I Am Empowered - I am the National Urban League

Urban League Stonehenge New Markets Tax Credit Partnership

On February 23, 2012, the Community Development Financial Institutions Fund (CDFI Fund) announced that Stonehenge Community Development, LLC in partnership with the National Urban League received $85 million in New Market Tax Credit allocation for use in 2012. We were one of the 70 community development entities (CDEs) had been selected to receive allocations of New Markets Tax Credits (NMTCs) through the 2011 round of the New Markets Tax Credit Program (NMTC Program). The New Market Tax Credit attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs).
 
These 70 CDEs are authorized to issue to their investors a combined total of $3.6231 billion in equity for which NMTCs can be claimed. In the nine rounds to date, the CDFI Fund has made 664 allocation awards totaling $33 billion in tax credit authority, including $3 billion in Recovery Act awards and $1 billion that was specifically set aside for recovery and redevelopment in the wake of Hurricane Katrina.
The strategic alliance between National Urban League and Stonehenge Community Development has led to the successful receipt of $420.5mm in total federal NMTC allocations over the past 7 years prior to the new $85 million allocation. Thus far, $385mm has been deployed and invested in over 35 transactions in 14 states. These transactions have created over 5,000 new jobs. These investments range in size from $3mm to $25mm.
 
Investments are made based on the following criteria:

• Small business and non- profit community service businesses that have significant minority impact in areas of greater distress
• Significant focus placed on supporting minority owned businesses
• Targeted investments are in projects that are owner-occupied real estate and need working capital financing
• Investments are made in low income communities where the minority population is significant

The alliance has been successful in receiving and deploying $92mm in Florida NMTC and $104mm in Illinois NMTC for 19 Investments that are similar in nature to the ones described above. We have also been successful in receiving $30.757mm in NMTC allocations for business investments in the state of Kentucky. A key component of this initiative is the economic impact that these investments make on the communities in which the projects are located. The following provides highlights of the aforementioned economic impact:

• $285.38mm of federal NMTC allocation and $179.2mm of state allocation invested in 48 projects with an aggregate project size of $1.4 billion
• 10,010 Full Time jobs created/saved with an average wage of $38,50
• Approximately 7,000 construction jobs created
• 100% of funds invested in highly distressed census tracts with an average minority population of 69%
• Primary economic impact for every dollar of NMTC equity generated $19.27 of additional investment, representing consumer spending, business spending and construction expenditures
• Representative transactions include-
  • International Civil Rights Center and Museum- Greensboro, NC
  • Tulane University- New Orleans, LA
  • Clarian Health- Indianapolis, IN