New Markets Tax Credits News Briefs - November 2012

The CDFI Fund announced an information collection on July 23 regarding the NMTC Community Development Entity (CDE) Certification Application. Last month, the U.S. Department of the Treasury requested public comments on burden estimates caused by the information collection or any suggestions to reduce the burden, in accordance with the Paperwork Reduction Act of 1995.

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The Helena Cinemark Theatre in downtown Helena, Mont. received $7.75 million in new market tax credits (NMTCs) to increase its number of screens from eight to 11, including a new XD movie screen. The project is expected to create 40 construction jobs and 45 permanent positions. Helena’s Cinemark received NMTCs from the Montana Community Development Corporation (MCDC). According to the MCDC, the theater obtained funding under the qualifications of a qualified low-income census tract, an economic development hotzone and a local tax increment financing district. The theater is located in the Great Northern Town Center, which was once the site of the Great Northern Railroad depot. The 11-acre urban development is now home to commercial office buildings, restaurants, a bank, a hotel, an interactive museum, retail stores, parking and residential apartments and condominiums.

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Port Huron CDE LLC awarded $11 million in NMTCs to J.B. Development Company for its redevelopment of the 149-room Thomas Edison Inn in Port Huron, Mich. The 25-year-old riverfront facility will reopen in early 2013 as a Hilton DoubleTree hotel with a Twister Rooster restaurant. Once the nearly $30 million renovation is completed, the hotel will be part of a 45,000-square-foot convention center project in the Blue Water River Walk area. Port Huron CDE LLC received the NMTCs in 2007, which are set to expire in 2013.

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Greater Kansas City Local Initiatives Support Corporation (LISC) provided $5 million in NMTCs to renovate and expand the DeLaSalle Education Center in Kansas City, Mo. Purchased by UMB Bank, the credits will help upgrade the charter school’s existing building with sealed windows and the installation of energy efficient HVAC and roofing units. Funds will also go toward the construction of a 180,000-square-foot multi-purpose facility with a library, child care center and classrooms. The project will cost approximately $10 million and will increase enrollment at the school to 240 students.

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In more CDFI Fund news, the fund’s phone and fax numbers have changed. Old telephone and fax numbers will redirect for a limited time, but the CDFI Fund recommends updating one’s contact list as soon as possible. The change only affects telephone and fax numbers; email addresses remain unchanged. Updated contact information can be found at www.cdfifund.gov.

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HOPE Enterprise Corporation/HOPE Credit Union financed construction of the new Orthopedic Institute in Hattiesburg, Miss. with NMTCs. The $30 million development is scheduled to open its doors to bone and joint patients across the South Mississippi region beginning Oct. 15. The clinic will include 30 licensed orthopedic beds, six operating rooms, pre-operative rooms and recovery rooms. The 74,000-square-foot facility will also offer physical therapy, laboratory and diagnostic imaging services. HOPE used some of its tax credit allocation to make two loans for the institute’s development, with one of the loans forgiven over a period of seven years.

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CEI Capital Management LLC, which is owned by Coastal Enterprises Inc., announced that it has allocated $63 million in NMTC among three project recipients since June, creating more than 400 jobs. CEI partnered with Smith NMTC Associates LLC and U.S. Bancorp Community Development Corporation to provide Habitat for Humanity with $42 million in NMTC. The NMTC helped fund 21 home building developments across the country, resulting in 437 new Habitat homes coast to coast. An additional $960,000 went to CCML Maine Investment Fund for a new medical center in the Lamb Block district of Livermore Falls, Maine. CEI also contributed $20 million to Westervelt Company to build a new wood pellet manufacturing facility in Aliceville, Ala.

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CEI Capital Management LLC was just one contributor of NMTC to the Aliceville, Ala. wood pellet manufacturing facility. Westervelt Company received $55.5 million in NMTC from WNC & Associates, Wells Fargo Bank N.A., Rural Development Partners and CEI. Wood pellets burn with a carbon footprint significantly less than that produced by burning coal, making it a sought-after renewable energy source. Development of the $71-million facility will create 800 temporary construction jobs and 275 permanent jobs in an area that has a local poverty rate of 27 percent. Once completed, the facility is expected to generate more than $37 million annually in revenue from the sale of wood pellets and is projected to increase business for local timber and trucking companies. As part of a community benefits agreement, Westervelt Company will reinvest $110,000 into the community for services such as employment training programs. The facility is expected to be completed in the summer of 2013.

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The NMTC was one of 111 government initiatives named a 2012 Bright Ideas program by the Ash Center for Democratic Governance and Innovation at the John F. Kennedy School of Government, Harvard University. Bright Ideas recognizes government organizations that offer creative solutions to public concerns like urban and rural degradation, environmental preservation and education. The NMTC was recognized in the economic development category for encouraging new economic development in distressed areas. Other organizations recognized in this category include Project Green House in Flint, Mich. for recycling 95 percent of abandoned home building materials and Washington, D.C.’s One City, One Hire program that connects unemployed residents with local employers. Bright Ideas applications are accepted year-round and are open to programs administered by or in partnership with at least one governmental entity. Winners are showcased on the Ash Center’s Government Innovators network, an online forum for public policy solutions. Get more information on the Bright Ideas program or access the application on www.ash.harvard.edu.

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In August, Greater Des Moines (GDM) Habitat for Humanity and affiliates in Cedar Valley, Iowa Heartland, Iowa Valley and Siouxland shared $12 million of NMTC to finance 94 Habitat for Humanity homes across the state. GDM alone used nearly $4.5 million in NMTC investment from Iowa Community Development LC to build 27 homes expected to be completed by May 2013. GDM also recently built Iowa’s first homes to meet the National Association of Home Builders Emerald standard, which requires energy savings of 60 percent or more. Construction for Habitat homes across Iowa will create 125 construction jobs and one full-time affiliate job, in addition to retaining 73 full-time and 16 part-time affiliate jobs.

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Eastern Bank closed a $15 million deal using NMTC to help Caring Health Center in Springfield, Mass. acquire a new building. Expansion of the federally funded health center will double its existing space. Opened in 1995, the center provides health care to patients with socioeconomic, linguistic and cultural barriers. Over the past 17 years, it has grown its staff from four to 150 employees. Eastern Bank’s partners in the deal were Massachusetts Housing Investment Corporation, Building America, the Life Initiative and the Health Resources and Service Administration.