About the New Markets Tax Credit (NMTC) Program
The New Markets Tax Credit (NMTC) Program is a federal tax credit program that promotes investment in businesses and community facilities located in low-income communities. In exchange for a qualified equity investment, pursuant to the NMTC program requirements, an investor is provided a tax credit. The proceeds of the equity investment are utilized to fund low-income community businesses located in qualified low-income census tracts. Some examples of projects financed with the assistance of NMTCs include community centers, charter schools, medical facilities, child care facilities, historic live theater venues, supermarkets, business incubator facilities, shopping centers, office buildings for public agency or private commercial use, clean technology research facilities, manufacturing plants, hotels, office parks serving nonprofit organizations, and mixed-use projects.
Civic Communities is a nonprofit corporation that is certified as a Community Development Financial Institution (CDFI) and a Community Development Entity (CDE) for purposes of applying for an annual NMTC allocation from the United States Department of the Treasury’s Community Development Financial Institutions Fund. To date, Civic Community Partners has received $163 million in tax credit allocation to invest in projects in San Diego’s underserved communities. Our strategy is to provide NMTC loans that enable disadvantaged businesses to grow, create quality jobs, and deliver critical goods and services to San Diego’s low-income residents. We target our activities only to businesses that are aligned with a community development plan and that can generate exceptional impacts for low-income persons. Our primary borrowers are community service businesses and larger commercial goods and services projects. Our financing is dedicated to businesses in San Diego’s highly distressed communities.
Civic Communities has utilized its own modest income earned from the NMTC program to provide smaller community-based investments into underserved neighborhoods. These investments support our primary mission by providing loans with reasonable terms and flexible underwriting to businesses, non-profit organizations and community-based organizations who are pursuing projects with direct community impact, particularly in San Diego’s underserved neighborhoods.
New Markets Tax Credit Loans
To date, the Civic Community Ventures has received and deployed $163 million in tax credit allocation in projects in San Diego’s underserved communities. Our strategy is to provide NMTC loans that enable disadvantaged businesses to grow, create quality jobs, and deliver critical goods and services to San Diego’s low-income residents. We target our activities only to businesses that are aligned with a community development plan and that can generate exceptional impacts for low-income persons. Our primary borrowers are community service businesses and larger commercial goods and services projects. Our financing is dedicated to businesses and larger commercial goods and services projects in San Diego County’s highly distressed communities.
Civic’s New Markets Tax Credit Program
Targeted Investment Requirements
- For-profit or non-profit entities are eligible
- Total project cost in the $8 - $20 million range (New Markets Tax Credit equity typically provides about 20% of the projected cost)
- Funding is for real estate development or to support ongoing operations
- The balance of project financing has been identified
- Site control and entitlements are already in place
- Project needs to provide a strong community benefit, including job creation
- Project has a local community support
- Poverty Rates greater than 30%
- Unemployment rates at least 1.5 times the national average
- Median income less than 60% of area median income
- Other distress factors such as designated food deserts or medically underserved areas
Joanna Whitley Broussard
Community Investment Manager
- (619) 533-7177
The Advisory Board receives input from residents of low-income communities in San Diego County and provides guidance to Civic Community Partners in the implementation of our Community Development Financial Institution and New Markets Tax Credit programs with particular focus on how the program activities deliver strong community benefits to those communities.
Role of the Advisory Board in New Markets Tax Credit Transactions
· The New Markets Tax Credit (NMTC) Program was established by Congress in 2000 to spur new or increased investments in low-income communities.
· Organizations that receive NMTC allocation must maintain accountability to residents of low-income communities through representation on a governing board or an advisory board to the entity.
· A minimum of 20 percent of the members of the advisory board must be representative of the low-income communities, but the Advisory Board includes more than 80% low-income community representation and also strong community and economic development experience.
· The Advisory Board reviews each proposed project to help insure that the projects provide strong community benefits, such as job creation and the provision of goods and services, and the Advisory Board weighs those benefits in relation to the needs of the specific community where the project is located.
· The Advisory Board then makes a formal recommendation for every project and projects must be supported by the Advisory Board to move forward for final consideration by the Civic Board.