Cardin, Blunt Lead Bipartisan Effort To Spur Economic Growth in Underserved Communities
WASHINGTON – Today, U.S. Senators Ben Cardin (Md.) and Roy Blunt (Mo.) introduced the bipartisan New Markets Tax Credit Extension Act of 2019. The measure would promote investments in underserved communities by permanently authorizing a 39 percent federal tax credit for businesses or economic development projects in areas with poverty rates of at least 20 percent, or median incomes at or below 80 percent of the area median.
“In Maryland, the New Markets Tax Credit has been deployed across our state on a diverse range of infrastructure and community development efforts, from an affordable housing project to provide apartments for educators and teachers in my home city of Baltimore, to a multicultural center for low-income minority families in Langley Park," said Senator Cardin. "I am pleased once again to be a supporter of this bipartisan legislation, which will create jobs and stimulate our economy in communities across Maryland and across America.”
“The New Markets Tax Credit is a critical tool for encouraging new investment in areas that need it most,” said Senator Blunt. “This program has a successful record of expanding economic opportunities and improving quality of life in areas across our state, whether it’s financing a training center for sheet metal workers in St. Louis or the first new grocery store in more than a generation in Pagedale. This program benefits families and local economies and urban and rural areas alike, and I urge all of our colleagues to support it.”
In addition to making the New Markets Tax Credit (NMTC) program permanent, the legislation increases annual NMTC allocations, indexes future allocations to inflation, and exempts NMTC investments from the Alternative Minimum Tax.
Senators Cardin and Blunt introduced similar legislation in the previous congress. The NMTC was originally authorized in 2000 as part of the Community Renewal Tax Relief Act.
The legislation is cosponsored by U.S. Senators Rob Portman (Ohio), Chuck Schumer (N.Y.), Tim Scott (S.C.), and Maria Cantwell (Wash.). Companion legislation has been introduced in the House by U.S. Representatives Terri Sewell (Ala.) and Tom Reed (N.Y.).
Direct NMTC investments have generated more than 1,000,000 jobs and $90 billion in capital from other sources, all of which was invested in communities with high poverty and unemployment rates.
- East Baltimore Revitalization – In East Baltimore, the NMTC program helped attract nearly $2 billion dollars of private sector financing toward the redevelopment of 88 acres of former industrial land into new and rehabilitated affordable and mixed-income housing, the first new school built in Baltimore in 30 years, a life sciences and technology park, modern manufacturing space, retail space, and more than 8,000 new jobs.
- Arcturus Urban Farm – Volunteers of America Chesapeake is developing a $6 million indoor urban farm in East Baltimore, part of a new program to give workforce training to ex-offenders. The farm uses LED lights to grow lettuce, basil, cilantro, and oregano indoors on vertically-stacked levels. The farm will be co-located in a residential reentry center, which helps ex-offenders reenter society and the workforce after serving federal prison sentences. The farm will provide job training and therapeutic opportunities for VOAC's residents.
- OpenWorks – OpenWorks in Baltimore, Maryland, is an example of how the NMTC program is supporting small-scale urban manufacturing. The multipurpose center gives local investors a place to build and test out new products, while also acting as a youth programming center, workforce development center, and small business administrator.
- Remington Row – In the neighborhood of Remington, the Remington Row project includes a new health clinic, retail, 108 apartments priced at below-market rates, an open market and will include ten small kitchens for Baltimore chefs and entrepreneurial food vendors, the redevelopment of 30 abandoned row homes for sale to teachers, police officers and first responders; and the redevelopment of an old tire shop into a restaurant, theater and office space – all made possible by the New Markets Tax Credit. The project created 200 construction and 265 permanent jobs in a severely distressed neighborhood.
- Shoprite of Howard Park – The West Baltimore neighborhood of Howard Park had been without a grocery store for over a decade. In August 2014, the New Markets Tax Credit financed a 68,000 square foot supermarket that also created 250 full-time and part-time jobs, many of which were filled by neighborhood residents. Community input shaped the store’s design and plan to cater to the preferences of the Howard Park community, right down to the types of food the store would carry.
