FOR IMMEDIATE RELEASE: Oct. 5, 2007
City receives $50 million in new markets tax credits
Partnership with Central Bank brings federal funds for urban core development
The U.S. Department of Treasury has awarded the City of Kansas City, Mo., in partnership with Central Bank of Kansas City, $50 million in new markets tax credits.
The new markets tax credit program allows taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated community development entities. The development entities are required to use substantially all those funds to make loans or investments in businesses operating in distressed census tracts located within the city limits.
"This is great news for Kansas City," said Mayor Mark Funkhouser. “These new markets tax credits will help the City with its economic development efforts in neighborhoods that need it most. I want to thank the Department of the Treasury, the Central Bank and our congressional delegation for their efforts in securing these resources."
The federal funds complement the City’s new Economic Development and Incentive Policy by serving as a capital source for investment in small businesses and distressed areas in the urban core. New markets tax credit investments will be made in low-income communities, which are defined as any population census tract in which at least 20 percent of its population is at the poverty level or the area median income is not more than 80 percent of the statewide of metropolitan area median income.
The application process for the tax credit began in September 2006 when the City’s chief financial officer/director of the Finance Department and the Development Finance Division of the Finance Department engaged Paul O’Hanlon of the Kutak Rock law firm to assist with the City’s application. Central Bank of Kansas City then agreed to partner with the City. The City’s Development Finance Division prepared potential projects for the application, while Central Bank identified investors for the credits.
“This award represents more than 13 months of work by City staff and Central Bank,” said City Manager Wayne A. Cauthen. “These projects will have a tremendous impact on future investment in Kansas City’s urban core.”
Central Bank of Kansas City President Bill Dana said allocation of the funds will be targeted at specific projects. “The new markets tax credit allocation will be used to fill financing gaps in high-impact, primarily mixed-use redevelopment projects. The use of these funds will be determined on a per project basis.”
A seven-member investment advisory board will oversee the allocation of the funds. The City will appoint four of the seven members, including the chairperson.
For more information, call Dan Bagunu, Finance Department, (816) 513-1033.