SLDC Secures $50 Million in Federal New Markets Tax Credits
Latest Round of Allocations Will Further Economic Justice, Benefit Local Development Projects
St. Louis, Mo. (October 31, 2022) – In the latest round of allocations announced by the U.S. Treasury Departmenton Friday, St. Louis Development Corporation (SLDC) was selected to receive $50 million in federal New Markets Tax Credits (NMTC) to assist local development projects. Since 2004, SLDC has been awarded 12 allocations totaling an incredible $543 million in tax credit authority.
“This is amazing news for SLDC, and another signal that our commitment to Economic Justice in the City of St. Louis is the right strategy for long-term success,” said Neal Richardson, President & CEO of SLDC. “As we seek to build a vibrant, just and growing economy where all people can thrive, this round of New Markets Tax Credits will help us attract more private investment that is desperately needed in economically distressed areas of the City. By closing project financing gaps, the NMTC Program enables investors to make larger investments than would otherwise be possible.”
As the economic development organization serving the City of St. Louis, Mo., SLDC administers the NMTC program, which has been a tremendous tool for the City. Over the life of the program, SLDC has used its allocation to finance 98 real estate developments and businesses, both for-profit and not-for-profit, resulting in the creation and retention of approximately 6,800 jobs in the City of St. Louis.
In 2021, SLDC closed on financing for five transactions totaling $32 million in allocation. One of the projects SLDC supported with an $8 million NMTC allocation was Doorways, a non-profit that provides housing and supportive services to St. Louisans affected by HIV/AIDS. The new Doorways campus opened in the JeffVanderLou neighborhood in North St. Louis earlier this month.
This year, SLDC intends to use previous allocations to establish the Housing Access and Neighborhood Stabilization Revolving Loan Fund, which leverages American Rescue Plan Act (ARPA) capital and New MarketsTax Credits to finance the creation of for-sale units targeting households earning less than 80 percent of Area Median Income (AMI).
“This $50 million award will create opportunities and benefit development projects across all areas of St. Louis,” Richardson added. “The allocation process for this round will begin when SLDC issues a Request for Proposals (RFP) to attract quality projects with the most impactful use of the tax credits. An advisory group will review the applicants and make recommendations on which projects should receive the tax credits, with final approval coming from the SLDC Board of Directors. We expect this will happen in early 2023.”
SLDC is one of 107 allocates selected from 35 states and the District of Columbia. In addition to SLDC, three other allocatees were also chosen from the St. Louis region: Heartland Regional Investment Fund, LLC, MBS Urban Initiatives CDE, LLC and USBCDE, LLC.
About the New Markets Tax Credit Program
The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). CDEs that receive the tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39% 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. CDEs must apply annually to the CDFI Fund to compete for New Markets Tax Credit Program allocation authority. Since the inception of the NMTC Program, the CDFI Fund has completed 18 allocation rounds and has made 1,461 awards totaling $71 billion in tax allocation authority. This includes $3 billion in Recovery Act Awards and $1 billion of special allocation authority used for the recovery and redevelopment of the Gulf Opportunity Zone.
To learn more about the New Markets Tax Credit Program, please visit www.cdfifund.gov/nmtc
About the CDFI Fund
Since its creation in 1994, the CDFI Fund has awarded more than $5.5 billion to CDFIs, community development organizations, and financial institutions through: the Bank Enterprise Award Program; the Capital Magnet Fund; the CDFI Rapid Response Program; the Community Development Financial Institutions Program, including the Healthy Food Financing Initiative; the Economic Mobility Corps; the Financial Education and Counseling Pilot Program; the Native American CDFI Assistance Program; and the Small Dollar Loan Program. In addition, the CDFI Fund has allocated more than $71 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and guaranteed bonds for over $2.1 billion through the CDFI Bond Guarantee Program.
To learn more about the CDFI Fund and its programs, please visit the CDFI Fund’s website at www.cdfifund.gov.
About St. Louis Development Corporation (SLDC)
St. Louis Development Corporation (SLDC) is the independent economic development agency serving the City of St. Louis, Missouri. It is an action-oriented organization that exists to empower, develop and transform St. Louis through a vibrant, just and growing economy where all people can thrive. Learn more at developstlouis.org.