- CASA Multicultural Center – CASA Multicultural Center provides an array of services to low-income immigrant families in the Hyattsville community, including educational, vocational and employment services, and English as a Second Language services.
- Eastern Shore Conservation Center – The NMTC helped turn a vast complex of long-vacant buildings into a center for nonprofits working to keep the Chesapeake Bay clean.
The NMTC program can be traced either directly or indirectly to the creation of more than 42,000 Missouri jobs between 2003-2015. The NMTC has benefited 274 Missouri businesses and economic revitalization projects, resulting in a total of $3.9 billion in new investments.
“Given our geographic location where capital isn’t as readily accessible for high tech startups, an investment in connection with the New Markets Tax Credit program created a unique opportunity for our company to raise a Series A round of financing at a critical time of growth,” said John Thomson, Founder and CEO of PayIt. “We are now thriving, with 70 employees and growing, and helping to transform Kansas City into a Midwestern technology hub.”
Following are a few examples of the Missouri projects that have benefited from the NMTC:
- Deaconess Center for Child Well-Being, St. Louis, Mo. – The more than 21,000-square-foot facility provides meeting rooms, a chapel, and a large conference space, as well as administrative offices, for the Deaconess Center for Child Well-Being, Vision for Children at Risk, and Neighborhood Houses. The Deaconess Center is expected to host more than 6,000 citizens a year in more than 250 meetings focused on children's issues.
- Ferguson Empowerment Center, Ferguson, Mo. – A multi-nonprofit community empowerment center was built on the site of the QuikTrip that was vandalized during the Ferguson unrest. The center provides job training and placement, financial literacy, and other empowerment programs for residents.
- Marquette Tower, Cape Girardeau, Mo. – The newly restored Marquette Tower is the epicenter of the Marquette Tech District, bringing jobs and tech industry growth to Cape Girardeau. Anchored by an expansion of Codefi, the historic building offers offices, suites, and coworking spaces to technology-based and innovative companies, and organizations that support them.
- Guardian Angel Settlement Association, St. Louis, Mo. – Up to $3 million in NMTC financing will support the development of a new social services center. The 18,000 square foot facility will serve approximately 3,000 individuals each year.
- Sioux Chief Manufacturing Co., Kansas City, Mo. – NMTCs helped finance Sioux Chief Manufacturing Co.’s 596,000-square-foot facility at the CenterPoint-KCS Intermodal Center in south Kansas City, bringing new jobs to the area.
- Habitat for Humanity, St. Louis, Mo. – NMTC financing filled in the funding gap for the construction of 65 home ownership units in the Jeff VanderLou neighborhood of St. Louis.
- A. Zahner Co., Kansas City, Mo. – The architecture metal work company received $2 million in NMTC support for a headquarters expansion, creating new jobs in the region.
- Urban Sprouts Child Development Center, University City, Mo. – $2 million in NMTC financing was used to convert the former McCarthy Spice factory into the Urban Sprouts Child Development Center, a 15,000-square-foot, state-of-the-art early education facility that will serve 128 children.
- Pagedale Towncenter, Pagedale, Mo. – Enterprise Financial provided $8.5 million in NMTC financing to construct the Pagedale Towncenter, part of the 24:1 community development initiative. The project includes a community health center, a facility providing mental health services for low-income children, and a theater offering discounted ticket prices to residents of a neighborhood with a poverty rate of 36 percent. NMTC funding also helped finance the first new grocery store in the Pagedale community in 40 years.
- INDEECO, Cuba, Mo. – In 2014, the NMTC helped INDEECO, a manufacturer of heating equipment and controls, grow from 200 to 350 employees in Cuba, Mo.
- Jahabow Industries, Inc., Owensville, Mo. – Advantage Capital, in partnership with Southwest Bank, provided $10 million in financing to Jahabow Industries, Inc., enabling the company to continue its growth and innovation as a top manufacturer in the retail fixture industry.
Next Article Previous Article