FOR IMMEDIATE RELEASE: Oct. 28, 2008
City to receive $40 million in federal new markets tax credits
Allocation is the first for the City as sole applicant
The City of Kansas City, Mo., has been awarded $40 million in new markets tax credits under the sixth round of the U.S. Department of the Treasury’s Community Development Financial Institutions Fund’s New Markets Tax Credit Program. The award marks the first time the City has applied independently to receive funds under this program. The City, in partnership with Central Bank of Kansas City, received $50 million in new markets tax credits last year.
The allocation allows the City to leverage private resources to uncover and respond to capital supply gaps in the city’s most challenging markets.
“Securing these funds is a competitive process, so the allocation is exciting news for the city,” said Jeffrey Yates, the City’s chief financial officer. “Given the current economic climate, the opportunity to fill financing gaps in high-impact, primarily mixed-use redevelopment projects is essential to move development forward.”
The funds will be invested in the city’s underserved markets to strengthen the economic base and empower low-income residents. Specifically, new markets tax credit investments will be made in low-income communities. Low-income communities are defined as population census tracts where 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.
“One of the most important challenges we face as a city is revitalizing our urban core,” Mayor Mark Funkhouser said. “To succeed, we need an array of economic incentive tools. Federal new markets tax credits are among the most effective. They encourage private investment and reduce risk for the city. I want to thank our congressional delegation for its efforts in 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 within the Kansas City, Mo., city limits. This award compliments the City’s new Economic Development and Incentive Policy.
The City’s Development Finance Division of the Finance Department prepared the application, including a pipeline of potential projects that prompted the award by the U.S. Department of Treasury.
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.