Bipartisan Call to Make Federal Tax Credit Permanent that Leverages Private Investment in Economically Distressed Communities, Expands Businesses and Creates Jobs
Washington, D.C. –Legislation was introduced in the House and Senate to secure the future of the New Markets Tax Credit (NMTC). Congressman Pat Tiberi (R-OH) and two colleagues on the House Ways and Means Committee, Congressmen Tom Reed (R-NY) and Richard Neal (D-MA), the Ranking Member on the committee, introduced the House bill. They were joined by 19 of their colleagues. In the Senate, the bill was introduced by Senators Blunt (R-MO) and Cardin (D-MD). The bills, both titled The New Markets Tax Credit Extension Act of 2017, respectively H.R. 1098 and S. 384, would ensure that rural communities and urban neighborhoods left outside the economic mainstream have access to financing to grow their economies and create jobs.
Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the New Markets Tax Credit is a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities. Congress extended the NMTC for five years as part of The PATH Act. (P.L. 114-113) in December 2015. Since the Trump Administration and Congressional leaders are working on a major tax overhaul, organizations, businesses and communities that have seen the impact of the NMTC have recently urged Congress to make the credit a permanent part of the tax code.
“Last week, some 2,000 groups sent a letter to Congress, calling for legislation that provides a permanent authorization and expansion of the NMTC. The strong support of the New Markets Tax Credit is a direct result of the tangible impact it is making in distressed rural and urban communities that have been left outside the economic mainstream,” said Bob Rapoza, spokesperson for the NMTC Coalition. “The NMTC has generated over 750,000 jobs and delivered $75 billion in total capital investment through public-private partnerships.”
The letter to Congress is signed by public and private organizations from every state, including community development organizations; nonprofit service providers; banks and credit unions; state and national trade associations and chambers of commerce, including the American Bankers Association and other groups representing thousands of members; affordable housing organizations; schools, universities and education nonprofits; city governments, state and local elected officials and agencies; and many other businesses, ranging from very large businesses to small, family-owned businesses.
U.S. Department of the Treasury data indicates more than 72 percent of NMTC activity is in severely distressed communities with unemployment rates at least 1.5 times the national average or with poverty rates of at least 30 percent. In FY 2016 alone, the CDFI Fund, which operates the program at Treasury, reported that the NMTC delivered $3.16 billion in financing to 530 businesses, community facilities, and economic revitalization projects. Communities put the capital to work, creating nearly 11,000 permanent jobs and almost 27,000 construction jobs in areas with high unemployment and poverty.
House and Senate lawmakers have added their own perspective to the introduction of this legislation:
“The New Markets Tax Credit has spurred investment and driven real job growth across the state of Ohio. It is an important program that helped revitalize the Over-the-Rhine neighborhood in Cincinnati, financed the Ironville Terminal in Toledo, funded a new grocery store in an underserved area of Columbus and much more. Making the NMTC a permanent part of our tax code would provide more certainty to communities across the country looking for the same proven results of unlocking economic potential based on their needs.”—Congressman Pat Tiberi (R-OH).
“The New Markets Tax Credit (NMTC) has generated billions in capital, driving business and jobs growth in communities that need it most. In Massachusetts, this highly successful initiative has helped spur development from the Berkshires to Boston. In Holyoke, the NMTC-financed Massachusetts Green High Performance Computing Center created 13 jobs at the center, and more than 130 research and research-related jobs at the universities.”—Congressman Richard E. Neal (D-MA).
“We are excited to introduce a bill that will permanently extend the New Markets Tax Credit. Making these changes to the program will provide certainty to those looking to make long-term investments in upstate New York. This is fair and necessary legislation that will help spur economic growth and job creation in communities across the country.” – Congressman Tom Reed (R-NY).
