The CDFI Fund Announces $3.5 Billion in New Markets Tax Credits Awards
The following was distributed as part of the New Markets Tax Credit Connection - Summer 2014 newsletter.
On June 5, 2014, the CDFI Fund announced of the 310 organizations that applied, 87 received awards for the 2013 calendar year ranging from $15 million to $60 million. Amazingly, the 11th round of awards was even more competitive than the 2012 round. This year’s award success rate of 28% was a decrease from 30% registered by the 2012 pool of applicants. The maximum value of an individual award also decreased from $80 million.
An analysis of award winners reveals:
- Only five of the allocatees were first-time award winners, down from 12 in the 2012 round.
- Award winners are headquartered in 32 different states and the District of Columbia
- Winners will use their investments to finance approximately $2.011 billion in major urban areas projects, $680 million in minor urban areas and $742 million in rural areas.
- 41 of the 87 awardees are focusing their efforts within a national service area benefitting economically distressed communities throughout the country.
- The remaining 46 awardees are authorized to make investments on a multistate, statewide, or local (citywide or countywide) basis.
What should not be lost in the analysis of the awardees, however, is that the 310 applicants identified worthy projects requiring $25.9 billion of investment dollars, further supporting the continued need for the reauthorization of this vital and efficient community revitalization tool. Since its inception, the NMTC program is credited with creating or retaining over half a million jobs and supporting almost 150 million square-feet of manufacturing, office, and retail space.
While Congress continues to debate a variety of extender bills through its upcoming lame duck session, it is expected that the 2014 application will be released in the coming weeks to even greater competition.
Given the expected increase in competition, CohnReznick suggests that applicants consider three actions that might help maximize the potential of winning an award:
- Refine, refine, refine your value proposition and the benefits that the community will garner should you win the award. Get creative in how you communicate so that your benefits not only stand-up, but stand out.
- Make the project real. Make it tangible. Create a personal connection to the people who will benefit most by the investment.
- Enhance your value proposition by linking the project to existing civic organizations and other groups with a proven history of supporting the community.
For more information, contact Debbie Rosier, Senior Manager, CohnReznick, at 410-783-7432.
The information contained herein (or in any attachment) is not intended to be used by any taxpayer for the purpose of avoiding any penalties that a taxing authority might impose on the taxpayer or for the promoting, marketing or recommending to another party any tax related matters.
The information in this transmission is privileged and confidential and intended only for the recipient listed above. If you are not the intended recipient, please advise the sender immediately by reply e-mail and delete this message and any attachments without retaining a copy. If you are not the intended recipient, you are hereby notified that any disclosure, copying or distribution of this message, or the taking of any action based upon it, is strictly prohibited.
This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.