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New Markets Tax Credits News Briefs - August 2011

The Office of the Comptroller of the Currency (OCC) has published a Community Development Investments newsletter that provides an in-depth look at bank financing for charter schools. The articles provide background information about charter schools and discuss the availability of federal, state and local resources to support their financing. The newsletter also contains case studies of financing structures provided by banks; one article discusses how NMTCs can be used as a financing mechanism. The newsletter is available on the OCC's web site at www.occ.gov.

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Waveland Community Development (WCD) allocated $10.5 million in new markets tax credits (NMTCs) to Houston, Texas' Dynamo Stadium. The community development entity (CDE) said the new 22,000-seat soccer stadium will be a state-of-the-art, open-air venue designed to host Dynamo matches as well as additional sporting and concert events. When operational in 2012, the stadium will be Major League Soccer's first soccer-specific stadium located in a major metropolitan city's downtown, according to WCD. It will join Minute Maid Park, the Toyota Center and the George R. Brown Convention Center as part of Houston's stadium district. Financing partners include Wells Fargo and Texas Certified Development Company. WCD said the stadium will create more than 1,500 local jobs.

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In another announcement, Waveland Community Development reported that it had allocated $14 million in NMTCs to the Junction Hotel in Ogden, Utah. The financing will be used to construct a 125-room Hilton Garden Inn with 5,000 square feet of conference space. The hotel is located in Ogden's Junction Redevelopment Area, a high poverty census tract. Since 2006, the city has invested nearly $40 million in tax increment and loan financing to redevelop the area. WCD expects the new hotel to provide jobs and services to the historically underserved census tract.

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MassDevelopment provided a $26 million NMTC financing package to Friends of KIPP Academy Lynn (KAL) Charter School Foundation. The financing includes $17.5 million in tax-exempt and taxable bonds issued on the organization's behalf. The school will use the proceeds to purchase a six-acre site in Lynn, Mass. and build a 68,000-square-foot middle and high school building. The new facility will replace KAL's smaller rented space, which is also located in Lynn, and will include 36 classrooms, 16 specialty rooms, a gym with locker rooms and storage, a cafeteria, a library, athletic fields and additional outdoor recreation space. The school will also have space for car and bus circulation as well as parking. At full capacity, the new campus will serve 750 students in grades five through 12. KAL expects the project to create more than 40 jobs.

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U.S. Bancorp Community Development Corporation (USBCDC) will allocate a significant portion of its NMTC investments to projects that increase healthy, affordable food availability in low-income communities. The bank said this commitment is in line with the Healthy Food Financing Initiative, which is addressing the healthy food needs of communities that lack nutritious options by providing technical and financial assistance available to CDEs and other businesses that employ sound strategies to meet these needs.

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Chase says it too will make investments through the NMTC program to support initiatives that provide fresh and healthy foods to low-income neighborhoods. The bank plans to work with CDEs to identify viable projects, primarily in underserved urban areas, that will provide access to healthy foods. NMTCs will be used to subsidize the development and expansion of grocery stores in low-income communities. Chase said it expects most of these projects to involve grocery stores, but that it is open to looking at new and innovative ways to distribute healthy foods to underserved areas.

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

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