“The New Markets Tax Credit Program has a proven track record of spurring investment, expanding opportunity, and improving the quality of life in communities that need it most. In Missouri, the NMTC has benefited a total of 177 businesses and economic revitalization projects, creating thousands of jobs and resulting in a total of $3 billion in new investments. The NMTC provides a critical incentive for drawing much-needed capital to low-income rural and urban areas, and I look forward to working with my colleagues to ensure it continues.” –Senator Roy Blunt (R-MO).
“In Maryland, the New Markets Tax Credit has been deployed across our state on a diverse range of infrastructure and community development efforts, from a supermarket project to provide greater access to healthy food in my home city of Baltimore, to a conservation center on the Eastern Shore,” Cardin said. “I am pleased once again to be a supporter of this bipartisan legislation, which will create jobs and stimulate our economy in communities across Maryland and across America.” –Senator Ben Cardin (D-MD).
“As a result of the credit’s proven ability to create jobs and move the economic needle in the rural and urban areas where it’s been invested, the New Markets Tax Credit has the support of a strongly bipartisan delegation in Congress,” said Robert W. Davenport, President of the NMTC Coalition and President Emeritus of National Development Council. “We hope their colleagues will follow suit and support the NMTC Extension bills, which will help create thousands of jobs and grow business opportunities in our communities that need it the most.”
Businesses, investors and organizations sign letter urging Congress to make the community and economic development tax credit permanent
Washington, D.C. –Today some 2,000 groups that have seen the New Markets Tax Credit at work in their communities sent a letter to Congress, calling on it to enact legislation that provides a permanent authorization and expansion of the NMTC. Signatures came from every state and included community development organizations; nonprofit service providers; banks and credit unions; state and national trade associations and chambers of commerce, including the American Bankers Association and other groups representing thousands of members; affordable housing organizations; schools, universities and education nonprofits; city governments, state and local elected officials and agencies; and many other businesses, ranging from very large businesses to small, family-owned businesses.
“This broad support is a direct result of the NMTC’s unique and flexible design, allowing communities to decide what projects are best, rather than Washington picking winners and losers,” said Bob Rapoza, spokesperson for the NMTC Coalition. “Since its implementation, the NMTC has leveraged an unprecedented level of investment to low-income rural and urban communities—generating more than $75 billion in total capital investment through public-private partnerships.”
Congress established the New Markets Tax Credit in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities that lacked access to the patient capital needed to support and grow businesses, create jobs, and improve local economies.
“Since the first NMTC projects were done in 2003, the credit has generated nearly 750,000 jobs in the rural and urban communities where investment is needed most. In fact, U.S. Department of the Treasury data indicates more than 72 percent of NMTC activity is in severely distressed communities with unemployment rates at least 1.5 times the national average or with poverty rates of at least 30 percent,” notes Rapoza.
Presidents and Congressional leaders of both political parties have supported extensions of the NMTC. The PATH Act. (P.L. 114-113) extended the NMTC for five years (2015-2019) at $3.5 billion in annual credit authority, the largest and longest extension in the program’s history. In the 114th Congress, Senators Roy Blunt (R-MO) and Chuck Schumer (D-NY), and Congressmen Pat Tiberi (R-OH), Richard Neal (D-MA) and Tom Reed (R-NY) led two solidly bipartisan bills to make the NMTC permanent, The New Markets Tax Credit Extension Act of 2015, S. 591 and H.R. 855, respectively.
“Americans in our most distressed rural communities and urban neighborhoods have good business ideas, but the cost and availability of mainstream capital has been impediment to their economic growth.” said Robert W. Davenport, President of the NMTC Coalition and President Emeritus of National Development Council. “Our message to Congress is that it’s time to make a solid investment in federal programs that work—and the New Markets Tax Credit fits that bill.”
The Coalition urges supporters of the NMTC to reach out to their members of Congress and urge them to make the NMTC a permanent part of the tax code. Bipartisan extension legislation will be introduced soon. Updated target lists are available on our advocacy page.
