from Novogradac brings to this project.”

Non-Metro: Tippah County Hospital

Tippah County Hospital is a critical access provider in Ripley, Miss., that is building a new adjacent facility. The current facility is more than 60 years old and is in need of replacement. The new facility will help improve local medical talent and patient outcomes, and it will provide emergency healthcare to the residents of Tippah County and nearby Benton County—which does not have a hospital.

The development’s four CDEs—MuniStrategies, HOPE Enterprise Corporation, Capital One and Three Rivers Community Development Corporation—provided more than $25 million in NMTC allocation to help fund the new facility. Tippah County Hospital was also allocated $10 million in Mississippi NMTCs.

“This was a tremendous hometown effort,” said Alan Lange, managing director at MuniStrategies. “All three CDEs, all of the CDE counsel and the state tax credit investor were all Mississippi-based and came together to make this project happen. Mississippi has worked hard to grow this ecosystem for successful community based investing and this project was the culmination of those efforts over the last decade.” 

Metro: Mott Community College Culinary Arts Facility

Mott Community College (MCC) in Flint, Mich., is dedicated to providing high quality, accessible and affordable educational opportunities and services that cultivate student success and individual development. As the school’s culinary arts programs grew in popularity, MCC identified the need for an expanded facility.

The new culinary arts institute would not have been possible without Cinnaire’s $9 million NMTC allocation. The new Culinary Arts Institute allowed MCC to expand their curriculum and to more than double their program capacity to serve approximately 400 students, bringing new students to the area and creating secondary economic impact in Flint. Development of the new facility created 65 temporary jobs, 10 new full-time jobs and retained an additional seven permanent jobs.

“Cinnaire is proud to be part of the team that made MCC a reality–renovating an iconic downtown building, while providing culinary arts educational opportunities and creating jobs and economic impact in Flint,” said Mark McDaniel, president and CEO of Cinnaire. “The new markets tax credit incentivizes private investment to spur community revitalization and economic development in distressed communities. MCC is the ideal example of the NMTC tool at work.  We are honored to join our partners from Mott Community College, the C.S Mott Foundation, Chase and Uptown Reinvestment Corporation to strengthen and support downtown Flint as a healthy, vibrant community.”

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