New Markets Tax Credits

West Texas Food Bank

July 20, 2016 by

For more than 20 years, the West Texas Food Bank (“WTFB”) has been West Texas’ only provider of reliable, affordable food. The Food Bank serves the needy in two ways; first, they provide meals to more than 44,000 clients annually in their 19-county footprint. Secondly, they provide food to a network more than 80 non-profits, leveraging the wider reach of those partners. WTFB continues to purchase greater amounts of food, because greater efficiency in food manufacturing is reducing surpluses that used to be donated to food banks, and also because of increased demand, particularly in the Permian Basin area.

The inflationary effect on rents as a result of the oil boom has driven many people, especially the longtime resident elderly, to seek food from WTFB and its partners. Elderly residents living on fixed incomes cannot easily survive as food prices rise. The Food Bank, with its affiliation with Feeding America, is able to negotiate cheaper prices on food, passing this savings along to its partners and expanding the reliable supply of free food to the neediest of West Texas residents.

For more than a decade, the WTFB has recognized that the demand for its services far outstrips its ability to cope with that demand, that a new, larger facility would be required to meet growing needs. Census data reports that since 2000, the combined population of Midland and Ector counties has risen by more than 40,000 people, and the number of individuals served by the WTFB has grown in lock-step with the population increase over that time. The existing facilities are out-of-date, over-used, and under-prepared to serve hungry West Texans.

Despite being hamstrung by inadequate facilities, WTFB’s impact on the community has nevertheless been staggering. In 2014, WTFB distributed over 5 million pounds of food, or 4.2 million meal equivalent, to people in need: 40% of whom are children, 16% are seniors, and 63% are Latino. Seventy-four percent of WTFB clients have incomes that fall at or below the federal poverty level, with 89% of client households having annual incomes of $20,000 or less.

17 of the 19 counties WTFB serves are rural, and most of their service area is a USDA Food Desert. Over 98% of the 418 US counties that are designated Food Deserts are rural, and are some of the poorest in the US. Rural food deserts not only face higher poverty rates, lower median incomes, and significantly older populations than other rural counties, but they also suffer from severely limited access to quality, affordable food options, resulting in an extremely unhealthy and impoverished community. Studies conducted in rural food deserts show that more than 45% of the population did not consume adequate amounts of fresh fruits, 67% did not eat enough vegetables, and 34% lacked adequate dairy in their diets[1]. These populations must turn to smaller grocery stores that have a limited variety of quality foods and tend to charge higher prices[2].

In July, 2016, WTFB and Crescent Growth Capital closed on a $6MM NMTC financing, utilizing $5MM in allocation from McCormack Baron Salazar and $1MM from US Bank, to finance to construct a new 11,150 square foot volunteer activity and program innovation center. The nearly $6MM distribution center will feature 11,150 square feet of interior space and 7,000 feet in outdoor learning space, serving as the primary volunteer activity and program innovation center for the WTFB. The facility will add storage capacity as well, but more importantly, it will provide space to interact with the community, for classes covering topics ranging from basic nutrition and wellness to growing fruit and vegetables at home.

Volunteers, such an integral part of the food bank’s operations, will finally have adequate space to meet and work, operating a wide variety of programs at a very efficient cost. The WTFB simply could not provide all it does for the community, were it not for its army of volunteers donating their spare time to help their hungry neighbors. A new facility will greatly improve volunteers’ effect on the surrounding community. The $6MM Midland project includes the following amenities:

Demonstration Kitchen – A fully outfitted home-style kitchen used to demonstrate appropriate cooking techniques to community members such as youth groups, SNAP recipients, people with health issues that bring with them with dietary restrictions, and many more groups who will receive instruction from food experts.
Client Choice Pantry – Modeled after a convenience store, this room will have refrigeration and shelving that allows clients who need food to come in and select what foods they want. The Client Choice Pantry is available to first-time users; thereafter, clients are referred to one of the WTFB partners for ongoing service.
Large Warehouse Area – The warehouse area is used for storing foods, and includes a freezer/refrigerator section of significant size, and will serve as a staging area, utilized by the many volunteers who serve as unpaid labor for the food bank.
Community & Training Room – This room will be available for use by the community for meetings and conferences. It will be fully outfitted with audio-visual equipment to facilitate presentations so that appropriate learning can take place.
Hunger Alleviating Trail – An outdoor learning space, the Trail will be planted with native plants that are edible, and other plants that can thrive in Texas’ arid climate. It will serve as a meeting place for youth groups and others to learn how to grow desert gardens.
Earth-Bermed & Conventional Green Houses – An underground greenhouse will receive daylight but will be maintained at a cooler temperature to allow for a wider variety of plant life to blossom. An above-ground green house to grow winter vegetables during the cooler months.

