News from City Hall
City Communications Office
City of Kansas City, Mo.
CONTACT: Mary Charles, city communications officer, (816) 513-1356
FOR IMMEDIATE RELEASE: Oct. 30, 2009
City entity awarded $35 million in New Markets Tax Credits
The Kansas City, Missouri Community Development CDE (KC CDE), a community development entity of the City of Kansas City, Mo., has been awarded $35 million in New Markets Tax Credit allocation authority under the seventh round of the U.S. Department of the Treasury’s Community Development Financial Institutions Fund’s New Markets Tax Credit Program. This award represents the second consecutive year that the KC CDE has applied for and been awarded allocation authority under the federal program.
“I am very pleased that the Department of the Treasury has awarded Kansas City another round of New Markets Tax Credits,” Mayor Mark Funkhouser said. “This program complements and will reinforce the efforts of the New Tools Task Force, which recently released their report that emphasizes the need to leverage new tools that can stimulate investment in the city’s underinvested communities. I want to thank our congressional delegation for their efforts in helping securing these resources.”
The New Markets Tax Credit program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated community development entities. The entities are required to use substantially all those funds in distressed census tracts to make business loans or investments. The KC CDE’s New Markets Tax Credit allocation can only be used within the Kansas City, Mo. city limits.
“Given the current economic climate, the opportunity to help fill financing gaps in high-impact projects in areas of the city that have historically experienced significant disinvestment is essential to the future economic vitality of Kansas City, Mo,” said Jeffrey Yates, the City’s chief financial officer.
The KC CDE will continue to focus its allocation in the city’s most distressed communities by targeting investments in businesses and mixed-use, adaptive re-use and infill projects that benefit low-income communities. This investment will help in the creation of living-wage jobs and work force development support, provision of affordable housing options, promotion of women-, minority-owned businesses and use of “green” building practices.
Specifically, investments will be made in highly distressed communities, which are defined as population census tracts where the poverty rate is greater than 30 percent or median family income is less than 60 percent of the statewide of metropolitan area median family income.
Last year, KC CDE was awarded $40 million in New Markets Tax Credit allocation authority. The KC CDE, whose New Markets Tax Credit program is managed by the City’s Finance Department, committed this allocation in less than a year, facilitating financing for six businesses and projects located in highly distressed census tracts throughout the city. Ruben Alonso of the City’s Development Finance Division was responsible for preparing this year’s application, which emphasized the growing need for alternative financing tools to assist the City in facilitating investments that create opportunities in low-income communities citywide.
“I’m proud of the work of City staff and the Advisory and Governing Boards of the KC CDE to successfully demonstrate the ability of the City to use this program and to help secure another allocation of these tax credits,” City Manager Wayne A. Cauthen said. “The projects that the KC CDE is helping with this program will have a tremendous impact on future investment in Kansas City’s most distressed communities.”
For more information, contact Ruben Alonso at (816) 513-1021.