New York, July 27, 2020 (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.
This allocation marks the third New Market Tax Credit award received by the NYCRC. In 2016, the NYCRC received an initial award of $45 million and in 2018, it secured a second award of $20 million. The $115 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low-income communities often have difficulty attracting investment, as evidenced by vacant commercial properties, outdated manufacturing facilities, and inadequate access to education and healthcare service providers. 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 third New Market Tax Credit allocation will provide financing to community development projects that typically face financing challenges, such as health care centers, community facilities, industrial space, grocery stores, and small business retailers located in underserved areas of New York City.
“We are very pleased to receive this third allocation from the U.S. Department of Treasury,” said George Olsen, NYCRC Managing Principal. “This new $50 million New Market Tax Credit award will help spur economic growth and job creation where they are most needed 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 76 organizations receiving awards were selected from a pool of 206 applicants across the nation and will receive a total of $3.55 billion in New Market Tax Credit awards. To receive a New Market Tax Credit allocation award from the U.S. Department of Treasury, the NYCRC was required to demonstrate a mission and track record of providing investment capital for low income communities.
Over the past 12 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.
“We are proud of our 12-year track record of providing capital for economic development projects throughout New York City,” said Paul Levinsohn, NYCRC Managing Principal. “This third allocation from the U.S. Department of Treasury will allow us to expand our capacity and mission to jump-start job creation in areas of need across the city.”
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.
The NYCRC announced the completion of project construction in 19 of its 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;
- 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 5,000 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 permits individual and corporate taxpayers to receive a non-fundable tax credit against federal income taxes for making equity investments in vehicles known as Community Development Entities (CDEs). CDEs that receive tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. The CDEs in turn use the capital raised to make investments in low-income communities. Since 2001, New Market Tax Credits have generated more than $52.5 billion in investments in low-income communities and businesses, resulting in the creation and retention of more than 500,000 jobs, and the construction or rehabilitation of more than 164 million square feet of commercial real estate.
NYCR-CDE, LLC is an Equal Opportunity Provider.
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