U.S. Department of the Treasury Awards SLDC $25 Million in New Markets Tax Credits to Benefit Local Development Projects
St. Louis, Mo. (September 27, 2024) – In the latest round of allocations announced by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund), St. Louis Development Corporation (SLDC) was selected to receive $25 million in New Markets Tax Credits (NMTC) to further economic justice and assist local development projects. Since 2004, SLDC has been awarded 13 allocations totaling $568 million in tax credit authority. NMTC spur investment and economic growth in low-income urban and rural communities nationwide.
“This $25 million award will create opportunities and benefit development projects across all areas of St. Louis,” said Neal Richardson, President & CEO of SLDC. “We can leverage New Markets Tax Credits to help attract more private investment 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.”
The NMTC allocation process will begin when SLDC issues a Request for Proposals (RFP) to attract quality projects with the most impactful use of the tax credits. We expect this will happen in early 2025. An advisory group will review the applicants and make recommendations on which projects should receive NMTC, with final approval coming from the SLDC Board of Directors.
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 allocations to finance 100 real estate developments and businesses, both for-profit and not-for-profit, resulting in the creation and retention of approximately 6,875 jobs in the City of St. Louis.
Since its last award in 2022, SLDC has closed on financing for $49 million in allocations. With its 2022 allocation, SLDC established the Housing Access and Neighborhood Stabilization Revolving Loan Fund, which leverages American Rescue Plan Act (ARPA) capital and NMTCs to finance the creation of for-sale units targeting households earning less than 80 percent of the Area Median Income (AMI). SLDC has also supported several prominent projects with recent NMTC allocations including the expansion of the Urban League’s headquarters, St. Louis Symphony’s Education and Learning Center and construction of a new Ronald McDonald House.
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 20 allocation rounds and has made 1,667 awards totaling $81 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