(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
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At New Markets Tax Credit Event Hibernian Hall; Roxbury, Massachusetts
I’m very pleased to be back in Boston, and particularly glad to be here to share such great news. Today we are announcing allocations of New Markets Tax Credits to five Massachusetts-based Community Development Entities. The allocations total over $270 million for communities in Massachusetts.
The New Markets Tax Credit program is an important community and economic development tool. It was created to encourage business investment and job creation in communities like this one.
The goal is to attract capital from the private sector and to empower the people who live, work and invest in communities to make decisions about what type of ventures will create the most jobs and grow the local economy.
The message that this program sends is – this community is a good place to do business. Today’s announcement is a step toward a brighter future for this neighborhood and many others throughout Massachusetts.
New Markets Tax Credits are available to individual and corporate taxpayers who make qualified equity investments in privately managed investment vehicles called Community Development Entities (or CDEs).
CDEs serve or provide investment capital for low-income communities, and they are certified by the Community Development Financial Institutions (CDFI) Fund of the U.S. Department of the Treasury. These tax credit allocations are awarded through a competitive process.
It is now my pleasure to announce the five awardees from Massachusetts. As I read out the name of each organization, I ask the representatives to come forward.
The first awardee is Affirmative New Markets LLC, headquartered here in Boston. Affirmative New Markets’ strategy is to invest in real estate projects to finance the development of office and community space in low-income communities. They plan to use this allocation to provide loan and equity capital investments in two real estate development projects – one in Boston and the other on Cape Cod. These projects will make the commercial space more affordable to the end users, thereby allowing non-profits and other community organizations to remain in the low-income communities that they serve.
Next is Boston Community Capital Inc. (or BCC). BCC will use its New Markets Tax Credit allocation to provide loans to support businesses and real estate development in low-income communities. Because of this program, BCC will be able to significantly increase the volume of its lending activity and provide more flexible terms to borrowers, such as below market interest rates, lower origination fees, higher loan-to-value ratios, and longer interest-only loan payment periods. BCC will also use the equity generated by its allocation to secure financing to support another credit facility, separate and apart from its New Markets Tax Credit fund, to provide additional financing to low-income communities.
Our next awardee is the Massachusetts Housing Investment Corporation (MHIC). Eligible projects to be financed with this allocation include community centers, office and retail space, theatres and performing arts centers, and studios and gallery space. The New Market Tax Credits will enable MHIC to offer interest-only first mortgage loans, zero to five percent interest-only subordinate loans, and equity investments that represent up to 25 percent of total development costs. In fact, this Hibernian Hall renovation project was made possible by an investment from the Massachusetts Housing Investment Corporation (MHIC). Once refurbished, this building will contain a performance center, retail and office space, and a new computer learning center.
Now I am pleased to call forward MassDevelopment New Markets LLC. MassDevelopment will utilize its allocation to offer flexible, nontraditional loans for business investments in low-income communities. It will finance four specific real estate redevelopment projects that are on Brownfield’s sites and are of critical importance to some of the most deeply distressed communities across the state.
And finally we have Rockland Trust Community Development LLC, headquartered in Rockland, Massachusetts. Rockland Trust’s allocation will support business lending targeted at low-income communities in the four southeastern Massachusetts counties of Barnstable, Bristol, Norfolk, and Plymouth. In conjunction with its lending activities, Rockland Trust will also provide financial counseling to businesses within low-income communities, both to assist them with New Markets Tax Credits requirements and in obtaining complementary equity and debt financing from other public and private sources.
Congratulations to a great group of awardees. I’m very pleased to be a part of this event today.
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