While the $3.5 billion allocation of community development funds to 99 organizations might seem generous, consider the demand: 250 organizations in 27 states requesting $23.5 billion in New Markets Tax Credit (NMTC) fund allocations.
Five Minnesota organizations were among the 99 to receive a portion of $3.5 billion in community redevelopment funds authorized through the federal government's eighth round of NMTC allocations.
The Treasury Department's Community Development Financial Institutions Fund has made 594 awards totaling $29.5 billion since it was established by Congress in December 2000.
Through the NMTC program, taxpayers receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs). Those investment must be used by the CDE "to provide capital for low-income communities, help finance community development projects, stimulate economic growth and create jobs," according to a press release from Community Reinvestment Fund (CRF), a CDE based in Downtown Minneapolis that received $77 million in NMTC funds this round.
"Industry estimates show that for every $1 gained by NMTCs, award recipients are able to leverage an average of $21 in additional investment from the private sector," states CRF. Though headquartered here, CRF serves mainly urban communities in six other states, as well. (See our story on
Baldinger Bakery's new facility for an example of how CRF uses its NMTC funds.)
Other Minnesota CDEs to receive funding include:
University Financial Corporation/Sunrise Community BanksHeadquartered in Saint Paul, Sunrise received $25 million. Comprising Franklin Bank, Park Midway Bank and University Bank, Sunrise's
"community stories" include Common Roots Caf�, Catalyst and Urban Homeworks. Sunrise will utilize its 2010 NMTC allocation to expand its existing investment to small and local businesses in highly distressed neighborhoods, to create small projects loan pools, and to finance energy savings retrofits for commercial buildings.
Local Initiatives Support Corporation (LISC) Headquartered in New York, LISC received $70 million in the latest round, and the organization has received a total allocation of $693 million in NMTC allocation since the program's inception--the largest in the country, according to Program Officer Tina Homstad. LISC's Twin Cities office has put NMTC funds into the Midtown Global Market and Plaza Verde projects in Minneapolis, among other local work.
Midwest Minnesota Community Development Corporation, based in Detroit Lakes, serves non-metro rural communities in Minnesota, North Dakota, South Dakota, and Wyoming. They received $74 million.
Portland, Oreg.-based National Community Fund I, LLC/Portland Family of Funds Holdings, Inc., which also serves Minnesota, received $77 million.
Sources: Community Reinvestment Fund, Local Initiatives Support Corporation, U.S. Department of Treasury