June 5, 2014
Birmingham, AL – The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) today announced $3.5 billion in New Markets Tax Credit awards aimed at revitalizing low-income communities and increasing economic opportunity nationwide. A total of 87 organizations (Allocatees) across the country will receive tax credit allocation authority under the calendar year 2013 round of the New Markets Tax Credit Program.
“The New Markets Tax Credit Program creates jobs and critical investments in low-income neighborhoods and rural communities across the nation,” said Amias Gerety, Acting Assistant Secretary for Financial Institutions. “Often the New Markets Tax Credit is the most critical piece of the puzzle when trying to finance important economic development projects across the country. Its ability to attract private-sector capital into some of the most economically distressed and underserved communities is a hallmark of this important economic development program.”
The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in 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. The CDEs in turn use the capital raised to make investments in low-income communities.
“Over $31.1 billion of New Markets Tax Credit transactions have been reported from the program’s inception through the end of fiscal year 2012, and over 74 percent of these were made in severely distressed communities, surpassing even the program’s requirements,” said Dennis Nolan, Acting Director of the Community Development Financial Institutions Fund. “The New Markets Tax Credit Program is clearly targeting economic development in communities that critically need financing to help create new businesses, affordable housing and jobs.”
“We are excited about the new wave of community revitalization and economic development that will be created from the investment of $3.5 Billion through this program in the coming months. I am disappointed that there were yet again no Alabama-based allocatees, continuing the shutout that has continued since the 2003 awards. However, I am increasingly optimistic that qualifying Alabama businesses will receive a greater share of NMTC investment in this round than in prior years,” said Brandon Hill, President of Birmingham-based economic development consultancy Fusion Advisory Services. “Community Development Entities from outside our state have expressed to us over the last year a great interest in emphasizing investment in quality Alabama projects, and our professionals have worked hard during that time to identify and position projects for today’s announcement. We will continue to work with our existing clients to secure and close on NMTC commitments.” For organizations that believe they may qualify but have not yet had their project evaluated, it is not too late. “We welcome the opportunity to work with businesses in the coming months who would like to pursue NMTC allocations for their projects, but have not yet done so. The line for this limited pool of investment is certainly forming but, for the moment, Alabama projects should still have an edge nationally.”
About the New Markets Tax Credit Program
The New Markets Tax Credit Program was established by Congress in December 2000 to help economically distressed communities attract private investment capital by providing investors with a Federal tax credit. Investments made through the New Markets Tax Credit Program are used to finance businesses and real estate projects to breathe new life into neglected, underserved low-income communities. Since inception, New Markets Tax Credit Program investments have created an estimated 561,873 new jobs and supported the construction of 22.0 million feet of manufacturing space, 71.8 million square feet of office space, and 55.2 million square feet of retail space. As these communities develop, they become more attractive to investors, creating a ripple effect that spurs more investment.
About Fusion Advisory Services
Fusion Advisory Services, LLC, is a boutique consultancy devoted to economic development projects in the Southeast, primarily in the State of Alabama. We seek to further community revitalization, entrepreneurial opportunity, and historic preservation, through creative utilization of tax credits and other financial incentives. Our services foster mutually beneficial relationships among stakeholders including financial institutions, developers, non-profits, and investors, to finance a variety of commercial projects located in historic and/or low-income Alabama communities.
We specialize in the identification, structuring, and securing capital and creative public/private financing for projects with high community impact and multiple layers of financing. Primarily, these involve New Markets, Historic, and Renewable Energy Tax Credits, but also may include other financing sources such as Tax Increment Financing, HUD financing, Brownfield financing, solar and energy efficiency incentives, public grants, loans, and incentives, conventional bank financing, and private equity.
We have developed a specialized expertise in the nuances of these programs and we have a network of relationships with CDEs, historic preservation experts, and industry professionals nationally to assist in securing this capital.
Alabama has been historically overlooked and under-represented in the NMTC program, and most NMTC deals in Alabama were transacted by companies with little connection to the Alabama community. Fusion was founded to be an Alabama-based firm dedicated primarily to servicing the Alabama market, and increasing knowledge of tax credit programs in the region. As such, our in-state network is robust, and we work closely with local industry and political leaders as well as State agencies including the Department of Commerce, Department of Revenue, Department of Economic and Community Affairs, Alabama Historical Commission, and Alabama Division of the Tennessee Valley Authority, to name just a few.
We believe the combination of high-caliber expertise in tax credit programs and other incentives provide a valuable opportunity to raise additional capital and lower the cost of funding. We also believe that there is a high value to working with neighbors who have a deep understanding of the local market – beyond what “the numbers” might say. With Fusion you don’t have to choose: because our professionals work in the area we call home, we always look below the surface, and have a vested interest in the success of your project.
For more information about Fusion’s work, please visit the Fusion Advisory Services website at www.ForgedByFusion.com, call (205) 202-1570, or email Brandon Hill at email@example.com.