Sign Up For Novogradac Industry Alert Emails

New Markets Tax Credits News Briefs - October 2016

The Community Development Financial Institutions (CDFI) Fund announced Aug. 31 that approximately $93.5 million in grants will be available to community development financial institutions (CDFIs) through the Capital Magnet Fund. For this second round of funding, the CDFI Fund received 125 applications requesting $609 million. The CDFI Fund officials expect about 30 awards to be made. Annie Donovan, director of the CDFI Fund, said in a press release that this round will include funding from Fannie Mae and Freddie Mac. Grants will be awarded to community development financial institutions (CDFIs) and nonprofit housing organizations and can be used to finance affordable housing activities, as well as related economic development activities and community service facilities. The Capital Magnet Fund had one previous round in 2010, awarding $80 million appropriated from Congress to 23 organizations.

***

The CDFI Fund released data Aug. 11 about new markets tax credit (NMTC) investments through fiscal year (FY) 2014. A summary report of the data published by the CDFI Fund says that through the first 12 application rounds of the NMTC program, community development entities (CDEs) disbursed nearly $38.5 billion in qualified equity investment (QEI) proceeds to 4,451 qualified active low-income community businesses. Of that investment amount, 66.9 percent was in real estate development and leasing activities, 31.4 percent was in operating businesses and 1.6 percent was in other financing purposes. Approximately 73.7 percent of investments went to projects in census tracts that met one of three indicators of “severe distress” and 24.9 percent of investments went to projects in census tracts that met all three indicators of “severe distress.”

***

Citi, New Markets Community Capital, together with MBS Urban Initiatives, announced Aug. 10 a combined $20.5 million in NMTC allocation and $6.6 million in NMTC equity for rPlanet Earth, a new manufacturing company in Vernon, Calif. rPlanet Earth will use the funding to build a new facility to recycle polyethylene terephthalate (PET) recycling. The building will also serve as the company’s headquarters. More than 100 jobs are expected to be created with the construction of the new facility.

***

Johnson Development and OTO Development announced Aug. 17 that the development of the AC Hotel in Spartanburg, S.C., is on track to be complete in September 2017. The AC Hotel is a planned 10-story hotel with 114 rooms, an outdoor pool, 2,500 square feet of meeting space, a restaurant and a rooftop bar and terrace. OTO Development will use $10 million in NMTCs for construction.

***

On Aug. 31, U.S. Bancorp Community Development Corporation (USBCDC), a subsidiary of U.S. Bank, announced $1.3 million in NMTC equity investment for the construction of two St. Louis community credit union branches. The branches are a Wealth Accumulation Center and St. Louis Community Credit Union Branch. Construction cost will total $4 million.

Journal Category:

New Markets Tax Credit

Authors:

Novogradac

Learn more about Novogradac's expertise and many services