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New Markets Tax Credits News Briefs - June 2011

The Community Development Financial Institutions (CDFI) Fund announced that the new markets tax credit (NMTC) program was selected as one of 25 programs that will advance to the final stages of competition for the Innovations in American Government Award. The award highlights exemplary models of governments' innovative performance and serves as a catalyst for continued progress in addressing the nation's most pressing concerns. The CDFI Fund said this acknowledgement of the NMTC program is particularly significant given the growing recognition that the recession disproportionately affected low-income families and communities, whose recovery lags behind that of the nation.

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The Kentucky Department of Revenue issued a final rule regarding the administration and filing requirements for the state's new markets development tax credit program. The new guidelines direct community development entities (CDEs) to issue a qualified equity investment (QEI) in exchange for cash from a taxpayer within 90 days after receiving an approved application from the department. The CDE must then file the second part of the application, Form 8874(K)-A, as evidence of the receipt of cash for each QEI. If the department approves the form, DOR will return a copy along with a statement detailing the credit amounts available to the taxpayer during the subsequent seven-year credit period. DOR began accepting applications on March 1. The final rule, Administrative Regulations Section 15:180, is available at www.lrc.ky.gov.

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Mattapan Community Health Center (MCHC) announced the close of financing on its new four-story community medical center in Boston, Mass. The 58,781-square-foot building will replace MCHC's aging facility with more than double the space, and will include a pharmacy and bank branch. National Community Fund I (NCF), a United Fund Advisors affiliate, and Citi Community Capital partnered to provide NMTC financing for the $33.8 million project. NCF allocated $10.1 million in NMTCs, while Citi contributed $10 million in NMTCs and provided tax credit equity and bridge financing. Additional funding included an $8.2 million grant from Boston Medical Center, a $5.2 million loan from Citizens Bank, a $2.1 million capital campaign bridge loan from Boston Community Loan Fund, a $400,000 loan from the Environmental Protection Agency and an $11.5 million grant from the Health Resources and Services Administration. The project is expected to create at least 200 construction jobs and 133 permanent positions. The health center serves more than 7,000 patients annually, most of whom live in Mattapan or surrounding low-income communities.

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Greenline Ventures LLC announced that it has acquired the NMTC division of Capmark Financial Group Inc. The division has closed more than $1.1 billion of NMTC investment funds and financed more than $2.5 billion in low-income communities since the program's inception, Greenline said. Greenline, a newly formed company owned and managed by Capmark's former NMTC employees, will continue the group's historical business focus on capital markets, including tax credit equity and debt syndication; fund management; investment origination; and NMTC compliance and asset management. The acquisition includes all of Capmark's non-loan assets associated with the NMTC program, including managing member and administrative member interests in various community development entities; management contracts with various NMTC investment funds; and origination, asset management and servicing contracts with these entities. As part of the transaction, U.S. Bancorp, which serves as the tax credit investor for a majority of Greenline-managed funds, acquired the loan assets associated with Capmark's NMTC business.

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

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