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New Markets Tax Credits News Briefs - February 2014

The Community Development Financial Institutions (CDFI) Fund announced on Dec. 20 that the Bank of New York Mellon (BNY Mellon), a global investment company, will be the master servicer/trustee for the CDFI Bond Guarantee program. BNY Mellon will provide custodial, loan administration, servicing, monitoring and other infrastructure services. BNY Mellon will also establish and manage accounts, monitor collection actions and review reports provided by eligible CDFIs and qualified issuers.

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The Campaign to End Obesity released a study entitled, “The New Markets Tax Credit: Opportunities for Investment in Healthy Foods and Physical Activity,” in December 2013. Prepared by Ernst & Young, the report reviewed the effect of new markets tax credits (NMTCs) on access to healthy foods and opportunities for physical activities. The report found that until recently the application process for NMTC allocations include no criteria related to healthy food access and still includes no criteria related to recreation and fitness access. The report also found that smaller projects that could have significant impact on the community may not be able to keep up with the compliance period or costs. The report concluded that the NMTC program has the potential to increase food and recreation facility access in low-income communities, but that direct support could improve access.

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Construction for Blackstone Valley Prep Mayoral Academy began in late 2013 with a $10.5 million federal NMTC allocation. Total cost is projected to be $15 million, with U.S. Bancorp Community Development Corporation (USBCDC) providing $4.25 million in tax credit equity. Located in Cumberland, R.I., the academy will provide 14 classrooms, a cafeteria, gymnasium and music and art rooms to 400 elementary students. The school is expected to create more than 40 full-time jobs and is scheduled to open in late 2014.

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On Dec. 18, the CDFI Fund released its current list of certified community development financial institutions (CDFIs). There were 808 certified CDFIs as of Dec. 15. Of these, 434 of had been recertified per the new requirement for an organization if its certification has passed its initial three-year term. The CDFIs include 492 loan funds, 177 credit unions, 76 banks or thrifts, 50 depository institution holding companies and 13 venture capital funds.

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HRI Properties received a $100 million financing package for the purchase and conversion of 225 Baronne, a downtown New Orleans, La. mixed-use development. The package included federal NMTCs, federal historic tax credits (HTCs), state HTCs and premium tax credits from the Louisiana New Markets Jobs Act. The package also included construction and permanent debt provided by commercial banks. Capital One Bank lead the transaction. Capital One Community Renewal Fund, Whitney Bank, Whitney New Markets Fund, First Bank and Trust, USBCDC, Stonehenge Capital Company, the National Trust Community Investment Corporation and National Cities Fund also provided financial aid to the development. The 30-story building will be converted into 192 apartments, with 124 one-bedroom, 63 two-bedroom and five rooftop penthouse units and 188 hotel rooms for the Aloft Hotel (part of Starwood Hotel chain). The development will create 76 permanent jobs in the hotel as well as an estimated 300 construction jobs.

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Franklinton Preparatory Academy in Columbus, Ohio, received a combined total of $9.5 million in federal and state NMTCs in December for the rehabilitation of the nonprofit charter high school. The 23,700-square-foot school is a $4.5 million project. Currently the school serves ninth and 10th graders. The rehabilitation and expansion will enable it to add 11th and 12th grades, expanding from 100 to 300 students.

Journal Category:

New Markets Tax Credit

Authors:

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