Eight-five organizations have been selected to receive $3.5 billion in New Markets Tax Credit (NMTC) allocation authority, announced the Treasury Department.
The community development entities (CDEs) receiving awards were selected from a pool of 282 applicants requesting $21.9 billion in NMTC authority.
"New Markets helps us to ensure that every person in America has a place to call home in a vibrant community filled with an opportunity for a good life," said Charlie Werhane, president and CEO of Enterprise Community Investment.
He joined Treasury officials and Sen. Charles Schumer (D-N.Y.) on a call with reporters to announce the latest round of awards. Enterprise received a $50 million allocation.
Werhane cited Miller's Court as an example of the program's success. The mixed-use development is helping to provide housing for young teachers in Baltimore. It was financed with the help of about $19 million in NMTCs.
"Miller's Court has been a catalyst for additional development in this disinvested section of Baltimore," said Werhane, adding that Enterprise is working with Seawall Development Co. to replicate the development across the country.
A number of familiar companies or their entities were selected to receive NMTC allocations, including Baker Tilly, Community Affordable Housing Equity Corp., Citibank, Clearinghouse CDFI, The Community Builders, JPMorgan Chase, Low Income Investment Fund, Massachusetts Housing Investment Corp., PNC, SunTrust, and U.S. Bank.
Established by Congress in 2000, the NMTC program helps economically distressed communities attract private investment capital by providing investors with a credit to use against their federal income taxes.
The Treasury's Community Development Financial Institutions Fund allocates NMTC authority to CDEs, which can then offer the credits to investors in exchange for equity. With the capital investments raised, the CDEs can then make loans and investments to businesses in the distressed areas. Investors can claim a tax credit worth 39 percent of their original CDE equity stake, which is claimed over seven years.
Officials said that for every dollar invested by the federal government, the NMTC program generates more than $8 in private investment.
The 2012 round awards are the 10th for the program. President Obama's fiscal 2014 budget plan calls for a permanent extension of the NMTC.
"This year's [NMTC] awards usher in the winds of revitalization in the urban and rural communities that are most urgently in need of greater economic development," said Schumer.
The program has transformed distressed communities in ways that have exceeded expectations, he said.