As is customary, members of the Senate Finance Committee submitted written questions to Treasury Secretary Steven Mnuchin following his confirmation hearing on January 19th. Senators Wyden, Cardin, Cantwell, and Brown probed the Trump Administration's interest in the NMTC in the context of both tax reform and Trump's interest in revitalizing low income urban neighborhoods and rural towns. Mnuchin did not commit one way or the other on the NMTC or other tax credits, as is expected at the beginning of a tax reform process, but rather, promised to review the NMTC and to ensure that tax reform benefits long-distressed communities.
Below, find the written questions and Mnuchin's answers.
Senator Ron Wyden
During the campaign, the President often expressed his intention to bring jobs and investment back to low income, high unemployment rural communities, and urban areas. Over the last 15 years, the New Markets Tax Credit has demonstrated that it is an important tool for revitalization. As the Administration assembles its tax reform package, I hope you will take a serious look at making the New Markets Tax Credit permanent.
Since the credit was launched in 2001, $38 billion in direct New Markets Tax Credit investments were made in businesses and these New Markets Tax Credit investments leveraged over $75 billion in total capital investment to businesses and revitalization projects in communities with high rates of poverty and unemployment.
This financing has resulted in the creation of 750,000 jobs and the financing of commercial and industrial facilities, day care and health care centers, mixed use facilities and small business loans, all of which improve local economies and the quality of life in distressed neighborhoods.
In Oregon, $843 million in New Markets Tax Credit capital has leveraged a total of $1.73 billion in financing for a range of projects and created nearly 15,000 construction jobs and more than 16,000 permanent jobs.
For example, Chaucer Foods created about 73 new jobs in Forest Grove, Oregon with the opening of a new freeze-dried food processing facility.
NMTC financing helped Advantage Dental, one of Oregon’s largest dental health care providers for low-income persons within the state serving over 200,000 patients, finance seven additional dental clinics providing dental services to the uninsured and low income individuals.
In Ontario, OR, $4 million New Markets Tax Credit allocation facilitated the purchase and necessary improvements of a factory for Fry Foods, Inc., bringing needed jobs to the area.
And in Dillard, Oregon, the NMTC helped Roseburg Forest Products, a manufacturer of wood products, obtain working capital for capital improvements needed to remain competitive and retain critical manufacturing jobs. The influx of working capital allowed RFP to install new equipment and expand its facilities so that RFP can capitalize on the timber industry’s recovery and retain 971 jobs.
The New Markets Tax Credit has bipartisan support, and has been very successful in leveraging private sector capital for investment on some of the poorest urban and rural areas of the America. It will be a valuable tool in your efforts to bring jobs back to communities left behind by the economic recovery. Do I have your commitment that you will work with me to make permanent this important program?
Steven Mnuchin: I share your commitment to bring back jobs to these communities that have been so gravely affected by economic conditions for which they had no part in creating. If confirmed I will work with you to make sure that poorest and rural areas of American are no longer left behind.
Senator Maria Cantwell:
Please tell me if you consider the following provisions of tax code special interest deductions:
a. The Low Income Housing Tax Credit – a provision the Chairman, Ranking Member and I strongly support expanding, that has financed nearly 3 million affordable homes for low-income working families since its creation in the last comprehensive tax reform, that sustains nearly 100,000 jobs annually.
b, The New Markets Tax Credit – which has leveraged nearly $75 billion in total capital investment in low-income urban and rural communities across the country.
Steven Mnuchin: If confirmed, I will work with Congress to determine which tax credits or deductions warrant retention, modification, or elimination in order to maximize economic growth and job creation.
If confirmed, I will work with your office to review the New Markets Tax Credit program.
Senator Ben Cardin
During his campaign, the President often mentioned his intention to revitalize low income urban neighborhoods and to encourage job creation through infrastructure investment. Credits like the New Markets Tax Credit program and Historic Tax Credit program have been an important factor in the revitalization of communities across the country, including in my hometown of Baltimore.
