While authorization for the New Markets Tax Credit (NMTC) expired on December 31, 2013, NMTC practitioners continue their efforts to provide low income communities and neighborhoods with access to flexible, patient capital, helping grow businesses and create jobs in places that need it the most. On Thursday, the impact of the Credit will be evident as Howard Park community residents and local leaders join together to celebrate the grand opening of ShopRite, a 67,000-square-foot grocery store in Baltimore, Maryland that received NMTC financing.
NMTC Coalition board member, The Reinvestment Fund (TRF), was a key player in bringing an end to the Howard Park neighborhood’s decade-long struggle for easier access to fresh produce and meats. TRF along with City First Bank and investor JP Morgan Chase provided $14.65 million in New Markets Tax Credit financing with additional project financing and support provided by Opportunity Finance Network (OFN). City First Bank, Chase and OFN are also Coalition members. This project will not only provide residents with access to fresh foods in a former food desert, it is also bringing 250 new jobs, a health center, and a revitalized commercial presence to the neighborhood.
“We are incredibly proud of the role we played to make this community’s big dream come true,” shared Don Hinkle-Brown, President and CEO of TRF.
A formal ribbon-cutting ceremony will take place at the store at 12:00 p.m. tomorrow. The Klein family, owners and operators of the ShopRite store, will be joined by Mayor Stephanie Rawlings-Blake and other community leaders, including Lieutenant Governor Anthony G. Brown and City Council President Jack Young who are scheduled to join in the opening event.
The ShopRite is just one example of the impact the NMTC is having in communities around the country. On June 10th, the NMTC Coalition released the tenth edition of its NMTC Progress Report, which includes 2013 survey data from 64 CDEs. Respondents reported $4.9 billion in total project financing, helping finance 280 businesses and create 54,643 jobs in economically distressed communities. While all of these investments were made in qualified low income communities, the Report notes that 80 percent of these investments were made in severely distressed communities, 56 percent of which had unemployment rates of at least 1.5 times the national average.
Since the first allocation of New Markets Tax Credits in 2003, $31 billion of NMTC investments have been made in economically distressed urban and rural community across the country. These investments leverage more than $30 billion from other sources. The result: creation of over 550,000 jobs, improved commercial and industrial facilities – such as the supermarket in Baltimore—better schools, improved healthcare facilities and revitalization of communities often left behind.
The future of NMTC is contingent upon congressional action, but there are just a few days remaining before Congress leaves for a five-week recess and the NMTC is not expected to be addressed before their departure. With the last awards authorized by Congress awarded in June, this flexible, financial tool is running out of time.
Legislation that would provide a permanent authorization for the NMTC is pending in both the House and Senate. The New Markets Tax Credit Extension Act of 2014 (H.R. 4365) and the New Markets Tax Credit Extension Act of 2013 (S. 1133), have garnered broad support from both Democrats and Republicans—a positive indication that there is support for renewing the NMTC this fall.
Great projects like the ShopRite demonstrate the effectiveness and impact of NMTC. It is now up to Congress to take action to ensure that this important revitalization tool is extended. With Members of Congress in their home states and districts, we ask you to urge your Members of Congress to visit a project and see the NMTC in action at home.