New Markets Tax Credit Coalition Blog
From the Maine Public Broadcasting Network:
Two years ago, a medical products company from Europe called Molnlycke Healthcare chose to locate its U.S. manufacturing headquarters in Brunswick, Maine, on the site of the former Brunswick Naval Air Station. Molnlycke is one of world’s leading makers of advanced wound-care products. It’s based Sweden but has a global presence, employing about 7,000 people with about $1.5 billion in annual sales. The company broke ground on the Brunswick facility last month, and plans to begin production this fall. Before that can happen, though, there’s some hiring to be done.
But why Brunswick, a former mill town of 15,000 inhabitants, more than two hours north of Boston? One reason is that it already has a presence in mid-coast Maine: The foam used in Molnlycke’s wound-care pads is made in Wiscasset, at a plant it purchased two years ago.
But another factor – and one which was instrumental in luring it to Brunswick Landing, as the redeveloped former naval air station is now called – is a financing package known as the New Market Tax Credit.
“Molnlycke is an excellent example of how New Markets works,” says Charlie Spies, chief executive of CEI Capital Management, a division of Coastal Enterprises Inc., a Maine-based non-profit that works nationally to spur economic development in deprived areas.
Because of the departure of the Navy two years ago, and the effect this had on the local economy, Brunswick Landing qualifies for New Market Tax Credits, a federal program administered by CEI Capital Management.
“The tax credits are used by corporations to reduce the overall cost of their investment in the project,” Spies says. “And by doing that, ultimately the lease rates here and the cost of the building were lower than they would have been otherwise, and that allowed this to be a competitive site.”
Today the Treasury Department’s blog, “Treasury Notes”, chronicles some of the positive press received by the NMTC in newspapers around the country:
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.
Mark your calendars!
On Wednesday, June 5th, 2013 at 8:45 AM, the New Markets Tax Credit Coalition will sponsor a breakfast briefing on Capitol Hill in 121 Cannon House Office Building.
The briefing will coincide with the release of the 2013 NMTC Progress Report. All are invited. Please extend an invitation to Members of Congress and their staff.
CDFI Fund Announces Tenth Round of NMTC Allocation Awards
Today the CDFI Fund announced the Tenth Round of NMTC Allocation Awards totaling $3.5 billion in allocation.
VIDEO: Donna Gambrell announces awards:
On Friday, April 12, 2013, the New Markets Tax Credit Coalition responded to the Ways and Means Committee Working Groups’ call for comments on tax reform. The Coalition’s briefing paper was addressed the following working groups:
- Debt, Equity, and Capital
- Real Estate
- Financial Services
Over the next several months, the Senate Finance Committee will convene weekly to discuss a series of topics and collect feedback from members on a wide range of options for taking on tax reform. These meetings will be Member-only and are organized by policy area. Below is the tentative schedule (subject to change):
- April 11: Small business, corporate investment and innovation;
- April 18: Families, education and opportunity;
- April 25: Infrastructure, energy, and natural resources;
- May 9: Types of income, investment, and tax structures;
- May 16: Economic security, health, retirement, and insurance;
- May 23: International competitiveness;
- June 6: Economic and community development;
- June 13: Tax exempt organizations and charitable giving; and
- June 20: Non-income tax issues