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Public Statements

New Markets Tax Credit

Floor Speech

By:
Date:
Location: Washington, DC

Mr. NEAL. I rise today to speak about the New Markets Tax Credit program and the positive impact it has had on western Massachusetts.

I've been a leader of New Markets since its enactment in 2000 because it's a cost-effective way to create jobs and drive investment in low-income communities. Today, I want to highlight a few New Market Tax Credit initiatives in my State.

New Markets Tax Credit is designed to stimulate investment and economic growth in areas that are traditionally overlooked by conventional capital markets. This program attracts capital to low-income communities by providing private investors with a 39 percent Federal tax credit for investments made in businesses or economic developments located in those areas.

In 2010, New Markets generated $9.5 billion in capital for projects and businesses in low-income communities. This capital resulted in the development of 15 million square feet of manufacturing, retail, and community-related space throughout the country.

Last year, New Markets Tax Credits investments resulted in the creation or retention of 70,000 jobs, including 38,000 construction jobs.

Unfortunately, New Markets is a temporary program that expired on December 31. I am now and have been the lead Democratic sponsor of this legislation to extend the program for a predictable 5 years. I've now been calling on our colleagues to extend this initiative. So let me share with you a few successes from back home and explain why I think New Markets works so well.

Hot Mama's Foods in Springfield, Massachusetts, my hometown--it's a great success story. The company was created in the 1980s, and they manufacture and package fresh and frozen gourmet salsa and other spreads that are all natural and, indeed, organic. Hot Mama's was originally located in Northampton, but thanks to New Markets, they were able to purchase a larger USDA-certified food production facility on Avocado Street in Springfield. It has added 10 new jobs and retained 50 jobs in the current workforce.

Another success story is the River Valley Market in Northampton, Massachusetts, which moved into a former granite quarry. No one wanted this space because it was prohibitively expensive to renovate; but through New Markets and other financial support, they opened a food cooperative that features local farmers and employs neighborhood residents.

Finally, let me highlight a more recent New Markets project that's currently under construction, the Massachusetts Green High Performance Computing Center in Holyoke, Massachusetts. Holyoke is a city in western Massachusetts with a population of about 40,000 people. From the late 19th century until the mid-20th century, Holyoke was known as the world's biggest paper manufacturer.

The High Performance Computing Center is a $168 million technology hub that is being built at the former Mastex Industries site on Bigelow Street in the heart of Holyoke. Construction of the center began in the fall of 2010; and the two-story, 90,000 square foot complex is expected to be completed next year.

This facility will be New England's first high performance computing center. It will feature computers with high speed and the capacity to process extraordinary amounts of data. When it's complete, it will be among the 500 most powerful computer centers in the world.

The Holyoke Center is a partnership between local universities--University of Massachusetts, Harvard, MIT, Boston University, Northeastern University--and two private sector companies: the EMC Corporation, based in Hopkinton, and Cisco Systems.

The center also received a $14.5 million New Market Tax Credit allocation, which is the critical component to financing this important project.

I believe the Holyoke Center will be a catalyst for economic development in Holyoke and in western Massachusetts. It will employ 13 permanent jobs and 130 research positions at various universities. It is expected to create 600 construction jobs.

Without New Markets and the leadership that I've tried to offer in this program, Hot Mama's Foods, River Valley Market, and the Green High Performance Computing Center probably would not have been possible. New Markets is a good example of how public and private investment can be used to spur community and economic revitalization.

I hope that we will stop wasting time, and with the other tax extenders that have to get taken care of, we will include an extension of the New Markets Tax Credit program as quickly as possible.


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