Treasury Department Awards Building America CDE $50 Million of New Markets Tax Credits
March 1, 2012
The AFL-CIO Housing Investment Trust’s subsidiary Building America CDE, Inc. has received $50 million of New Markets Tax Credits (NMTCs) in a new round of allocations announced by Deputy Treasury Secretary Neal Wolin. Building America will use the tax credits to continue its work of attracting equity investment for high-impact development projects that help revitalize low-income communities. Building America is one of 70 organizations selected from among 314 applicants for this round of NMTC allocations. The U.S. Department of the Treasury awarded a total of $3.6 billion in tax credits, with a median allocation amount of $50 million.
“We are extremely pleased that Building America has been given this opportunity to continue to make investments in underserved neighborhoods,” said Eric Price, Building America’s CEO. “The tax credits will help us put together financially sound projects that will bring needed business activity, healthcare, housing, and jobs to underserved communities.”
Building America has a pipeline of prospective projects under consideration to utilize its new allocation of tax credits. It is also seeking to form partnerships with other community development entities that have unused NMTC allocations.
This is the second NMTC award for Building America, which received $35 million through this program a year ago. Building America is using its earlier allocation to support five projects, which represent more than $180 million of total development, with nearly 225,000 square feet of commercial space and 263 housing units. The construction work on these projects is expected to create more than 900 union construction jobs and new permanent jobs at the businesses, healthcare services, and other organizations that will occupy the new office and retail space. Using the expertise of its investment professionals, Building America has been able to work with community representatives, developers, and investors to structure financing that will address the development needs identified by local residents.
The NMTC program, carried out through the Treasury Department’s Community Development Financial Institutions Fund, makes use of tax credits to attract investment capital from the private sector to stimulate economic and community development and job creation in low-income communities. Designated community development entities (also known as CDEs) such as Building America serve as the vehicles for these investments.