The New Market Tax Credit (NMTC) Program incentivizes community development and economic growth by using tax credits that attract private investment to distressed communities.
According to Community Development Financial Institutions Fund, low-income communities, have historically, experienced a lack of investment, as evidenced by vacant commercial properties, outdated manufacturing facilities, and inadequate access to education and healthcare service providers. The New Market Tax Credit Program (NMTC) aims to break this cycle of disinvestment by attracting the private investment necessary to reinvigorate struggling local economies.
The NMTC Program attracts private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDE). The credit totals 39% of the original investment amount and is claimed over a period of seven years.
Press Release: US Treasury Announces New Markets Credit Awards- October 28, 2022
How it Works:
Types of NMTC projects include:
Criteria for NMTC projects:
Hotel St. Cloud will serve as a catalyst to help revitalize downtown Canon City and bolster the local economy. This project along with other revitalization efforts will create quality, living wage jobs to ensure a diverse economic base, a resilient and growing tax base, and long-term economic vitality for local businesses.
Unbridled, an event management company in Colorado, purchased Hotel St. Cloud in 2018. With the help of many private and public parties, including a $3 million Community Revitalization Grant from the Colorado Office of Economic Development and International Trade (OEDIT) and a New Market Tax Credit financing of $9 million from Colorado Enterprise Fund, this $15 million project will break ground November 2022.
Hotel St. Cloud is located in Canon City which is an area with a 14.6% unemployment rate, 34.8% poverty rate, and a 51.5% median family income. Unbridled used a NMTC to:
Benefits of the project to the community:
*Targeted Job Seekers = low-income person, resident of a low-income community, person with lower levels of education, or person that faces barriers to employment.
Clifton Community Resource Campus is a 20-acre development in Mesa County being constructed to address several needs in the community, notably the severe shortage of childcare and early childhood education (ECE) services. Mesa County is considered a childcare desert and has only enough licensed childcare providers to serve 20% of children ages 0-5. This new community resource campus is located in a distressed area with a 29% poverty rate, a 15.9% unemployment rate, and a family median income of 51.8%. The NMTC loan is being used to:
Benefits of the project to the community:
*Targeted Job Seekers = low-income person, resident of a low-income community, person with lower levels of education, or person that faces barriers to employment.
indieDwell Colorado is a 501c3 nonprofit organization based in Pueblo that seeks to change the building industry by offering high-quality, durable, sustainable, energy-efficient homes to underserved communities. The facility is located in a distressed area with a 21.2% unemployment rate, a median family income of 35.9%, and a 44.8% poverty rate. indieDwell Colorado used an NMTC loan to:
Benefits of the project to the community:
*Targeted Job Seekers = low-income person, resident of a low-income community, person with lower levels of education, or person that faces barriers to employment.
TruStile Doors is based in Denver and manufactures interior and exterior doors for residential and commercial uses. The facility is located in an area with 15.7% unemployment and a median family income of 48.4%. TruStile used an NMTC loan to:
Benefits of the project to the community:
*Targeted Job Seekers = low-income person, resident of a low-income community, person with lower levels of education, or person that faces barriers to employment.