Working with Senator Blunt, Senator Schumer and others I was pleased that NMTC was extended for five years in the bi-partisan PATH Act of 2015. I intend to introduce bipartisan legislation in this Congress to make NMTC a permanent part of the tax code.
Since the credit was launched in 2001, $38 billion in direct NMTC investments were made in businesses and these NMTC investments leveraged over $75 billion in total capital investment to businesses and revitalization projects in communities with high rates of poverty and unemployment.
This financing has resulted in the creation of 750,000 jobs and the financing of commercial and industrial facilities, day care and health care centers, mixed use facilities and small business loans, all of which improve local economies and the quality of life in distressed neighborhoods.
In Maryland, some $800 million in NMTC capital has leveraged more than $2 billion in other financing for a range of projects and created over 25,000 construction jobs and more than 7,000 permanent jobs.
NMTC has been an important factor in the revitalization of East Baltimore and the establishment of a Life Sciences Building that is a key element of a large effort to support business and civic leaders to revitalize that area. It is also a key financing source for a new facility at Baltimore’s Maryland Institute College of Art, as well as a new business incubator that will foster the growth of entrepreneurial food vendors.
Another infrastructure and community development program that has seen similar success and bipartisan support is the Historic Tax Credit. Working with Senator Collins, I’ve introduced—and plan to reintroduce—legislation that would encourage economic development and job growth across the country by making common-sense changes and enhancements to the federal HTC.
Since the creation of the credit, the HTC program has generated $78 billion in historic preservation activity to rehabilitate more than 41,250 historic properties, including the creation of over 525,000 housing units, of which approximately 150,000 are low and moderate-income units. Historic preservation programs have created more than 2.36 million jobs nationwide since 1978 (85,058 new jobs in FY 2015). A recent study by the National Trust for Historic Preservation estimates that every $1 of credits generates a minimum of $4 of private sector investment.
In Maryland, the federal HTC has supported hundreds of projects that have spurred economic growth in communities around the state, ranging from the development of a multicultural service center to affordable housing units for teachers and office space for nonprofit educational organizations.
Given the President’s goals, do you agree that credits like the NMTC and HTC can play a critical role in community redevelopment and infrastructure?
Can you commit to retaining these important incentives in a Trump Administration tax reform package?
Steven Mnuchin: Our objective is to grow the economy and economic opportunity. If confirmed, I will work with you and other Members of Congress to ensure that the appropriate incentives are retained.
Senator Sherrod Brown
Does the Administration support making the New Markets Tax Credit permanent and expanding the size of the annual allocation to meet demand?
Steven Mnuchin: The Trump Administration is committed the growing the overall economy and improving efficiency in our tax code. If confirmed, I pledge to use these principles as guidelines when working with Congress to enact measures that will assist in meeting our common goal of reducing overall tax burden while growing the economy.
Video of the Hearing
Last month, the CDFI Fund awarded $7 billion in NMTC allocation. Where will that allocation be deployed? We have a decent idea, thanks to new data on state targeting from the CDFI Fund.
Heatmap of 2015/2016 Allocation Targeting
The heatmap above shows where CDEs are targeting their 2015/2016 allocation. But it tells a misleading story, with high population states receiving more NMTC allocation.
Rather than adjusting on a per capita basis, instead, I divided targeted amount of NMTC allocation by the number of NMTC eligible census tracts in a state (download the full dataset). That produces this reweighted heatmap.
In the adjusted map, you can see that the top states are Arkansas, Hawaii, Idaho, Montana, Nevada, and Wisconsin. In fact, we project that Wisconsin will receive more than a million dollars per eligible census tract.
The Top Ten States
|State||Estimated amount targeted by 2016 round award recipients||NMTC Eligible Census tracts||2016 NMTC allocation per eligible census tract|
Today, the NMTC Coalition is excited to release a new report showcasing NMTC success stories from every state and the District of Columbia. These profiles from each state show the flexibility of the NMTC and demonstrate its ability to drive and leverage capital in investment-starved communities, creating economic opportunities and jobs in our country’s poorest rural communities and urban neighborhoods.
