A permanent 'home' for New Markets Tax Credits?

Brendan Beier, Director for New Markets Tax Credits, and Will Lanier, Analyst in Financial Services, contributed a companion thought piece about NMTC in NFF's Money and Mission blog on The Chronicle of Philanthropy. Click here to view.

Amidst the ongoing uncertainty about how Congress will handle expired tax credits, it seems like a good time to remember the many successes of the New Markets Tax Credit (NMTC) program and the very real impacts it has had on low-income communities and community revitalization efforts across the nation.

The NMTC program, administered by the CDFI Fund of the US Treasury, is a tax incentive intended to attract private investments to low-income communities. NMTC is one of several tax provisions that expired at the end of 2013 and, unlike in years past when tax credits frequently received temporary extensions, Congress is taking a fresh look at each provision as part of the overall tax reform climate. Despite strong bipartisan support for the NMTC program, its future is unclear.

In just over a decade of existence, the NMTC program has brought enormous benefits to low-income communities. And there is concrete evidence of this impact: NMTC was responsible for the creation of approximately 550,000 jobs between 2003 and 2012, with more than 72% of investments being made in communities exhibiting severe economic distress (see the New Markets Tax Credit Coalition website for more information).

Since 2007, NFF has been awarded $231 million in NMTC allocation, which we have put to use helping 26 nonprofit organizations -all serving low-income communities—expand and improve their programs and services. Our NMTC program has supported health centers, nonprofit theaters, social services providers, charter schools, and a statewide food bank, among others. In 2013 alone, NFF deployed over $40 million in NMTC investments to support five high-performing nonprofit organizations with their major new facilities projects: West Hawaii Community Health Center, Harlem RBI’s DREAM Charter School, Project H.O.M.E, Flint Health and Wellness District and the Joseph M. Smith Community Health Center. Without NMTC, none of these projects would have been possible.

Below are details of these projects. Because of them, along with 21 other active NMTC deals in our portfolio, people in communities that are underserved or under-resourced will have access to much needed services and facilities. Whether it’s creating a ‘first of’ or addressing ‘must haves’, NFF has witnessed the potential the NMTC program has for transforming much-needed investments into reality for organizations that are working to increase the health and vibrancy of their communities.

To learn more, visit our NMTC webpage, and if you are interested in getting involved, the New Markets Tax Credit Coalition has prepared an Advocacy Toolkit for direct action.

West Hawaii Community Health Center (WHCHC)

$10 million NMTC allocation, closed December 2013

WHCHC provides integrated medical, dental and behavioral health services to primarily low income individuals and families in three clinic locations on the big island, with a part-time mobile dental clinic that serves homeless individuals. WHCHC will build a new 11,500 square foot medical center, the La'i'Opua Health Center, which will provide medical and dental care to 4,300 project patients in the first year of operation. Approximately 130 construction jobs will be created, along with 35 permanent positions upon completion.

Harlem RBI DREAM Charter School

$10 million NMTC allocation, closed September 2013

Harlem RBI provides year-round education and community-building services to more than 1,200 East Harlem children and young adults. Its high-performing DREAM K-5 charter school, co-located in a traditional public school, is on pace to reach its full enrollment of 450 students in 2016. In advance of that milestone, Harlem RBI has embarked on a mixed-use facility project that will include space for its school and youth development programs. NFF joined with several partners on a $27 million NMTC allocation to finance this transition to a permanent home.

Project H.O.M.E.

$7 million NMTC allocation, closed December 2013

Project H.O.M.E. (Housing, Opportunities, Medical Care, and Education) provides a range of services helping individuals to break the cycle of poverty and homelessness. They are building a new Stephen Klein Wellness Center that will serve 1,200 patients annually and will include a fitness and physical therapy center, a pharmacy and dental care. This new 28,598 square foot health center will provide much-needed dedicated and state-of-the-art clinical space in a zip code that reports some of the most widespread and entrenched health problems in the city.

Flint Health and Wellness District

$5 million NMTC allocation, closed December 2013

The Uptown Reinvestment Corporation (URC) was formed in 2000 with a mission to revitalize the downtown Flint business district by laying the groundwork for an emerging health education and wellness district. This district will be the new home of Michigan State University's School of Public Health and serve as the relocated site of the Flint Farmers Market, which will bring a vital fresh food option to downtown residents in a mass-transit-accessible location. The new wellness district will create over 100 permanent jobs, 60 of which will be high-quality research jobs at MSU.

Joseph M. Smith Community Health Center (JMSCHC)

$8 million NMTC allocation, closed December 2013

Beginning as a small clinic in 1974, JMSCHC is building a new 48,000 square foot facility in the Allston-Brighton neighborhood, whose target population of 169,000 people is low income, uninsured or publicly insured, and culturally diverse. The new facility will allow JMSCHC to meet patient demand and increase the center's operational efficiency by centralizing managers, staff and patients. Once completed, the center will provide the area with 75 new jobs, including 48 clinical job opportunities and 27 support staff opportunities, as well as community classes and events.