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New Markets Tax Credits News Briefs - July 2016

The New Markets Tax Credit Coalition (NMTCC) released a sign-on letter May 4 in support retaining the NMTC. The letter asks House Ways and Means Committee Chairman Kevin Brady to make the NMTC a priority in tax reform discussions. Leading the bipartisan effort are Ohio Republicans Reps. Steve Stivers and Mike Turner, as well as Rep. Jose Serrano, D-N.Y. A total of 55 Congressional Members signed the letter. The deadline to sign was May 16. In addition, the NMTCC May 23 submitted testimony urging lawmakers to make the NMTC program permanent. The written testimony was authored by NMTC Coalition board president Robert Davenport. He highlighted several reasons the program should be made permanent, such as that the NMTC has a proven track record in meeting the capital needs of struggling urban, rural and Native American communities across the country. The program also provides a return on investment to the federal government. The NMTC program has generated $38 billion in direct investment from 2003 through 2014, and investments in 2012 nationwide generated more than $540 million in state and local tax revenue. Between 2003 and 2015, the U.S. Treasury received allocation applications for about $315 billion. In conclusion, Davenport said that the NMTC needs to be expanded and made permanent. The testimony was submitted for consideration to the House Ways and Means Subcommittee on Tax Policy.

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On May 5, RDistrict One LLC announced $18.6 million in NMTCs for the rehabilitation a former Studebaker factory in South Bend, Ind. RDistrict One LLC is a partnership between Union Station Technology Center and developer Paul Kite Co. Rehabilitation plans include turning the old assembly plant into a technology hub. The plan also includes connecting the complex, which consists of three connected buildings, to Union Station through a tunnel under the railroad viaduct. Built in the 1920, the Studebaker complex contains nearly 1 million square feet of space. Rehabilitation costs will be $146 million. The NMTC financing was secured from the Urban Research Park CDE and the National Community Trust Investment Corporation.

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The NMTCC released the New Markets Tax Credit Progress Report 2016 in early June. Every year, the coalition sends a survey to all community development entities (CDEs) that have received NMTC allocations, requesting information on CDE activity in the previous calendar year. This is the 12th annual report and includes 2015 data. The report found that qualified equity investments (QEIs) totaled $1.6 billion, $3.6 billion was contributed in total project financing, 625 affordable housing units were created, 81.3 percent of NMTC investments were made in severely distressed communities, 44,992 total jobs were created or retained and there are $4.1 billion in projects in the pipeline for 2016. The report is available at www.newmarketscredits.com.

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The grand opening for Roswell Park Cancer Institute’s Scott Bieler Clinical Sciences Center in Buffalo, N.Y., was May 16. Financing for the $50 million, 11-story facility included $6 million in NMTCs for the first phase of construction. The center includes an expanded chemotherapy infusion center, space dedicated to cancer survivorship and supportive/palliative care and a women’s health center, which will incorporate services related to breast cancer, gynecologic cancers and breast imaging. Also included is 50,000 square feet of new administrative and research space. This center represents the cancer hospital’s first clinical expansion since 1998.

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Earlier this year, SunTrust Community Capital and Rural Development Partners announced the closing on $15 million in NMTC financing to expand a SafeRock production plant in Andrews, S.C. SafeRack is a subsidiary of SixAxis LLC and a manufacturer of fall protection equipment. The expansion is expected to cost $21.3 million and is projected to fill 100 full-time jobs. In addition, SunTrust Community Capital also announced $32.2 million in NMTC financing for Phase III of the Town Hall Education Arts Recreation Campus, or, THEARC. SunTrust Bank provided a $7.4 million loan to the Washington, D.C.,-based cultural, education and social services center as well. City First Bank of DC, the Low Income Investment Fund (LIIF) and Enterprise Community Investment Inc. each contributed $10 million in NMTC allocations. THEARC is home to nine nonprofit partners and provides dance, art and music classes, medical and dental care, afterschool activities, performances, education and social services to underserved communities. Phase III of THEARC will add approximately 92,000 square feet to the existing 110,000-square-foot development. This addition will be home to an expanded clinic run by Children’s National Medical Center, Appletree Institute for Education Innovation Inc., the Bishop Walker School for Boys and The Phillips Collection. There will also be a black box theater. Development is expected to be complete in 2017.

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

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