The ºüÀêÊÓƵ Development Corp. is getting a $75 million allocation of federal New Markets Tax Credits from the Treasury Department.
Also among recipients in the latest round of allocations, announced Thursday, are MBS Urban Initiatives CDE, part of ºüÀêÊÓƵ-based McCormack Baron Salazar, and Advantage Capital Community Development Fund.
Advantage Capital is based in New Orleans but has a big office in Clayton. The Treasury Department awarded Advantage $80 million in New Markets. MBS Urban Initiative got a $75 million allocation.
New Markets credits are used as an incentive to draw private investment into businesses and real estate projects in qualifying census tracts that cover much of ºüÀêÊÓƵ and part of ºüÀêÊÓƵ County.
The credits awarded to local agencies don’t have to be invested in ºüÀêÊÓƵ although SLDC typically awards all its allocation to projects in the city. New Markets are a popular form of gap financing for real estate projects and of capital for growing small businesses.
People are also reading…
New Markets tax credits typically raise 39 cents on the dollar in equity and that investment is spread over seven years.
In all, the Treasury Department awarded $7 billion in New Markets tax credits to 120 organizations in 36 states, the District of Columbia and Puerto Rico. It is the largest award round since the program began in 2001, the department said.
The total amount awarded so far through the New Markets program is $50.5 billion. Historically, New Markets awards have generated $8 of private investment for every dollar invested by the government, the department said.
Getting New Markets is competitive. The department said the 120 organizations that got credits in the latest funding round came from a pool of 238 applicants that requested about $17.6 billion in allocation authority.
One of the entities that missed out was the ºüÀêÊÓƵ Economic Development Partnership. The former ºüÀêÊÓƵ County economic development arm that now works more closely with the SLDC had administered New Markets credits through the Heartland Regional Investment Fund.
It did not include an allocation of the credits in its budget for fiscal year 2017, with budget documents saying the organization was hopeful but calling it a “highly competitive process.â€