New $50 million allocation from the U.S. Department of Treasury will help spur economic development in underserved areas throughout New York City
New York, NY, Sept. 10, 2021 (GLOBE NEWSWIRE) — The New York City Regional Center (“NYCRC”) is pleased to announce an award of $50 million in New Market Tax Credits from the Community Development Financial Institutions Fund of the U.S. Department of Treasury. The credits will be allocated to NYCR-CDE, a Community Development Entity managed by the NYCRC. Since 2016, the NYCRC has been awarded a total of $165 million in New Market Tax Credits from the U.S. Department of Treasury. To receive a New Market Tax Credit allocation award, the NYCRC was required to demonstrate a mission and track record of providing investment capital for low-income communities.
The new $50 million allocation marks the fourth New Market Tax Credit award received by the NYCRC. In 2016, the NYCRC received an initial award of $45 million. In 2018, it secured a second allocation of $20 million and in 2020, it secured a third award of $50 million. The $165 million in total allocations provides a unique opportunity for the NYCRC to continue its mission of providing financing that creates jobs and stimulates community revitalization in underserved areas of New York City. These allocations are among the first managed by an EB-5 regional center.
The New Market Tax Credit Program was created by Congress in 2000 in an effort to stimulate private investment and economic growth in low-income neighborhoods and rural communities that lack access to capital. Historically, low-income communities often have difficulty attracting investment. The New Market Tax Credit Program aims to break this cycle of disinvestment by attracting the private investment necessary to reinvigorate struggling local economies. Private capital is incentivized by providing federal income tax credits to investors in exchange for making equity investments in low-income neighborhoods.
The NYCRC’s new $50 million New Market Tax Credit allocation will provide financing to community development projects that typically face financing challenges, such as health care centers, schools, and community facilities located in underserved areas of New York City.
“We are very pleased to receive our fourth allocation from the U.S. Department of Treasury,” said George Olsen, NYCRC Co-Managing Principal. “This new $50 million New Market Tax Credit award will help spur economic growth in New York City during these challenging times. We look forward to delivering financing to underserved communities and continue our role in supporting community revitalization.”
The 100 organizations receiving awards for 2021 were selected from a pool of 208 applicants across the nation and will receive a total of $5 billion in New Market Tax Credit awards.
Over the past 13 years, the NYCRC has put over $1.5 billion of EB-5 capital to work across a broad spectrum of infrastructure and real estate projects in New York City. Much of this capital has been invested in underserved areas in need of long-term economic growth. Examples include:
- $767 million to finance ground-up, redevelopment, and infrastructure projects in Brooklyn, including seven projects totaling $339 million in the Brooklyn Navy Yard;
- $108.5 million to finance ground-up and redevelopment projects in Washington Heights (an Upper Manhattan Empowerment Zone);
- $232.5 million to finance the construction of a public high-speed wireless infrastructure network in New York City subway stations and along city streets; and,
- $220 million to finance ground-up construction in the Bronx.
About New York City Regional Center
The NYCRC was approved by the United States Citizenship and Immigration Services in 2008 to secure foreign investment for real estate and infrastructure projects under the EB-5 Immigrant Investor Program. Congress created the EB-5 program to stimulate economic development through foreign investment. The program’s mandate is to use foreign investment to spur job creation while simultaneously affording eligible foreign investors the opportunity to become lawful permanent residents of the United States. The NYCRC was the first EB-5 regional center approved in New York City.
Construction is complete in 19 of NYCRC offerings to date. These completed projects successfully utilized NYCRC EB-5 financing to assist in the construction of over 3.8 million square feet of new development and renovation as well as infrastructure upgrades. Examples of completed projects utilizing EB-5 capital from NYCRC-managed funds include the following:
- A new wireless infrastructure network in New York City’s subway stations;
- Redevelopment of a new cargo and animal care facility at John F. Kennedy International Airport;
- New soundstages and production support space at Steiner Studios, New York City’s largest film and television studio;
- Online grocer Fresh Direct’s new headquarters in the South Bronx;
- Redevelopment of multiple unused buildings and surrounding infrastructure upgrades in the Brooklyn Navy Yard, New York City’s largest industrial park;
- City Point retail complex in Downtown Brooklyn;
- A new hotel and medical office complex in Washington Heights;
- A new Wegman’s supermarket and industrial buildings in Brooklyn; and,
- Expansion of the Hutchinson Metro Center in the Bronx.
In addition to fueling economic development, NYCRC offerings have enabled over 5,200 individuals to become permanent residents of the United States through the EB-5 Immigrant Investor Program.
About the New Markets Tax Credit Program
Established by Congress in 2000, the New Markets Tax Credit Program assists economically distressed communities attract private investment capital. This federal tax credit helps to fill project financing gaps by enabling investors to make larger investments than would otherwise be possible. Communities benefit from the jobs associated with investments in manufacturing, retail, and technology. Communities also benefit from greater access to housing and public facilities in health, education, and childcare.
Through the New Market Tax Credit Program, the U.S. Department of Treasury allocates tax credit authority to Community Development Entities (CDEs) through a competitive application process. CDEs are financial intermediaries through which investment capital flows from an investor to a qualified business located in a low-income community. CDEs use their authority to offer tax credits to investors in exchange for equity in the CDE. The tax credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. With these capital investments, CDEs can make loans and investments to businesses operating in distressed areas that have better rates, terms, and flexibility than the market.
Since 2001, New Market Tax Credits have generated more than $55.9 billion in investments in low-income communities and businesses, resulting in the construction of 63 million square feet of manufacturing space, 98 million square feet of office space, and 69 million square feet of retail space.
NYCR-CDE, LLC is an Equal Opportunity Provider.
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