(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
JS-1536
Deputy Assistant Secretary, Dan Iannicola, Jr. today presented a $52 million award to the St. Louis Development Corporation, one of the 62 organizations selected by the U.S. Department of the Treasury to receive a total of $3.5 billion in tax credit allocations through the second round of the New Market Tax Credit Program (NMTC), as recently announced by Secretary John W. Snow. St. Louis Development Corporation is the economic development agency for the city of St. Louis that has formed partnerships to invest in distressed areas of the bi-state St. Louis region.
President Bush's support of the New Market Tax Credit awards demonstrates a clear commitment to provide renewed economic opportunity and prosperity, especially to many hard-hit areas, said Iannicola.
The NMTC program attracts private-sector capital investment into urban and rural low-income areas to help finance community development projects, stimulate economic opportunity and create jobs in the areas that need it most. The program was established by Congress in December 2000, and permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments supporting certain business activities in low-income communities. The credit provided to the investor totals 39 percent of the initial value of the investment and is claimed over a seven-year credit allowance period.
St. Louis Development Center anticipates using the NMTC allocation to attract capital for business lending, equity investments in emerging business operations, patient capital for site assembly, gap financing for real estate development, and major project funding. The NMTC financing will offer nontraditional rates and terms, which will be targeted to highly distressed areas of the St. Louis region.
The NMTC Program is administered by Treasury's Community Development Financial Institutions (CDFI) Fund. The CDFI anticipates that applications for the third round of the NMTC Program will be available during the summer of 2004.
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