FOR IMMEDIATE RELEASE: Sept. 22, 2008
City partners for new markets tax credit investment in East Village
The City of Kansas City, Mo., and Central Bank of Kansas City have partnered to deploy $12.7 million in new markets tax credit allocations to assist the construction of the JE Dunn Construction Co. headquarters in the East Village area.
The transaction closing was made possible through participation of a combination of public and private partners, including Central Bank of Kansas City, the City’s Community Development Entity, JE Dunn Construction Co., US Bancorp, Virchow Krause, UMB Bank, Americo Life and others.
“This investment in East Village represents a tremendous opportunity for community impact in a difficult-to-develop area of Kansas City — and this is just the beginning," Mayor Mark Funkhouser said.
The JE Dunn headquarters is the first vertical construction in the larger East Village Tax Increment Finance plan. When fully developed, the East Village area, including the JE Dunn headquarters, is projected to exceed $350 million in total development cost.
“This investment is important because it represents the first major new markets tax credit deal in the city,” City Manager Wayne A. Cauthen said. “The JE Dunn project is one piece of a larger plan to revitalize the City’s east loop area.”
The JE Dunn headquarters qualified for $12.7 million in new markets tax credit debt and equity financing due to its high level of job creation potential, community impact and location (the Community Development Financing Institutions Fund, the federal allocator of new markets tax credits, defines the East Village area as a highly distressed, low-income community).
The value of the new markets tax credit equity to the project was approximately $2.8 million. U.S. Bank New Markets Tax Credits is the investor in the transaction. The proposed office building will include at least 155,000 square feet and will be adjoined to an approximately 750-space public parking garage, owned and maintained by the City.
“Since 1949, our office has been located on the east side of downtown Kansas City,” said Steve Dunn, chairman of the JE Dunn Construction Company. “Our commitment to downtown is strong and we are appreciative of the City’s willingness to work with us on our future corporate headquarters.”
Swope Community Builders will develop the remainder of the East Village area. Plans include 600 housing units at a variety of income levels, 750,000-square-feet of office space, 12,000-square-feet of retail space, 45,000-square-feet of office/condo space and 2,740 parking spaces. Remaining East Village projects are expected to apply for new markets tax credit financing in future phases.
“New markets tax credits are a great addition to the City’s toolbox because they are a good way to incent and leverage private and public investment,” said Jeffrey Yates, the City’s chief financial officer.
The new markets tax credit financing for this project was available due to a $50 million allocation awarded to Central Bank of Kansas City, in partnership with the City, in 2007. Central Bank of Kansas City has been recognized by Community Development Financing Institutions for the bank's investment in distressed communities.
Media inquiries about the City’s Community Development Entity or the City’s New Markets Tax Credits program should be directed to Ruben Alonso, Finance Department, (816) 513-1021.