Civic announced today a $10 million New Markets Tax Credit (NMTC) investment with Ajinomoto Foods North America. Ajinomoto Foods manufactures and markets a wide variety of high-quality specialty frozen food products, including Asian, Italian, Mexican, custom and private brand products. In March, Tyson Foods announced plans to relocate its San Diego operations, resulting in the elimination of 480 full-time jobs from its Otay Mesa plant. Ajinomoto purchased the 165,763 square-foot plant and retained 352 jobs. The $10 million investment from the Economic Growth Fund is financing equipment and building improvements to add a third manufacturing production line in 2019 that is anticipated to support 80 to 100 new jobs over the next couple of years.
“We are very excited to partner with Ajinomoto Foods on this project,” said Andrew Phillips, Interim President of Civic. “The support of our manufacturing firms is a key component of the economic prosperity element of the recently adopted Otay Mesa Community Plan and this project will not only add new jobs, but it will also support small businesses in and around Otay Mesa that will provide products and services to Ajinomoto.”
In 2012, Civic formed the Civic San Diego Economic Growth and Neighborhood Investment Fund to become certified as a Community Development Entity. The main role of the Community Development Entity is to secure New Markets Tax Credit funds as well as manage Qualifying Low-Income Community Investments to continue the work of revitalizing San Diego’s underserved neighborhoods. Civic has received four allocations of New Markets Tax Credit totaling $133 million from the United States Department of the Treasury.
Congress established the New Markets Tax Credit program in 2000 to drive investment in both businesses and real estate projects in low-income communities. The program attracts investment capital to these communities by allowing corporations and individuals to receive a credit against their Federal income taxes in exchange for making direct equity investments in entities such as Civic. With the new Goodwill facilities, for instance, Civic provided $10 million in New Markets Tax Credits that were then purchased by US Bank to provide flexible financing to support the building’s improvements and purchase of new equipment to add the new production line.
“To date, Civic has closed eights transactions totaling more than $100 million,” said Michael Lengyel, Assistant Vice President of Economic Development of Civic. “These transactions have supported the construction or rehabilitation of more than 400,000 square feet of real estate and has supported the retention and creation of more than 700 permanent jobs.”
Civic is actively working to identify qualifying projects to receive this type of investment. To qualify, a project must be located in, or directly benefit, a low-income community by creating quality jobs, or providing goods or services to low-income persons. This form of financing is intended to provide no more than 20 percent of a project’s total cost and is best suited for large capital projects of $8 million or more. To present Civic with potential projects for New Markets Tax Credit funding, contact Michael Lengyel at lengyel@civiccommunities.com.
