New Markets Tax Credit Program
In direct partnership with the City of Kansas City, Mo., through its Development Finance Division, Central Bank of Kansas City will provide non-traditional financing for the development of mixed-use, business, community center and housing projects to meet the needs of Kansas City’s low income neighborhoods. This program will be used as a capital source to spur development in Kansas City’s distressed communities.
What is the New Markets Tax Credit Program?
The New Markets Tax Credit Program was designed by Congress in December 2000 to attract private-sector capital investment into the nation’s low-income areas to help stimulate economic growth and create jobs by financing community development projects and business expansion.
The program provides credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities. The credit provided to the investor (either corporate or individual) totals 39 percent of the cost of the investment and is claimed over a seven-year period. The CDE’s are charged with making investments into qualified projects or businesses in low-income communities.
The NMTC Program in Kansas City
- Central Bank of Kansas City received $50 million in allocation authority in October 2007
- The funds will be deployed within the city limits of Kansas City, Mo., in highly distressed census tracts
- Eligible businesses include for-profit and non-profit businesses and mixed use development (primarily commercial uses with the possibility of housing)
- For real estate transactions, the product is debt financing with below market interest rates.
- Project size between $2.5 million and $10 million
- Must generate significant and measurable community impact
- Transactions must demonstrate need for this subsidized financing (but for NMTC, this project would not be feasible)
How to access the NMTC for your project:
- Review the project eligibility checklist
- Fill out the New Markets Tax Credits project application
- E-mail or fax it to Ruben Alonso at ruben_alonso@kcmo.org or fax (816) 513-1174
- If the transaction proceeds to secondary or tertiary review, the sponsor/developer will be contacted for additional information
- If the project does not qualify the sponsor/developer will receive written communication explaining the reasons that disqualify the project
For more information, you may contact Ruben Alonso at (816) 513-1021 or ruben_alonso@kcmo.org.
