New NMTC Report and Video Demonstrate Impact of Expired Federal Tax Credit in Distressed Communities
WASHINGTON, D.C. – A new report on the New Markets Tax Credit (NMTC) indicates the federal tax credit was responsible for creating nearly 40,000 jobs last year, according to a significant survey of 2014 projects. The 2015 NMTC Progress Report, which the Coalition released today during its annual Policy Conference, details the impact of the NMTC in economically distressed communities in the previous calendar year. Also released was a video explaining how the NMTC works and including profiles from a handful of NMTC projects – ranging from a manufacturing facility in Alabama to a community facility in Los Angeles, a grain terminal in Washington, a health and recreation center in Ohio, and an after-school youth program in New York.
“These numbers and stories illustrate the flexibility of the New Markets Tax Credit, a unique community development tool for financing business and development activities and boosting the local economies of low income rural communities and urban neighborhoods across the country,” said Jose Villalobos, senior vice president of TELACU and president of the NMTC Coalition.
Like the ten previous annual reports produced by the Coalition, this year’s Progress Report offers updated investment and transaction information from NMTC Allocatee survey respondents for the previous calendar year (2014). It includes data from 67 Community Development Entities (CDEs), representing $16.8 billion in total NMTC allocations from 2003 through 2014. The report findings also demonstrate the importance of the NMTC to the manufacturing economy, which has been in steep decline over the last couple decades. In 2014, the program created nearly 10,000 manufacturing jobs. Other projects included community facilities and other important amenities such as healthcare facilities, social service facilities, and schools and vocational training facilities. More than 71 percent of these projects were located in severely distressed communities that far exceed the statutory requirements for poverty and income.
“One example from 2014, is the Crosstown Concourse project, located in a blighted neighborhood in Memphis, Tennessee,” said Bob Rapoza, spokesman for the NMTC Coalition. “This project will preserve the abandoned and dilapidated, 1 million square foot, historic Sears distribution facility and redevelop the space into a mixed-use facility, anchored by arts, education and healthcare tenants, creating an expected 500 full-time jobs in a neighborhood with an unemployment rate of 18 percent.”
Since its inception, NMTC has delivered some $70 billion to urban and rural communities left out of the economic mainstream. This unprecedented amount of private sector has created around 750,000 jobs, financed industrial and commercial facilities, health and community centers and small business loan funds.
The NMTC expired on December 31, 2014. Bipartisan bills to provide a permanent authorization for the NMTC have been introduced in both the House and Senate The New Markets Tax Credit Extension Act of 2015 (H.R. 855) and (S. 591).
“Survey respondents reported $3.5 billion in projects in the pipeline for next year, but without an extension of the program, these projects won’t be able to go forward,” Rapoza said. “For many rural and urban communities, the NMTC is the only opportunity available for credit-starved, small- and medium-sized businesses.”
In addition to the report and the video, the Policy Conference will draw CDEs, investors and stakeholders from across the country that are engaged with NMTC work in their communities for informative panels on the state of the NMTC and prospects for its future. The Conference provides a forum for attendees to hear directly from members of Congress, including Senator Roy Blunt (R-MO) and Chaka Fattah (D-PA), as well as CDFI Fund Director Annie Donovan, about how the NMTC is working to attract investment capital and generate economic activity in low income areas. Additionally, conference attendees will have the opportunity to hear from key Treasury Department officials, NMTC investors and leading law firms helping navigate the regulatory and legal factors faced by NMTC practitioners, and Congressional staffers will provide insight on the state of NMTC legislation in both chambers.
That evening, the Coalition will hold a reception on Capitol Hill, which will include remarks from Senator Ben Cardin (D-MD) and Congressmen Richard Neal (D-MA), as well as a viewing of the NMTC video with testimonials from communities, congressional and federal agency leaders. The event will take place in the Kennedy Caucus Room, room 325 of the Russell Senate Office Building.
For more information on both the conference and the reception, please visit the “Events” page on the NMTC Coalition’s website.
About New Markets Tax Credit Program
The New Markets Tax Credit was enacted in 2000 in an effort to stimulate private investment and economic growth in low income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. The NMTC is a 39 percent federal tax credit, taken over seven years, on investments made in economically distressed communities. Today due to NMTC, more than $70 billion is hard at work in underserved communities in all 50 states, the District of Columbia, and Puerto Rico.