February 23, 2012
New Orleans, LA – Emphasizing the Obama Administration’s focus on economic recovery in distressed areas, U.S. Department of the Treasury’s Deputy Secretary Neal Wolin, joined by U.S. Senator Mary Landrieu, U.S. Representative Cedric Richmond, and Community Development Financial Institutions Fund (CDFI Fund) Director Donna J. Gambrell, today announced $3.6 billion in New Markets Tax Credit (NMTC) awards nationwide. Speaking on the site of a redeveloped military base, Deputy Secretary Wolin announced the selection of 70 organizations across the country to receive NMTC allocation awards under the most recent program round.
“For so many vital economic development projects across the country, the New Markets Tax Credit has been a critically important piece of the puzzle,” said Deputy Secretary Wolin. “This targeted tax credit has a strong record of spurring economic growth in low-income and distressed communities across our country.”
Treasury’s announcement was made today at Federal City Town Center, a retail complex that is the heart of a 155-acre redevelopment of the former Naval Support Activity New Orleans military base. NMTCs were part of a public-private partnership that allowed the military to transform part of the base into a new walkable community accessible to the surrounding neighborhood.
“Our presence here today illustrates just what can be accomplished when affordable financing is available for projects that revitalize struggling communities,” said Director Gambrell. “We frequently associate the New Markets Tax Credit with new builds, but just as frequently the tax credit allows for a new use for an existing property. By opening the grounds of Federal City to the community, new life has been breathed into this area.”
The NMTC, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in investment vehicles known as Community Development Entities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. Community Development Entities must apply to the CDFI Fund to compete for this allocation authority. The 70 organizations receiving awards were selected from a pool of 314 applicants that requested over $26.7 billion. They are headquartered in 29 different states and the District of Columbia; but have identified principal service areas that will cover nearly every state in the country, as well the District of Columbia.
Locally, five organizations in Louisiana are receiving awards under the 2011 round of the NMTC Program for a total tax credit allocation authority of $295 million. The New Markets Tax Credit has been instrumental in aiding the rebuild and redevelopment of the New Orleans area after the damage caused by Hurricanes Katrina and Rita.
“These tax credits will significantly impact Louisiana neighborhoods that are in desperate need of investment,” Senator Landrieu said. “The credits have a proven record of helping to create jobs and spur economic growth by empowering community development groups to support essential projects.”
“I have been a strong supporter of the New Markets Tax Credit initiative since my time in the state legislature,” Representative Richmond said. “The economic development benefits of NMTC are clear, with almost $1 billion in tax credit investments being made in New Orleans since 2003. These critical investments have helped create new businesses and jobs, and spurred economic activity to help New Orleans weather the economic storms of recent years.”
Earlier in the day, Deputy Secretary Wolin and Director Gambrell toured a new community facility that had been built with the assistance of NMTCs; a group of low-cost, environmentally friendly homes that have revitalized part of the devastated Ninth Ward of the city; and a support center that provides assistance to fishermen whose livelihoods were impacted after the Gulf oil spill. New Orleans is not the only part of Louisiana that has benefited from the tax credit—from 2003 through 2010, the most recent calendar year that data is available, almost $1.6 billion in New Markets Tax Credits were invested in 160 projects in communities across Louisiana by both in-state and out-of-state Community Development Entities.
A complete list of the 70 organizations selected and additional information on the NMTC Program can be found on the CDFI Fund’s web site at: http://www.cdfifund.gov.