Last week, the Treasury’s Community Development Financial Institutions Fund announced a new $3.5 billion allocation of New Markets Tax Credits to revitalize low-income and distressed communities. Awarded to 85 different community development entities headquartered across 28 states and the District of Columbia, the tax credits allow these organizations to attract private investment capital to underserved communities across America. In the past, every dollar in tax credits has generated an average of eight private investment dollars for projects like manufacturing plants, retail developments, affordable housing and health centers. Perhaps that’s why last week’s announcement was greeted with excitement across the country. Check out some of the national and regional coverage below:
The Hill: Treasury awards $3.5 billion in tax credits
The Treasury Department announced Wednesday that it had awarded $3.5 billion in awards for a tax break aimed at helping spark economic development in areas of need. The $3.5 billion given out under the New Markets Tax Credit will be funneled to 85 organizations in all, located in 28 states and Washington, D.C.
“These credits are often critical in turning these redevelopment efforts into a reality,” Sen. Chuck Schumer (D-N.Y.), a key supporter of the tax credit, said on a conference call on Wednesday.
The New Markets Tax Credit was extended as part of the “fiscal cliff” deal through 2013, and President Obama’s latest budget called for expanding it.
Now more than a dozen years old, the credit has long had bipartisan support. It gives private-sector companies a 39 percent credit for development projects in areas with high poverty rates or low median incomes.
The Boston Globe: Massachusetts groups awarded $130m under New Markets Tax Credit program
Massachusetts groups have been awarded $130 million under the annual allocation of the U.S. Treasury Department’s New Markets Tax Credit program.
Bay State recipients include Massachusetts Housing Investment Corp., a private nonprofit investor and lender that received a New Markets Tax Credit allocation award of $65 million. MassDevelopment, the state’s finance-and-development agency, received a $40 million allocation under the program. And the Community Builders Inc., a Boston-based nonprofit developer of mixed-income housing, received a $25 million allocation, according to a Thursday press release from Massachusetts Housing Investment Corp., or MHIC.
“The New Markets Tax Credit addresses one of the most significant obstacles to economic development that low-income communities face: a lack of access to patient, private investment capital,” Treasury Assistant Secretary for Financial Institutions Cyrus Amir-Mokri said in a statement. “The $31 billion worth of tax credit investments nationwide in past years have gone toward preserving jobs and bringing community facilities and new businesses into neighborhoods that desperately needed them. I expect today’s awardees will continue that trend.”
In a statement of his own, MHIC president Joe Flatley added that the allocation under the program “means that we can continue to build on the expertise we have developed using New Markets Tax Credit financing for projects that create jobs and economic opportunity throughout New England.”
Cleveland Plain Dealer: Cleveland fund wins $30 million in New Markets Tax Credits for development projects in low-income areas
A Cleveland investment fund has won $30 million worth of federal tax credits that will shore up real estate projects in low-income pockets of the city and Cuyahoga County.
A fund affiliated with Cleveland Development Advisors, an arm of the Greater Cleveland Partnership, was the only Northeast Ohio winner in a $3.5 billion round of New Markets Tax Credits awards announced Wednesday. The U.S. Department of the Treasury allocates the credits, which certified community development entities like the Cleveland fund use to attract private investors to projects in distressed neighborhoods.
Across Ohio, five groups won $145 million worth of the awards. The fiercely competitive application process involved 282 applicants, seeking more than $21.9 billion in tax credits, and only 85 victors.
Milwaukee Journal-Sentinel: $155 million in New Markets Tax Credits awarded to four Wisconsin groups
Four Wisconsin organizations have received $155 million in New Markets Tax Credits from the U.S. Treasury Department to use to revitalize low-income, distressed communities. The allocations were part of the Treasury's announcement it would provide $3.5 billion of the credits to more than 85 groups. The recipients were chosen from a pool of 282 applicants, the Treasury said.
According to the Treasury, the Wisconsin recipients are:
• First-Ring Industrial Redevelopment Enterprise Inc., West Allis, which invests the funds locally, received $20 million.
• Greater Wisconsin Opportunities Fund Inc., Madison, which invests the funds statewide, received $35 million.
• Milwaukee Economic Development Corp., Milwaukee, which invests the funds locally, received $40million.
• Waveland Community Development LLC, Milwaukee, which invests the funds nationally, received $60 million.
The New Markets Tax Credit Program was established by Congress in 2000 to spur investments in low-income communities. The program attracts capital by allowing those who make equity investments in specialized financial vehicles to receive a tax credit worth 39% of their investment. The credit is claimed over seven years. The program has made 749 awards for a total of $36.5 billion since inception, the Treasury said.
Tampa Bay Business Journal: Florida groups get $100M in New Markets Tax Credits
Two Florida groups were awarded tax credit allocation authority under the New Markets Tax Credits program.
The Community Development Financial Institutions Fund awarded $60 million to Community Hospitality Healthcare Services LLC in Placida and $40 million to Florida Community Loan Fund Inc. in Orlando.
They were among 85 organizations nationwide that received $3.5 billion in awards under the program, which permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in Community Development Entities. Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities that will finance community development projects, stimulate economic growth and create jobs, a statement said.
Community Hospitality Healthcare Services said it would use its allocation to provide financing for the development and modernization of community medical facilities, while Florida Community Loan Fund said it would invest in high-impact projects in severely distressed communities throughout the Sunshine State.
Matt Bevens is Media Affairs Specialist at the U.S. Department of the Treasury.