Markets Tax Investments Credit Deals
The much-discussed New Markets Tax Credit (NMTC) is now starting
to facilitate the flow of capital into low-income communities in
tangible ways. The three transactions highlighted below are just
a few of the ways the NMTC is coming to life in the 12th District.
CDFI recently funded a $15 million dollar permanent loan to the Jacobs
Center for Neighborhood Innovation (JCNI) for the new Market Creek Plaza shopping
center in the Lincoln Park area of San Diego. Wells Fargo Bank was the tax
credit investor on the unique project and has agreed to open a bank branch
in the center. The center was conceived, designed, built, and will soon be
owned in part by over 2,000 local neighborhood residents. Market Creek Plaza
is a 20-acre commercial and cultural center that will serve 88,000 residents
in ten surrounding neighborhoods.
First Security Building is a 12-story
historic steel and glass office tower located in downtown Salt Lake
City. The $21 million rehabilitation includes a seismic retrofit,
new telecommunication systems, and exterior work.
Financing sources include a $13 million construction/permanent
loan, developer equity, and a $2.8 million historic and New Markets Tax
Credit equity investment. Both the construction/mini-permanent loan and
tax credit equity is being provided by Bank of America, with debt financing
from Commercial Real Estate Lending Group of Las Vegas, NV. The Fund
is managed by National Trust Community Investment Corporation, a subsidiary
of the National Trust
for Historic Preservation.
Portland Armory, originally constructed
in the 1890’s and listed on the National Register of Historic Places,
is one of Portland, Oregon’s finest and largest 19th century buildings.
By attracting US Bancorp Community Development
Bank in St. Louis to invest equity in the project, and combining New
Markets Tax Credits with Historic Rehabilitation Tax Credits, Business
Energy Tax Credits, and other financing, the Portland
Family of Funds was able to successfully structure a financing package.
The Armory transaction will provide over 300 new jobs, with a combined
payroll of $11 million, and an infusion of $9 million of new equity into
New Markets Tax Credit Program: How This Incentive Can Strengthen
America's Cities is a report
written by Jim Miara and published by CEOs for Cities that describes
the program objectives of the New Markets Tax Credit (NMTC) and
how it compares with other subsidies. The report details how the
program is administered, qualifying investments and how NMTCs are
allocated. The report also describes the financial structure of
two closed deals and analyzes currently pending deals that could
use the help of NMTCs.
For more on the New
Markets Tax Credit program, and to download the
study, go to the CEOs for Cities website.