Treasury Secretary Geithner and Congressman Clay Announce New Market Tax Credits
to Rebuild Neighborhoods and Create Jobs
City of St. Louis, Habitat for Humanity International,
US Bank and McCormack-Baron-Salazar to be Awarded $250 Million in Tax Credits
As part of a $5 billion national investment to grow jobs and revive depressed neighborhoods, Secretary of the Treasury Tim Geithner and Congressman Wm. Lacy Clay (D) Missouri, have announced today that four St. Louis organizations are among the 90 recipients nation-wide who have been selected to receive New Market Tax Credit funding. In St. Louis, the St. Louis Development Corporation, Habitat for Humanity, McCormack-Baron-Salazar and US Bank will receive $250 million.
"This is tremendous news for the City of St. Louis, Habitat for Humanity, McCormack-Baron-Salazar and US Bank, said the Congressman. "The New Market Tax credits, which are partially funded by the Recovery Act, are a key tool to help cities, and those groups and entities who build up our cities, to encourage private sector investment that creates jobs, transforms distressed neighborhoods and makes financing available for difficult projects in urban areas. I want to personally thank President Obama and Secretary Geithner for being so responsive to my efforts to win this funding for the St. Louis region, and I want to congratulate all the recipients."
Congressman Clay is proud to announce these awardees for the New Market Tax Credit program in the St. Louis region:
St. Louis Development Corporation (City of St. Louis)
SLDC will offer a variety of financial products with flexible structuring alternatives to meet the unique needs of each project. For non-real estate businesses, SLDC will offer equity investments and below-market interest rate loans ranging from $500,000 to $15 million. For real estate businesses, SLDC will offer equity or equity equivalent investments ranging from $500,000 to $5 million, and loans ranging from $500,000 to $15 million, including below-market interest rate loans and leveraged loans.
Habitat for Humanity International
Habitat for Humanity International will use its NMTC allocation to provide favorable loan rates and terms to Habitat for Humanity International, Inc. organizations (Habitats) nationwide, including St. Louis City and County, to develop for-sale housing for low-income homeowners, built by the homeowners with assistance from volunteers. These local Habitats will provide no-interest mortgages to the homeowners. The NMTC loan product is the most flexible and low-cost financing that HFHI can make available to the local Habitats. With NMTC funding, the Habitats will be able to significantly increase the number of homes they build -- enabling the Habitats to create sustainable neighborhoods in areas suffering from disinvestment and blight.
US Bank Community Development Entity
USBCDE will provide equity, equity-like debt and favorable loan rates and terms for real estate development and operating businesses. The target borrower will be a qualified business who will develop or rehabilitate commercial real estate as rental or owner occupied property. USBCDE offers complete financing packages from construction to permanent financing.
McCormack-Baron-Salazar Urban Initiatives
MBS Urban Initiatives CDE will use its NMTC allocation to invest in low-income communities across the country, with a focus on developments that can accelerate revitalization by bringing jobs and economic activity back to these neighborhoods. MBS-CDE will offer a combination of below-market debt and patient equity investments to developments which can demonstrate significant impact, both in their own right and as catalysts for others to follow. MBS-CDE will invest in commercial, mixed-use, community service and for-sale developments that enhance new housing efforts taking place in distressed communities.
The NMTC 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 investment vehicles known as Community Development Entities (CDEs). The investor receives a credit totaling 39 percent of the cost of the investment. CDEs must apply to the Treasury's Community Development Financial Institutions (CDFI) Fund, which administers the NMTC program, to compete for this allocation authority.