Every four years, the Coalition releases this report, which serves as an important tool for educating new Administrations and new Members of Congress. The 2016 edition of the NMTC at Work report features 89 NMTC projects, ranging from rural to urban, from grocery stores, health care centers and community centers to manufacturing businesses and charter schools, as well as many other important projects identified by community leaders.
These profiles from each state show the flexibility of the NMTC and demonstrate its ability to drive and leverage capital in investment-starved communities, creating economic opportunities and jobs in our country’s poorest rural communities and urban neighborhoods.
The report includes NMTC success stories and maps of NMTC activity.
Historic New Markets Tax Credit round will drive private-sector investment to communities left behind, growing businesses and creating jobs where they are needed most
WASHINGTON, D.C. – The U.S. Department of the Treasury Secretary Jack Lew announced the Calendar Year 2015 and 2016 New Markets Tax Credit (NMTC) allocation awards today at Educare DC, an NMTC-financed project providing early childhood educational programs in Northeast Washington, D.C. NMTC allocations were awarded to 120 Community Development Entities (CDEs) from around the country.
“The Coalition estimates that the latest round, based on analysis of more than 4,000 NMTC projects, will finance 844 businesses and revitalization projects and create some 166,000 jobs for people in communities left behind, adding to the NMTC’s long history of success,” said Bob Rapoza, spokesman for the NMTC Coalition. “In fact, the NMTC has generated more than $75 billion in total capital investment through public-private partnerships since the first credits were allocated in 2003.”
In April, Treasury announced it would combine the 2015 and 2016 rounds, for a total of $7 billion in NMTC allocations, allowing the 2016 and future award rounds to be announced in the year in which they are authorized. This action was made possible as a result of the PATH Act, which Congress passed in December 2015, providing for a five-year extension. The legislation provided the single largest and longest investment in the community development program’s history.
After this combined round, Treasury is authorized to make three additional allocations of $3.5 billion in 2017, 2018, and 2019. The $7 billion in NMTC allocation costs the federal government only $1.88 billion in foregone tax revenue, and thanks to the NMTC’s public-private partnership model, low-income communities will receive $14 billion in total capital, including $2.8 billion to rural areas. A key criterion of the program is that all applicants must provide a pipeline of projects that are ready to proceed should they receive NMTC financing. As a result of the low cost, the estimated cost per job for NMTC is less than $11,500.
Department of Treasury data shows 75 percent of NMTC activity is in severely distressed rural and urban communities with unemployment rates at least one and a half times the national average, poverty rates of at least 30 percent, or median incomes less than 60 percent of the area median income. Further, since its inception, the credit has led to more than 750,000 jobs. The credit is increasingly being used to bring manufacturing jobs back to America, with a record 30 percent of NMTC financed projects involving the financing of industrial facilities, waste recycling centers, and cutting-edge green-tech businesses in 2015. The credit is also used to finance health centers, child care and community facilities, schools, grocery stores and other businesses identified by communities and local leaders.
“As a result of the credit’s proven ability to create jobs and move the economic needle in the rural and urban areas where it’s been deployed, the NMTC has the support of a strongly bipartisan delegation in Congress,” adds Rapoza.
Congressional leaders also applauded the announcement of the 2015-2016 NMTC allocation awards:
“I was proud to lead efforts to secure a five-year extension of the NMTC in the PATH Act. I’ve seen the impressive results of the NMTC in Missouri, with 177 businesses receiving financing between 2003 and 2014, leveraging over $1.6 billion in total project investments. From the Save-a-Lot in Pagedale and Payit in Kansas City, to the rehabilitation of St. Louis Union Station—the NMTC is creating jobs and boosting local economies.” –Senator Roy Blunt (R-MO), who introduced New Markets Tax Credit Extension Act of 2015 (S. 591) on February 26, 2015, a bill which would make the NMTC permanent. Senator Blunt was the lead sponsor of a similar bill in the 113th Congress as well.
