New Markets Tax Credit Program and Innovative Public-Private Partnership Help to Transform San Diego Community

Washington, DC -- The Director of the U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund Donna J. Gambrell participated today in the ribbon-cutting and dedication of the Joe & Vi Jacobs Center in the Diamond neighborhood of San Diego. The Center is a three-story, 78,000-square foot building providing a state-of-the-arts conference and event venue, training to build the capacity of individuals and local micro- and small businesses, office space for neighborhood organizations and the new headquarters of the Jacobs Center for Neighborhood Innovation. Fifteen million of the $23.5 million required to build the Joe & Vi Jacobs Center was raised through the New Markets Tax Credit (NMTC) Program, which is administered by the CDFI Fund.

"I see concrete evidence here today that government programs such as the New Markets Tax Credit Program when utilized by innovative public-private partnerships, can dramatically improve the quality of life for residents in underserved communities," said Director Gambrell. "Led by Clearinghouse CDFI and the Jacobs Center for Neighborhood Innovation, the residents here have worked together to plan, design, build and take actual ownership in this innovative partnership."

The culturally diverse Diamond neighborhoods of southeastern San Diego had previously endured decades of under-investment. The NMTC Program has been a powerful tool for change. The cornerstone of change has been the Market Creek Plaza located on what was the site of a 20-acre abandoned aerospace factory. Fifteen million in capital was also raised through the NMTC Program for the Plaza. In 2007, the Plaza recaptured $40 million of the $60 million in economic leakage from the community. The new Joe & Vi Jacobs Center now occupies the second half of the site.

Today's dedication of the Joe & Vi Jacobs Center marks the next milestone in the development of the resident-planned vision for change in the community The Village at Market Creek. When completed, the Village at Market Creek will bring a total of 350,000 square feet in new commercial space, 800 new jobs and 800 new homes to the community. The new Center will also become the heart of the Village where organizations and individuals across the nation can come to learn and share in the areas of community building, community development, asset building, and more.

About the NMTC Program

The NMTC Program, established by Congress in December of 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities. Successful applicants are selected only after a competitive application and rigorous review process that is administered by the CDFI Fund.

Through the first five rounds of the NMTC Program, the CDFI Fund made 294 awards totaling $16 billion in tax credit allocation authority. The CDFI Fund anticipates awarding another $3.5 billion of allocation authority to CDEs in the fall of 2008. The NMTC Program is currently set to expire in 2008, but President Bush has asked Congress to extend the Program with a $3.5 billion authorization for 2009.

About the CDFI Fund

The CDFI Fund was created for the purpose of promoting economic and community development through investment in and assistance to community development financial institutions (CDFIs). The CDFI Fund's role in promoting community and economic development was expanded in FY 2001 when the Secretary of the Treasury delegated to the CDFI Fund the responsibility of administering the NMTC Program.

Since its creation in 1994, the CDFI Fund has awarded $864 million to CDFIs, community development organizations and financial institutions through CDFI Program, the Bank Enterprise Award (BEA) Program, and the Native Initiatives.