The Times-Picayune, February 25, 2011
Eight Louisiana community development entities — seven headquartered in New Orleans — won nearly 10 percent of all the New Markets Tax Credits allocations announced Thursday by the Treasury Department.
The awards are intended to stimulate economic and community development and job creation in low-income communities by permitting the selected financial institutions to make loans and investment they might not otherwise be able to make.
The $310 million awarded to the eight Louisiana institutions just about equals the $316 million allocated to nine CDEs in New York City, the other biggest beneficiary.
“The New Markets Tax Credit continues to be a tool for job-creation and economic revitalization in areas that struggle to attract investment because of poverty, unemployment and lack of opportunity,” said Donna Gambrell, director of the Treasury’s Community Development Financial Institutions Fund, noting that the 2nd Congressional District’s total of $257 million was more than that being directed to any other district in the nation.
“These organizations have and will continue to demonstrate why this tool has been so effective in making literally thousands of projects possible across Louisiana and the country and give Americans a chance to make a living, to start a business and to build a better future in areas that need it most,” Gambrell said.
The allocations for the seven recipients headquartered in New Orleans are $56 million for Advantage Capital Community Development Fund; $53 million for Whitney New Markets Fund; $42 million for AMCREF Community Capital; $35 million for Liberty Financial Services; $28 million for National Cities Fund; $28 million for First NBC Community Development Fund; and $15 million for Enhanced Community Development. The eighth recipient, of $53 million, is Stonehenge Community Development, based in Baton Rouge.
“The fact that our community has the highest amount of awards in the entire nation illustrates that we’re getting it right,” said Rep. Cedric Richmond, D-New Orleans. “The 2nd Congressional District of Louisiana has the right formula for venture capitalist investment in low-income communities. We’re making great investments to rebuild our city and get our neighbors back on the jobs, and it’s working.”
Sen. Mary Landrieu, D-La., said the “tax credits will have a significant impact in several Louisiana neighborhoods in desperate need of investment.”
The Louisiana community development entities — a legal term describing an institution whose prime mission, and accountability, is to low-income communities — have been helped in their efforts in past years by a companion state version of the credit, the enactment of which was a top achievement of Richmond’s service in the state Legislature.
That state allocation has now been exhausted.
The New Orleans entities, most of which received awards in past rounds, also benefited in the past from the expansion of the program under the Hurricane Katrina Gulf Opportunity Zone Act, which targeted recovery efforts after the storm.
Advantage Capital, which seeks to bring venture capital where it seldom goes, has won awards in seven of the eight rounds. While the use of the tax credits by Advantage, like the others, is not limited to Louisiana, managing director Michael Johnson said that “in the neighborhood of 25 to 30 percent of our allocations have been in Louisiana, focused primarily on south Louisiana.”
Alden McDonald, Liberty’s president and CEO, said that it had received $130 million in previous allocations, which had been used almost exclusively in the New Orleans metro area post-Katrina to help rebuild Holy Cross High School as well as bring back a hotel, a funeral home, an animal hospital and other small businesses. He said the new allocation may also go to spur projects in Kansas City, Mo.; Jackson, Miss.; Baton Rouge; and Detroit, as well as New Orleans, where he said one likely project is the renovation of the Saenger Theater on Canal Street.
AMCREF Community Capital, which has been receiving the credits since 2006, will focus its new allocation on renewable energy and green manufacturing, according to its president, Cliff Kenwood.