Credits will be used to stimulate job growth and economic investment in urban and rural communities
The Colorado Growth and Revitalization Fund, LLC (CGR Fund), a partnership between the Colorado Housing and Finance Authority (CHFA), the City and County of Denver, and the Colorado Enterprise Fund, was awarded $35 million in New Market Tax Credits by the U.S. Treasury Department earlier today. New Market Tax Credits are used to spur job growth and private-sector economic investment in traditionally underserved low-income areas in urban and rural communities.
The CGR Fund was one of 70 award recipients nationwide, and one of five recipients whose service area includes Colorado. Recipients were selected through a competitive application process, and chosen from a pool of 239 applicants who collectively requested $23.1 billion in tax credits. Of the five Colorado service area award recipients, the CGR Fund is the only entity who proposes to distribute its entire allocation in Colorado.
"New Market Tax Credits offer small business a flexible source of capital which is critical to making deals work. This allocation of New Market Tax Credits will be particularly valuable in financing developments over the next few years given the current economic environment," said Milroy A. Alexander, CHFA CEO and Executive Director.
The CGR fund was first awarded $40 million of New Market Tax Credits in 2005. Approximately $32 million of the previous allocation has been utilized, with $8 million remaining and reserved for use in rural Colorado. Examples of projects having received New Market Tax Credit financing from the CGR Fund include:
• Montessori Academy of Colorado - A nonprofit early childhood education center in the Five Points area of central Denver was awarded $3.9 million in New Market Tax Credits, resulting in the creation of 63 permanent jobs. The education center provides full day, year round education and care, as well as part-time programs for children two months to six years old.
• The Sage Building - Developer Shames Makovsky Realty was awarded $6.7 million in New Market Tax Credits to assist in the financing for the renovation and tenant build out of the historic Fontius Building, renamed the Sage Building. Estimates indicate that 175 permanent jobs and 150 construction jobs will be created as a result of the Sage Building renovation.
• Edgewater Marketplace - Edgewater Marketplace consisted of the redevelopment of a previously vacant 21,000 square foot building into a new and vibrant retail space. This project was awarded $8.7 million in New Market Tax Credits. An estimated 150 construction jobs and 150 permanent jobs will be created upon the completion of Edgewater Marketplace's redevelopment.
New Market Tax Credits were created by Congress in 2000. The program is based on the idea that federal tax credits will increase the flow of private-sector investment capital to viable business opportunities in low-income communities. These investments provide much needed capital to assist in the economic revitalization of underserved communities by creating new jobs and financing small businesses.
“A number of catalytic development projects in metro Denver have become a reality over the past three years through the use of New Market Tax Credits,” said Andre Pettigrew, executive director of the City and County of Denver Office of Economic Development. “This new allocation further strengthens our efforts around neighborhood revitalization and will lead to additional jobs for Denver’s economy.”
A report released by the U.S. Department of Treasury Community Development Financial Institution (CDFI), reports that more than 75 percent of the transactions financed by New Market Tax Credits nationwide were located in a census tract with: 1) a poverty rate of at least 30 percent; 2) a median family income at or below 60 percent of the applicable area median income; and 3) an unemployment rate of at least 1.5 times the national average.
About Colorado Housing and Finance Authority (CHFA)
CHFA finances the places where people live and work. Created in 1973 by the Colorado State Legislature, CHFA strengthens communities by making loans to low- and moderate-income homebuyers, affordable multifamily rental housing developers, and small and medium sized businesses. CHFA also provides education and technical assistance about affordable housing and economic development. CHFA is a self-sustaining public enterprise funded by issuing bonds, and receives no tax dollars. CHFA issued bonds are not obligations of the state. For more information about CHFA, please visit www.chfainfo.com. Contact our Denver office at 1.800.877.chfa (2432), or our Western Slope office at 1.800.877.8450.
About the Denver Office of Economic Development
The Denver Office of Economic Development (OED) works to create a local environment that stimulates balanced economic growth through job creation, business assistance, housing options and neighborhood redevelopment.