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New Markets Tax Credits News Briefs - April 2013

Thanks to GCI’s Terrestrial for Every Rural Region of Alaska (TERRA) project, Alaskans along the state’s northwest coast will now have access to broadband services. Using new markets tax credits (NMTCs) provided by Travois New Markets and an investment from U.S. Bancorp Community Development Corporation, phases two and three of the project can move forward. Phase two will extend the broadband network from Grayling to Nome, and phase three will extend up the northern coast to Kotzebue. The project, which began in 2010, started with TERRA-SW and connected 65 communities in southwestern Alaska. Currently, many rural Alaskan residents rely on satellite connections that can be slow and highly unreliable. With help from GCI, an Alaska-based voice, video and data communication services company, residents will have better internet access. This is expected to improve public safety, health care and education, and aid economic development through telemedicine and e-commerce. The project’s isolated location and severe weather conditions produce high construction and operating costs. NMTC financing includes $12 million from Travois, and more than $3.8 million of NMTC equity from U.S. Bancorp Community Development Corporation. Construction on the next two phases is expected to be completed by the end of 2014.

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U.S. Bancorp Community Development Corporation will provide $4.7 million in NMTC equity to fund development of a second facility for Discovery Science Center (DSC) in Los Angeles. The building in the San Fernando Valley’s Hansen Dam Recreation area was originally for the Children’s Museum of Los Angeles, but has never been occupied because the original operator went bankrupt in 2009, leaving the building incomplete. The tentatively named Discovery Science Center-Los Angeles (DSC-LA) will be a two-story, 58,000-square-foot facility with hands-on exhibits, a gallery devoted to California’s science standards and a 4-D theater. DSC-LA will be approximately the same size as the organization’s Santa Ana, Calif. location, which receives more than 500,000 guests annually and reaches an additional 220,000 students through outreach programs. Development of DSC-LA will create 250 construction, 150 part-time and 50 full-time jobs.

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The Winnebago Tribe of Nebraska will provide education to the families of at risk infants, toddlers and preschoolers through Educare Winnebago, a specially designed early learning school. NMTC financing was provided by Travois New Markets and Chase Community Development Banking invested in the tax credits. Educare operates 18 schools across the country, but this center will be the first Educare in a Native American community. The school will provide early childhood education to Winnebago tribe members. The project will serve 191 students and families. The unemployment rate in the community is 11.2 percent, and it has a poverty rate of 32.3 percent. The project is expected to be completed December 2013.

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Missouri Sen. Scott Rupp is looking to promote investment in technological and environmentally friendly businesses by renewing interest in the state’s NMTC program. Senate Bill 112 enforces the existing guidelines of the Missouri New Markets Development (MoNMD) credits. The program provides a tax credit that can be taken against certain taxes, such as state or bank, by investors in funds established by community development entities (CDEs). Current law prohibits the authorization of investments that would receive tax credits under the MoNMD program after June 30, 2010. If enacted, the bill would once again allow the authorization of new qualified investments with the NMTC. Rupp said the credit was created to reward venture capital investment, and would not involve any state funds for at least two years.

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

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