Azalea Plaza (2012)

South Gate, CA

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COMMUNITY IMPACT

Azalea Plaza was a major public priority for the city of South Gate and County of Los Angeles. After several failed attempts to redevelop the 33-acre project site, the city wanted a project to deliver a vibrant commercial center to the community. Residents desired retail goods, dining options, and civic spaces. The city wanted a project that could help finance adjacent infrastructure improvements, provide public spaces, and add sales tax revenues to its declining general fund. Both the city and county offered financial support to help build the project. But in the midst of structuring public financing, California dissolved its 60-year redevelopment program, withdrawing the most significant economic development finance source available to local jurisdictions.

Only months before a ground breaking, the project faced a financing gap in the millions. With the city and county now unable to provide gap financing, Genesis LA agreed to provide New Markets Tax Credit (‘NMTC’) financing. Genesis LA made a $2.6 million predevelopment loan to allow time to structure a $30 million NMTC financing. The NMTC subsidy essentially makes up for the subsidy that previously would have been provided under the redevelopment program. Another description: This retail center, located in South Gate, provides 315,000 s. F. of quality commercial goods and seNices to low-income households in Southeast Los Angeles County. The project also created 1,300 permanent jobs of which 83% are tocal hires. Public gathering space provides for year-round community events and celebrations. After California ended its redevelopment program in 2011. Genesis LA’s financing $erved as a uitiul source of capital to ensure the project moved forward.

Voices from the Community

The NMTC is what makes economic development viable in the distressed communities where we work. NMTC provides the equity that traditional investors cannot provide because of real or perceived risk. NMTC is the difference between a project being viable or not.

Thomas De Simone, President & CEO, Genesis LA CDE, Los Angeles, CA

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