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New Markets Tax Credits News Briefs - January 2014

On Dec. 4, Rep. Brian Higgins, D-N.Y., spoke before the House of Representatives advocating for a permanent extension of the NMTC program. At press time, the program was set to expire Dec. 31. Higgins said that the program has been critical toward making successful investments in communities like the city of Buffalo, where new markets tax credit (NMTC) investments have leveraged more than $180 million for projects, including the restoration of the historic Electric Tower and the development of the Innovation Center on the Buffalo Niagara Medical Campus. He also cited the Roswell Park Cancer Institute’s new Clinical Sciences Center, which received NMTCs. Higgins closed by saying that support for programs that yield economic development and job creation is more critical than ever.

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The Community Development Financial Institutions (CDFI) Fund commissioned the Urban Land Institute (ULI) to evaluate the first four years of the NMTC program. The CDFI Fund on Nov. 15 released “New Markets Tax Credit (NMTC) Program Evaluation.” ULI determined that the program has performed as expected by attracting private investments to low-income communities in both metropolitan and non-metropolitan areas. ULI also found that the program provides project flexibility, recipient diversity, a proportional urban-rural split and job creation and retention. In addition, the report also stated that NMTC substitution measures, leveraging analysis and improving estimates of investment costs of job generation could improve the program.

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On Dec. 10, Rapoza Associates released “Stories of Community Impact: 2013 Community Development Corporations Report.” The report profiles the work of community development corporations (CDCs) in improving urban and rural communities across the United States. Nineteen CDCs are profiled in the report and demonstrate key characteristics, such as they work in some of the poorest communities in the nation and they are community-controlled. Information about each project, project highlights and a community profile are given for each case study. The report found that the 19 CDCs, with a total of 31 projects, resulted in 1,800 units of affordable housing, several community facilities, healthcare facilities and totaled more than $2 billion in investments.

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On Nov. 8 Tax Advantage Group announced the completion of an $8.7 million NMTC transaction for Associated Hardwoods SC Inc., a lumber company that will use the NMTCs to build a sawmill in Gaffney, S.C. A total of 93 construction jobs are expected to be created and 15 full-time jobs will be created within the company. Funding was also provided through CEI Capital Management LLC. Wells Fargo Community Investment Holdings provided the NMTC equity and leveraged debt for the project.

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Husqvarna Group received $8 million in NMTCs from Hope Enterprise Corporation (HOPE), a CDFI, and Hope Federal Credit Union, for its Nashville manufacturing facility. Husqvarna Group will use the NMTCs for new planting and honing equipment for their hand-held lawn tool engine assembly. The facility will provide 22 new jobs. Chase Community Development Banking also provided $2 million in NMTC equity. The total cost of the project is expected to be $10 million.

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Seven community development entities (CDEs) in Nevada received a combined $200 million in NMTC equity from the State of Nevada Department of Business and Industry. The following CDEs each received $32 million in NMTCs: Advantage Capital Partners, Enhanced Capital Partners Inc., KHC New Markets Fund LLC, Stonehenge Community Development LLC, Urban Development Fund LLC and U.S. Bank community development entity. The Clearinghouse CDFI received $8 million.

 

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

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