News
$40 Million tax credit allocation awarded to Montana Community Development Corporation
U.S. Treasury Department showcases Montana recipient of $40 million in New Markets
Tax Credits
The U.S. Treasury Department awarded $40 million in New
Markets Tax Credits to the Montana Community Development Corporation http://www.mtcdc.org/ (MCDC) of
Missoula at a ceremony today in Washington, D.C. MCDC will use the credits to
provide innovative business and real estate financing in low-income census tracts
throughout the state.
The award is the first for a Montana organization, and the only Montana award
out of $3.5 billion awarded on Monday. The Treasury Department highlighted this
milestone by designating MCDC to attend the ceremony as the sole representative of all
U.S. rural organizations receiving awards this year.
“We are thrilled to bring this large allocation of tax credits to Montana. And we
are honored to be chosen to represent rural organizations. The Montana projects that use
this tax credit program are great examples that local businesses can boost opportunity for
low income people and places,” said Rosalie Sheehy Cates, executive director at MCDC.
Cates accepted the award from Donna Gambrell, head of the Treasury
Department’s Community Development Financial Institution (CDFI) Division and newly
appointed to the Treasury’s Financial Stability Unit. Heidi DeArment, MCDC
Operations Manger, also attended the ceremony.
The allocation allows MCDC to sell federal tax credits as part of financing
provided to eligible projects in low income census tracts. The proceeds bring down the
total financing costs. “Tax credits are often the final puzzle piece that allows the project
to go forward,” said Steve Grover, business development manager at MCDC. “They
bring new private money in to make the cash flow work. That attracts investment into
projects that might be a little harder to do because of where they are located, or because
of the extraordinary social or environmental impact they are attempting to provide.”
“Montana will basically be doing $40 million in new projects that could not be
done last year,” Grover added. “And these projects are for the people in Montana who
need it most, especially with recent financial turmoil.”
The NMTC program was created in 2000 and has been utilized around the
country to bring economic vitality to low-income and economically distressed
communities. To date, the US Treasury Department has made 294 awards totaling $16
billion in allocation authority.
The tax credit program has been hugely successful at spurring economic
development in other low-income communities and is expected to continue to play a
significant role in bringing economic development to distressed areas nationwide.
Cates said that MCDC’s experience in putting together financing for rural
enterprise projects, such as a small-log saw mill in Hall, Montana and an innovative
farming project in Corvallis, Montana made it a serious contender to receive a large
chunk of the tax credit allocation. MCDC’s ability to identify and encourage rural
business projects, along with other economic development projects in low-income places,
gets the federal tax credit money out to the places and people who this program is
designed to help.
For information related to eligible New Markets deals contact Steve Grover (406)
728 9234 x 208 or [email protected]
New Markets Tax Credit Background
The tax credits can be used towards a variety of community revitalization efforts
in designated low income areas. Financing can be applied towards construction costs,
working capital, machinery and equipment, fixed assets and certain development of
commercial, industrial and retail real estate.
The NMTC program works by allowing equity investors in local business
development projects to receive credits against Federal income taxes for their
investments into qualified community development projects. Entities such as MCDC
help organize and manage the financing aspects of the project by matching the equity
investors with local banks to provide additional project funds. While investors receive a
39% tax credit on their funds, realized over seven years, the overall impact to the
financing package is that the project is infused with investment capital that would not be
in play without the tax credits.
The tax credits are attractive to investors looking for new business opportunities
with enhanced returns and are attractive to debt providers, such as local banks, which
earn traditional returns while broadening their market. The end result for communities is
infusion of capital for worthwhile projects that create economic opportunities for people
and places that need it most.
Contact:
Dave Glaser, Business Consulting Manager
MCDC (Montana Community Development Corporation)
Phone: 406-728-9234 #211
Fax: 406-542-6671
Heidi DeArment
Operations Manager, MCDC
c 406.544.9755
ph 406.728.9234 x 213
***
DEPUTY SECRETARY KIMMITT TO ANNOUNCE $3.5 BILLION IN TAX CREDITS FOR LOW-INCOME COMMUNITY INVESTMENT
U.S. Treasury Deputy Secretary Robert M. Kimmitt and Treasury’s Community Development Financial Institutions (CDFI) Fund Director Donna J. Gambrell will award $3.5 billion in tax credits to organizations investing in rural and urban low-income communities across the United States. The awards are being made under the 2008 round of the New Markets Tax Credit Program.
Deputy Secretary Kimmitt and CDFI Fund Director Gambrell will highlight the work of four local Washington, DC organizations receiving New Markets Tax Credits and on how allocatees are serving rural low-income communities.
The following event is open to credentialed media:
WHO Deputy Treasury Secretary Robert M. Kimmitt CDFI Fund Director Donna J. Gambrell
WHAT National New Markets Tax Credit Program Award Announcement
WHEN Monday, October 20, 11:00 AM (EDT)
WHERE Cash Room
U.S. Department of the Treasury
Washington, DC
About the New Markets Tax Credit Program
The NMTC Program, established by Congress in December 2000, provides individual and corporate taxpayers with a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). Substantially all of the taxpayer’s investment must be used by the CDE to make qualified investments supporting certain business activities in low-income communities. More information on the NMTC program can be found at http://www.cdfifund.gov.
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