[1] “Starved for Access: Life in Rural America’s Food Deserts”

[2] P.M Morris, L. Neuhauser, and C. Campbell, “Food Security in Rural America: A Study of the Availability and Costs of Food.” Journal of Nutrition Education 24: 52S-8S; (1992)

Los Barrios Unidos – Family Health Center

December 22, 2015 by

The mission of Los Barrios Unidos Community Clinic (LBUCC) is to proudly provide quality care to all people, creating a safe, affordable, and accessible healthcare experience. In 1972, the residents of several West Dallas neighborhoods united to open a community clinic in a portable building to serve a population disenfranchised from the economic and social services of the city due primarily to language and cultural differences.

LBUCC has flourished tremendously since its opening. 93% of LBUCC’s 21,000 patients are Hispanic and 74% are uninsured. Nearly 30 clinicians provide 70,000 patient visits each year. Patients are drawn from all parts of Dallas County although West Dallas, Oak Cliff and Grand Prairie are the core market areas. LBUCC proudly provides top-notch care to all people regardless of race, ethnicity, place of residence or even the ability to pay.

There is no shortage of need for affordable primary care in Dallas County, which is the second largest Metropolitan area in Texas in terms of size and population , and ranks ninth in the nation. 18.7% of Dallas County’s 2,368,139 residents or over 443,000 individuals live below 100% of the Federal Poverty Level (Census 2010).

In late 2014, Los Barrios Unidos engaged Crescent Growth Capital to facilitate the NMTC financing of its new Family Health Center, a new 21,400 square foot clinic offering 15 exam rooms, 3 open Team Stations with 4 modular workstations each, a large ground floor laboratory, a phlebotomy area, a massive 75-seat waiting area and plenty of storage.

In December, 2015, LBUCC and CGC closed on a $7MM federal NMTC financing, providing the funding necessary to construct the Family Health Center, using NMTC allocations provided by Primary Care Development Corporation and Capital One Bank. The NMTC subsidy drastically reduced LBUCC’s cost of capital, greatly reducing the ongoing debt burden for a non-profit FQHC whose patient base is nearly 3/4’s uninsured, while creating 24 new FTE jobs in one of Dallas’ most impoverished areas.

Terry Reilly Health Services

December 10, 2015 by

Forty-two years ago, Terry Reilly and his wife Rosie Delgadillo Reilly arranged with Dr. Clarence McIntyre for voluntary medical services for the migrant farm workers’ children who were being tutored at their home on Nampa’s north side. The experience helped to open the eyes of many local, regional, and national leaders to the plight of the large medically underserved population in the Treasure Valley area. Federal Public Health Services grant resources and strong local advocacy enabled the Reilly’s to found Community Health Clinics, Inc. as a vehicle to provide healthcare services to those who need it most. Today, the Federally-Qualified Health Center operates under the dba Terry Reilly Health Services (“TRHS”), and operates with the Mission of providing affordable, comprehensive health care to everyone, especially those facing barriers elsewhere, such as the uninsured, migrant and seasonal farm workers, and the homeless.

Despite the fact that 60% of TRHS’ patients are at or below the poverty level, just 28% are on Medicare/Medicaid, a discrepancy indicative of a State with one of the most poorly-ranked Medicaid programs in the nation. Nearly two-thirds of the 11,000 patients TRHS serves annually have no health insurance at all, presenting a significant fiscal challenge for the non-profit FQHC. Despite this apparent imbalance between services provided and service revenue received, TRHS has continued to grow both its patient encounters and its range of services.

In late-2014, Terry Reilly Health Services engaged Crescent Growth Capital to facilitate a NMTC financing that would provide the necessary working capital to allow the Federally-Qualified Health Center (“FQHC”) to provide an ever-expanding range of health services to Idaho’s most indigent populations. In December, 2015, TRHS and Crescent closed on a $6,000,000 NMTC facility, with allocation provided by Hampton Roads Ventures, and new markets tax credit investment provided by Capital One. The working capital facility will provide the FQHC with some much-needed operating capital to continue to serve the people of Nampa, Boise, and beyond.

Cermak Fresh Market at The Fields

September 16, 2015 by

Originally built in 1874 by Walter E. Olson as the manufacturing mill for the Olson Rug Company, 4000 West Diversey quickly became “the place” to buy rugs in Chicago. In 1935, Walter Olson brought in more than 800 tons of stone and 800 yards of soil to build Olson Memorial Park, and its centerpiece, the Olson Waterfall. Named as one of Chicago’s Seven Lost Wonders by the Chicago Tribune (August, 29, 2005), Olson Waterfalls and Rock Garden was one of the most beloved family attractions in the City until it closed in 1971.

