New Markets Tax Credits
What is NMTC?
LISC’s New Markets Tax Credit (NMTC) activities stimulate the investment of private capital in the distressed communities that LISC serves. A pioneer in the creation and use of this new federal program, LISC has focused its efforts on financing the development of commercial and community space and housing that generates jobs, providing needed goods and services, and reversing physical deterioration in struggling communities. LISC’s NMTC efforts are managed by National Equity Fund, Inc., its tax-credit equity affiliate.
LISC addresses a community’s unique economic development challenges by financing transactions that meets its particular needs. Whether this allows a food bank in Washington State to finance a warehouse distribution center, or enables a motorcycle parts manufacturer to remain and grow in rural Wisconsin, LISC uses NMTCs to structure the appropriate financing products. This has often involved supplementing historic tax credits to reclaim community assets for productive use.
LISC also focuses on transactions that lead to revitalization beyond the particular project being financed, such as shopping centers, which can stimulate the redevelopment of commercial strips. Another strategic approach has involved financing several arts-related projects that represent components of broader efforts to transform neighborhoods. Similarly, LISC has financed significant amounts of incubator space for local entrepreneurs.
In addition to commercial space, LISC provides NMTC financing for charter schools, day care centers, and other community facilities.
Example: Summit Place Building
The $53.8 million Summit Place (pictured here) project is an adaptive reuse of
century old buildings near Milwaukee. When completed, the renovated facility will offer more
than 390,000 square feet of office space. Amenities i
nclude a café, fitness center, free internet café and multiple conference rooms.
This project, which generates high-quality, family-supporting jobs, is critical to metropolitan
Milwaukee and is expected to create more than 2,500 permanent and 100 construction jobs
and produce an estimated $1.4 million in annual tax base. The Summit Place development will provide well-paying jobs through a diversified
mix of employment opportunities, thereby attempting to prevent the
disadvantages of being overly dependent on one economic sector.
Financing Summit
LISC used $7.5 million of its $140 million New Markets Tax Credit award acquired in 2006 to obtain equity capital from US Bancorp Community Development Corporation which, when combined with loans from City of West Allis and Lincoln State Bank, allowed it to make loans to the project on advantageous terms that positioned this reclaimed industrial complex to compete with comparable office space developments in non-NMTC areas farther from Milwaukee’s urban core.
More Information
NMTC Fact Sheet
More Project Profiles
Robert Poznanski
New Markets Support Company, LLC
501 Seventh Avenue, 7th Floor
New York, NY 10018
Tel: (212) 455-9385
