Capital Impact Partners is now a 10-time NMTC recipient – with these awards totaling over $ 687 million. To date, the organization has used NMTC allocations to support the funding of more than 78 transactions nationwide that have improved access to healthcare, education, healthy food, a affordable housing and the ability of seniors to age in their communities with dignity.
“Building equitable and inclusive communities requires investments from a wide range of organizations,” said Diane Borradaile, Director of Loans at Capital Impact Partners. “The New Markets Tax Credit program helps us bring together key partners to support projects that create economic opportunities and the creation of generational wealth.
Today’s announcement brings the total amount awarded under the NMTC program to $ 66 billion. Historically, NMTC program rewards have generated $ 8 private investment for each $ 1 invested by the federal government. Until the end of fiscal year 2020, the winners of the NMTC program have deployed nearly $ 56 billion in investments for communities and low-income businesses, with impacts such as the creation or maintenance of nearly 871,000 jobs and the construction or rehabilitation of nearly 231.5 million square feet of commercial real estate.
“These investments will create jobs and spur economic growth in urban and rural communities across the country,” the US Treasury Secretary said. Janet L. Yellen noted. “Many of the communities that will receive these funds have faced economic challenges for many decades. Challenges that have been made more difficult by a lack of investment. It is critical that Congress maintain these investments over time by making the permanent new business tax credit program. “
Creation of high impact projects thanks to NMTC:
Capital Impact a deployed a variety of NMTC allocations to help launch projects nationwide. Here are some examples of these high impact projects:
Colocation services: healthcare and housing
To better serve the homeless residing in Los Angeles’ ‘Skid Row’, the new 23,468 square foot Joshua House Health Center was built to replace a much smaller site nearby.
The federally licensed health center will provide primary care, dental, optometric and mental health services, as well as a wide range of wellness services. The site will serve 7,000 patients, 2,200 more than at the previous facility. Ninety-nine percent of the clientele live below 200 percent of the federal poverty line, and the expansion of services is vital to the continued health of the community. In addition, the health center will be co-located with a supportive housing center, which will provide 55 units of permanent housing for homeless people.
Skid Row has the largest concentration of chronically homeless people in the country. Skid Row population estimates range from 8,000 to 11,000 people. It is a predominantly black male population, although the number of women and children has increased in recent years.
Capital Impact has partnered with the Nonprofit Finance Fund, the Los Angeles Development Fund and the US Bank Community Development Corporation on this $ 25.9 million NMTC transaction.
Build in San Francisco, California – one of the most expensive cities in the country – is a tall order. However, access to healthy and affordable food is more necessary than ever. Meals on Wheels San Francisco (MOWSF) volunteers donate over 20,000 hours and staff serve nearly 5,000 clients, providing home wellness and safety checks, nutritional counseling and companionship. As demand increases, MOWSF has invested in a new 37,000 square foot kitchen that can prepare 10,000 meals in a single shift, while having the capacity for two [eight-hour] work shifts and maximize access to seven days a week.
The MOWSF program is very profitable. It costs about $ 10 per day for food and the delivery of two meals and security checks for a homebound elderly person. Meals can be provided for an entire year for about the same cost as a day in the hospital. A 2013 study found that if each state increased the number of older Americans who received meals by just 1%, it would save Medicaid more than $ 109 million in medical costs each year.
Capital Impact has partnered with JPMorgan Chase, San Francisco Community Investment Fund, Community Vision (formerly known as Northern California Community Loan Fund) and First Republic Bank on this matter. $ 41 million NMTC project.
Marygrove Conservancy is a non-profit organization that was established to operate and manage the 53 acre Marygrove College campus in Detroit after it closed in 2019. The primary goal of the Marygrove Conservancy is to facilitate the redevelopment of the campus as a cradle-to-career education campus, from junior kindergarten to “P-20” graduate degree.
The newly constructed single-story building will include approximately 29,000 square feet of space designed to support and provide comprehensive services to 144 children (from infant to kindergarten) across the socio-economic spectrum. To ensure income diversity, half of the slots will be subsidized by the federal government through the Early Head Start and Head Start programs. The project will create 12 classrooms and have targeted therapy rooms that will include play therapy, health therapy and sensory rooms.
Starfish Family Services, a respected social service agency and early childhood service provider on the subway Detroit market, will operate the site. Starfish is currently working with the University of Michigan to develop a curriculum for infants and toddlers throughout the year for the project that is designed specifically for a diverse group of urban children.
Capital Impact has partnered with the Northern Trust Company and the Kresge Foundation on this $ 22 million NMTC project.
Small nonprofits serving under-invested communities do not always have the funds to cover operating costs like office and legal services. In Denton, Texas, the Serve Denton organization helps fill this gap, enabling nonprofits to be financially self-sufficient and serve their communities while co-located services benefit community members.
With the construction of a new 48,000 square foot center, Serve Denton will provide space for a federally licensed health center, food bank and many other nonprofit service providers in the area. Organizations will have affordable office space and share operating costs so that each can devote more funds to its clients.
Capital Impact has partnered with US Bank to support this $ 9.5 million NMTC project.
How do tax credits for new markets work?
Managed by the CDFI Fund, NMTC allocations are making their way into the community by the following process:
- A community development entity (CDE) submits an application to the CDFI Fund requesting authorization to allocate a specific dollar amount of tax credits.
- If its request is approved, the CDE is empowered to allocate tax credits to an investor.
- The investor chosen by the CDE benefits from a tax credit amounting to 39% of the cost of the investment. The investor can claim this tax credit over a period of seven years.
- In return for these tax credits, the investor makes a qualified capital investment (QEI) in the CDE.
- The CDE should use the QEI it receives from the investor to finance businesses or real estate projects in low-income communities, where the poverty rate is 20% or more or the median income is 80% or less than the median income for the area. The CDE also has the possibility of investing in other CDEs granting loans in areas where low-income residents live.
About Capital Impact Partners:
Through capital and engagement, Capital Impact Partners helps people create communities of opportunity that break down barriers to success. We work to advocate for key issues of equity and social and economic justice by deploying mission-focused funding, capacity building programs and impact investing opportunities.
Non-profit community development financial institution, Capital Impact has disbursed more than $ 2.5 billion since 1982. In 2020, Capital Impact launched a new business with CDC Small Business Finance under a single management team and a national strategy to reinvent traditional and traditional financial systems. Our goal is to ensure that these systems fairly serve communities of color to drive community solutions that support economic mobility and wealth creation.
Our leadership in financial and social impact has enabled Capital Impact to be rated by S&P Global and recognized by Aeris for our performance. Based at Arlington, Virginia, Capital Impact Partners operates nationwide, with local offices in Austin, Texas, Detroit, Michigan, New York, New York State, and Oakland, California.
Learn more about www.capitalimpact.org and www.investedincommunities.org
SOURCE Capital Impact Partners