Check back with GlobeSt this afternoon for an UPDATE to this story.
WASHINGTON, DC—This year, a pool of 282 applicants requested some $21.9 billion in New Market Tax Credit investments from the US Department of the Treasury. Yesterday afternoon, Treasury assistant secretary for financial institutions Cyrus Amir-Mokri, US Senator Charles E. Schumer (D-NY) and Charlie Werhane, Enterprise Community Investment Inc.'s president and CEO, revealed the 85 organizations that were selected to receive $3.5 billion in NMTCs.
The latest round of NMTCs—the 10th award round since the program's inception in December 2000—builds on the Obama Administration's commitment to increase economic opportunity in distressed areas of the country. The chosen organizations are based in 28 states and the District of Columbia, but will be providing services in a wide range of local and state areas as well as on the national level.
“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,” said Amir-Mokri at yesterday's event. “Through March 1 of this year, $31 billion worth of tax credit investments nationwide 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.”
This model is particularly impactful for public-private partnerships, he added. Much like Low-Income Housing Tax Credits, NMTCs allow investors to receive credits against federal income taxes for making equity investments in Community Development Entities. The credit totals 39% of the cost of the investment and is claimed over a seven-year period. In fact, Amir-Mokri noted, for every dollar invested by the Federal government, the NMTC program generates over $8 in private investment.
Investors can use the credits to taxable investors in exchange for stock or a capital interest in the CDE. Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities that will help finance community development projects, stimulate economic growth and create jobs.
Since the first round of awards in 2003, noted Schuer, the program “has been transforming low-income and distressed communities in ways that exceeded expectations.”
That's why, he adds, Congress extended the NMTC program at the end of the year. Further, President Obama has proposed a permanent extension of the credit, with an annual budget of $5 billion.
Check back with GlobeSt.com for an update to this story, including information on some of the entities that received the funds.
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Sule Aygoren
Aygoren oversees the editorial direction and content for ALM’s Real Estate Media Group, including Real Estate Forum and GlobeSt.com. In her tenure with ALM, she’s held roles of increasing responsibility, including Managing Editor. Aygoren has received several awards for her coverage including Best Trade Magazine Report from the National Association of Real Estate Editors and the James D. Carper Award for Young Journalists. Under her direction, Forum has received four national NAREE awards for Best Commercial Real Estate Trade Magazine.
