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What is the New Markets Tax Credit Program?
The New Markets Tax Credit (NMTC) 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 (CDE). 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 New Markets Tax Credit Program in Kansas City
In 2007, in direct partnership with the City of Kansas City, Mo., Central Bank of Kansas City applied for and was awarded $50 million in NMTC allocation authority. The authority was allocated by the Community Development Financial Institutions (CDFI) Fund of the U.S. Department of the Treasury, which is the federal agency that administers the NMTC Program. Beginning in 2008, Central Bank of Kansas City CDE began providing 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 using its NMTC allocation authority.
Building off the success of the partnership between the City and Central Bank of Kansas City, the Kansas City, Missouri Community Development CDE, a controlled entity of the City, in October 2008 applied for and was awarded $40 million in NMTC allocation authority.
Both allocations represent a critical capital source to spur development in Kansas City’s distressed communities. To date, Central Bank of Kansas City CDE has used its allocation to help finance a catalytic project in the East Village as well as fund a small business loan pool. Applications are still being accepted for consideration for eligible projects or businesses.
The Kansas City, Missouri Community Development CDE is accepting applications for projects/businesses that are eligible for NMTC facilitated financing. Prospective applicants are encouraged to review the NMTC program guidelines and application process available on this website. Any questions about NMTC or the Kansas City, Missouri Community Development CDE's NMTC Program can be directed to Ruben Alonso III, NMTC Program Coordinator at (816) 513-1021 or by email at ruben_alonso@kcmo.org.
Summary of New Markets Tax Credit Program in Kansas City, Missouri
- Kansas City, Missouri Community Development CDE received $40 million in allocation authority in October 2008
- Central Bank of Kansas City received $50 million in allocation authority in October 2007
- NMTC will be deployed within highly distressed census tracts in the Kansas City, Mo., city limits
- Eligible entities 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
- Minimum project size - $4 million. Projects below this size will be considered on a case by case basis. (Businesses may also consider the Central Bank of Kansas City CDE's NMTC Loan Pool for projects below $4 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 New Markets Tax Credit Program for your project:
Review and complete the project eligibility checklist and email or fax it to Ruben Alonso III at ruben_alonso@kcmo.org or fax (816) 513-1174.
If your project/business is determined to be eligible, review and complete a NMTC application. Applications for NMTC eligible projects/businesses that meet the Kansas City, Missouri Community Development CDE's programmatic guidelines will be considered on a first-come, first-serve basis based on the following scheduled request for proposal (RFP) dates:
- May 29
- July 31
- Sept. 30
- Nov. 30
Applications are to be received by 5 p.m., the day of the scheduled RFP date, and should be mailed/delivered to Ruben Alonso III, NMTC Program coordinator, City of Kansas City, Mo., 414 E. 12th St. third floor, Kansas City, MO 64106.
Prospective applicants may elect to FASTrack an application by opting out of the RFP schedule and initiate the application review process immediately. An application fee of $500 will apply for the FASTrack option.
For more information about the Kansas City, Missouri Community Development CDE's application process or about the NMTC program, please contact Ruben Alonso at (816) 513-1021 or ruben_alonso@kcmo.org.
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