CDFI Fund Announces $5 Billion in New Markets Tax Credits
The St. Louis Economic Development Partnership (STL Partnership) was awarded a $30 million tax credit allocation from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) on October 28, 2022. The institution announced $5 billion in New Markets Tax Credits that will spur investment and economic growth in low-income urban and rural communities nationwide. A total of 107 Community Development Entities (CDEs) were awarded tax credit allocations, made through the calendar year (CY) 2021 round of the New Markets Tax Credit Program (NMTC Program).
“Receiving this $30 million NMTC allocation will allow us to continue advancing equitable development in the St. Louis region. We are proud of the projects we have been able to finance in underserved areas of St. Louis and look forward to continuing to help businesses in developing low-income areas grow,” said Rodney Crim, CEO and President of the STL Partnership
STL Partnership, the economic development organization serving St. Louis City and County, administers its St. Louis, MO-IL regional NMTC program under the certified Community Development Entity called Heartland Regional Investment Fund, LLC (HRIF). Last week’s announcement is the fifth award received by HRIF since 2010 for a total allocation amount of $180 million. The fund serves St. Charles and St. Louis County in Missouri, it is also available to Bond, Clinton, Madison and St. Clair counties in Illinois.
“We are excited to be participating, once again, in this critical community development program. The New Markets Tax Credit Program helps economically distressed communities attract private investment capital. This federal tax credit will help the STL Partnership fill project financing gaps by enabling investors to make larger investments than would otherwise be possible,” said Christopher Michael, Business Development Officer at STL Partnership
The CDFI Fund’s announcement brings the national total amount awarded through the NMTC Program to $71 billion. Historically, NMTC Program awards have generated $8 of private investment for every $1 invested by the federal government. Through the end of fiscal year 2021, NMTC Program award recipients deployed almost $60.4 billion in investments in low-income communities and businesses; with impacts such as the creation or retention of nearly 871,000 jobs, and financed more than 9,500 businesses. Since its inception, the NMTC Program has supported the construction of 77 million square feet of manufacturing space, 118 million square feet of office space, and 77 million square feet of retail space.
Read the full news release here
About the St. Louis Economic Development Partnership
The St. Louis Economic Development Partnership (STL Partnership) provides economic development services for St. Louis City and St. Louis County. The Partnership works with economic development partners in the region to attract, retain and grow businesses.
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 17 allocation rounds and has made 1,354 awards totaling $66 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.
About the CDFI Fund
Since its creation in 1994, the CDFI Fund has awarded more than $5.1 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; and the Native American CDFI Assistance Program. In addition, the CDFI Fund has allocated $66 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and guaranteed bonds for over $1.7 billion through the CDFI Bond Guarantee Program.