In 1965, Marshall Field & Company purchased 4000 West Diversey and reopened the facility as a massive department store. In 2005, the warehouse was sold to Macy’s, Inc., as part of its purchase of Marshall Field’s, and the warehouse spent three years as a home for one-off sales, before being shuttered in 2008.

In 2014, 6 years after the building had closed, its ownership began drawing up plans for a a multi-phase redevelopment of the Marshall Field’s facility. The first phase of this redevelopment included a 68,000 sf Cermak Fresh Market grocery store on the first floor, which would serve as the anchor, catalyzing further development. Founded in 1986 by Dimitrious “Jimmy” Bousis and his late partner Pantellis Tzotzolis, Cermak Fresh Market has grown from a single 2,500 sf Central Park Produce store to 11 full-service grocery stores, including the recently-completed store in Milwaukee, WI, the operator’s first outside of Illinois. The family-owned business enjoyed early success by catering to the Puerto Rican community in Chicago’s Humboldt Park area. As it grew, the grocery chain broadened its focus to serving all of Chicago’s various ethnic communities and today, Cermak Fresh Market is a full-service international grocery store.

On September 16, 2015, Crescent Growth Capital and Cermak Fresh Market closed on a stacked $7.5MM State/$6MM Federal NMTC structure, using Illinois State NMTC allocations from the Southside Community Optimal Redevelopment Enterprise (SCORE) and the Valued Advisor Fund (VAF), and Federal Allocation from SCORE. The NMTC financing provided the necessary funds to renovate a portion of the first floor for Cermak Fresh Market, and the combined State and Federal NMTC subsidy drastically reduced Cermak’s cost of capital, substantially improving the prospects for the new store.

Omaha Early Learning Center – Gateway Project

May 6, 2015 by

Inspired by the Educare Learning Network, the Omaha Early Learning Centers (“OELC”) provide early childhood education programming to the most needy children in Omaha – a population that has grown significantly over the past decade. In the ten years ending in 2011, the Midwest saw a 40% increase in childhood poverty, the greatest such increase in the US. Studies have shown that children living in poverty start school 2-3 years behind their peers in terms a educational development, and are seven times less likely to graduate high school. Furthermore, a November, 2009 study concluded that every dollar spent on early childhood education equates to a 7-10% rate of return: poverty-stricken children that enroll in early childhood development programs are better prepared when they enter the school, more likely to graduate from high school, more likely to earn a higher wage, and are less likely to resort to public aid, or turn to crime.

In January 2014, Congress appropriated $500M to expand the number and quality of early learning opportunities for infants and toddlers through the Early Head Start – Child Care Partnerships grant program. OELC, in partnership with the Buffett Early Childhood Fund, found itself in a unique position to combat Omaha’s alarming rise in poverty by leveraging these Federal dollars into new early childhood programming. That program needed a home, though, so in mid-2014, OELC engaged Crescent Growth Capital to facilitate the NMTC-financing for two new early childhood development facilities in Omaha.

In May 2015, OELC, the Buffett Early Childhood Fund and CGC closed on a stacked $10.26M State/$3M Federal NMTC financing to construct the Gateway ELC, utilizing NMTC allocation provided by Enhanced Capital. The new 16-classroom facility will include a full kitchen and multi-purpose room, that will serve up to 96 infants and toddlers, and 68 pre-kindergarten students. The project is anticipated to create 38 full time jobs, and an additional 10 jobs for contracted service providers. Using the Educare model as its inspiration, the Gateway center will focus enrollment on the most impoverished children first, thereby maximizing its impact on those most in need of help.

Cloverleaf Cold Storage

April 12, 2015 by

Founded in 1952, Cloverleaf Cold Storage is a family-owned provider of public and contract storage for the meat processing and packaging industries. With 15 refrigerated warehouses and nearly 65 million cubic feet of food storage space nationwide, Cloverleaf is consistently ranked by the International Association of Refrigerated Warehouses as one of the 25 largest operators in the world.

In early 2015, Cloverleaf kicked off plans to open a 235,000 sq. ft. facility that would provide refrigerated warehouse space and added distribution capacity to the adjacent Farmland processing plant, and engaged Crescent Growth Capital to help them solicit, structure and close a NMTC funding to finance the $30MM facility. In April, 2015, CGC and Cloverleaf closed a stacked NMTC financing utilizing $10MM of Illinois State NMTCs and $14MM of Federal NMTCs provided by Enterprise Bank & Trust, Capital Impact Fund and JP Morgan Chase provided.

The new facility, Cloverleaf’s first in Illinois,is expected to create up to 150 new jobs and will allow for further expansion at the Farmland plant increasing food distribution capacity in a USDA-designated Food Desert. The NMTC loans not only provide Cloverleaf with low-cost financing, but has the potential to accelerate Cloverleaf’s long-term expansion plans, which would create up to 50 additional jobs at the Monmouth facility.

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