“The New Markets Tax Credit is a vital and cost-effective tool that is creating jobs, boosting opportunity and driving real growth across the country. I’m glad that Congress took the important step of providing a five-year authorization of the NMTC in the PATH Act, which was signed into law last year. I will continue to advocate for this program so that more communities can have access to the capital they need to unlock economic potential in their own backyards.” —Congressman Pat Tiberi (R-OH), who introduced New Markets Tax Credit Extension Act of 2015 (H.R. 855) in the House on February 10, 2015, which would make the NMTC permanent.
“We care about bringing quality, family sustaining jobs to our region and our nation. This is a commonsense bipartisan, initiative that will help revitalize communities and create needed jobs. It’s only right that we encourage private sector job growth for the sake of hardworking men and women everywhere. That’s why we are proud to work with Representatives Tiberi and Neal, and Senators Blunt, Schumer, Daines and Cardin to ensure the support this proposal deserves.”—Congressman Tom Reed (R-NY), an original and lead cosponsor of H.R. 855.
“In the past decade, the New Markets Tax Credit (NMTC) has generated billions in capital and created hundreds of thousands of jobs nationwide in economically distressed communities. In Massachusetts, this highly successful initiative has helped spur development from the Berkshires to Boston. As a longtime supporter of the tax credit, I welcome today’s announcement from the Treasury Department that an additional $7 billion will be invested in projects across the country thanks to the provision. It is another reminder just how effective the NMTC program has been.”—Congressman Richard E. Neal (D-MA), who is the lead Democratic cosponsor on H.R. 855.
To find out more about how the NMTC works in distressed urban neighborhoods and rural communities, watch this video on how the NMTC works in and for rural and urban communities. Contact Ayrianne Parks at 202-393-5225 or firstname.lastname@example.org with press inquiries.
Because of a dearth of available capital, residents of low-income communities often lack adequate access to state of the art healthcare facilities that more affluent communities take for granted. Income is strongly linked to health outcomes, so the need is greater in high-poverty neighborhoods. In high poverty urban areas, safety-net hospitals, which a significant level of care to low-income, uninsured, and vulnerable populations are stretched thin. And in small towns and rural farming communities, since 2010, 71 rural hospitals have closed and another 683 are at risk of closing — limiting access to care and further depressing local economies, according to the National Rural Health Association. One recent analysis showed that nearly two-thirds of the roughly 230 hospitals opened since 2000 are in wealthier, mostly suburban areas.
Recent funding for federally qualified health centers has made a difference, but one of the most important vehicles for financing healthcare facilities in high distress is the New Markets Tax Credit (NMTC). The program financed 432 projects supporting healthcare access between 2003 and 2013, delivering nearly $7 billion in capital to renovate, expand, or construct new hospitals, health clinics, and treatment clinics. One-hundred of those facilities were in rural areas, and 332 facilities were in high-need urban areas. One such project – the Grady Memorial Hospital in Atlanta, Georgia – will celebrate its expansion with a ribbon cutting ceremony on Wednesday, October 5, 2016. Grady was financed with NMTC allocation from Atlanta Emerging Markets, SunTrust Community Development Corporation, and the Community Hospitality Healthcare Services.
Below is a map of healthcare projects financed by the NMTC through 2013:
More NMTC healthcare stories:
Today, the US Census Bureau released their annual report on poverty and income. Economists predicted an increase of 1 to 2 percent in incomes in 2015, but the report showed a surprising 5.2 percent increase. A closer look at the data reveals a stark contrast between the economy in urban and rural communities.
