Tax Credit Equity Fund Gets $50M for Low-Income Development

National New Markets Fund L.L.C. has received a $50 million New Markets Tax Credit allocation from the Treasury Department to provide funding for real estate development in financially strapped neighborhoods. This allocation marks the third that the fund–created by Strategic Development Solutions and Economic Innovation International Inc.–has been awarded by the department. Congress established the NMTC allocation program in December 2000 to finance economic development projects in low-income communities by providing individual and corporate taxpayers with a credit against federal income taxes for making equity investments in those areas. This year’s installment is the sixth round of the program. The program was slated to expire this year, but was extended to 2009. In addition to the $50 million the National New Markets Fund was most recently awarded, it notched $25 million and the fourth round and $50 million in the fifth round. The fund has invested $3.25 million to $15 million in each of following projects: the National World War II Museum and the Oschner Baptist Medical Center, both in New Orleans; the Hammond Square Mall in Hammond, La.; Mercy Corps’ headquarters in Portland, a project that aims to obtain Gold or Platinum LEED certification; and the King Edward Hotel in Jackson, Miss., which had been abandoned for more than 40 years. The King Edward hotel project, which National New Markets Fund deployed $15 million in tax credits into, is an example of a property that was holding back its community’s economic development, according to Deborah La Franchi, president & CEO of Strategic Development Solutions and co-founder & president of National New Markets Fund. “It’s really had a negative impact on that whole part of Downtown Jackson,” she said. But now the property is being converted into a Hilton Garden Inn that will also comprise retail space and apartments. The fund is in the closing process of four developments in Louisiana, San Francisco’s Mission District and Downtown Los Angeles. With its latest allocation, the fund is targeting southern states, such as Alabama, Arkansas, Louisiana and Mississippi, as well as the Central Valley of California, but is open to considering other markets in need of revitalization. “We know that there are good projects down there,” La Franchi said, “so we’re trying to work with those developers to bring their projects to fruition.”