Urban Areas on the Rise
Inside of metropolitan statistical areas (MSAs), median incomes grew by 6 percent. Much of that growth was confined to cities dwellers, whose incomes rose by 7.3 percent compared to suburban and exurban residents, whose incomes rose by a more modest 4 percent. This is the largest increase in median income since before the Great Recession.
The poverty rate declined in MSAs, dropping from 14.4 percent in 2014 to 13.0 in 2015. Inside MSA cities, poverty dropped sharply, from 18.9 percent in 2014 to 16.8 percent in 2015, and in the surrounding suburbs, it dropped from 11.8 percent in 2014 to 10.8 percent in 2015.
Rural Communities Continue to Stagnate
In 2015, rural* median incomes declined by 2 percent, which is just inside of the margin of error. Poverty remained stagnant, increasing a statistically insignificant 0.2 percent in 2015 and settling at 16.7 percent.
Regardless of whether the decline in rural economic conditions was statistically significant in 2015, it is clear that rural communities were left behind last year as our economy continued to grow modestly. Rural mortality and out-migration continues to hinder growth in small towns and farming communities. In fact, the number of rural residents living in poverty actually declined by about 10 percent, from 8.2 million in 2014 to 7.4 million in 2015, but because of population loss, this decline was not reflected in an accompanying decline in the overall poverty rate.
*Includes both micropolitan statistical areas and territory outside of metropolitan and micropolitan statistical areas
Crossposted at the National Rural Housing Coalition
The project created jobs and expanded access to fresh food in a Minneapolis food desert
U.S. Department of the Treasury Secretary Jack Lew traveled to Minneapolis on Monday to meet with community and business leaders to highlight initiatives aimed at supporting financial inclusion. On his tour, he visited Seward Community Cooperative Friendship Store, a fresh foods project financed in part by the New Markets Tax Credit (NMTC) and by a loan from MMCDC with federal Community Economic Development funds, a program that targets job creation for low income individuals. Also in attendance yesterday afternoon was Congressman Keith Ellison (D-MN), who is a longtime supporter of the credit and a cosponsor of bipartisan legislation to make the NMTC a permanent financial tool for economically distressed rural and urban communities.
“By working collaboratively with private and public workforce development programs, the co-op is creating new living-wage jobs with benefits for residents in the neighborhoods surrounding their locations,” said Kevin Shipley, president of Midwest Minnesota Community Development Corporation (MMCDC) and a board member of the NMTC Coalition. “However, the project greatly benefited from CED funding for job creation and would not have been possible without the NMTC.”
Faced with capacity crowds at its existing store, Seward turned to its longtime partners, MMCDC, for NMTC financing to expand to two new sites. MMCDC provided $8.48 million in affordable flexible capital. The Seward Co-Op, with a project cost of $15 million, was completed in 2015. The project included the financing of a new food production facility, along with a new grocery store in a Minneapolis neighborhood where fresh food options were scarce. The new store was built using environmentally friendly, sustainable products and services, and a focus on healthy and sustainable products carries through to the food choices on the shelves and at the restaurant. The company employs 350 people in all and the store’s wages start at $13 per hour.
Through 2015, MMCDC has been awarded $544 million in NMTC allocations for use in Minnesota, Wyoming, and the Dakotas. The Detroit Lakes based CDC has financed everything from health clinics to manufacturing facilities, using the NMTC to create thou
sands of jobs in areas underserved by conventional lenders.
“The NMTC nearly faced extinction last year, but thanks to strong support from leaders in both parties, along with Secretary Lew and the Administration, Congress extended the program last December through 2019,” said Bob Rapoza, spokesperson for the NMTC Coalition.
In April, Secretary Lew made the decision to combine the 2015 and 2016 rounds for the NMTC, making more credits available for businesses and communities desperately in need of capital to succeed.
“The Treasury will award a record $7 billion in NMTC allocation. Community development organizations like MMCDC will put that capital to work, creating well over 100,000 jobs in rural and urban communities,” adds Rapoza.