St. Louis wins $250 million in federal urban investment tax breaks
This article first appeared in the St. Louis Beacon, Oct. 30, 2009 - Four St. Louis development entities are sharing in $250 million in federal urban investment tax breaks awarded Friday.
In a joint release, U.S. Secretary of the Treasury Tim Geithner and U.S. Rep. William Lacy Clay announced the awards, which are part of $5 billion to be doled out to 90 recipients.
The St. Louis aid is from the new market tax credit programs and goes to the St. Louis Development Corp., Habitat for Humanity, McCormack-Baron-Salazar and US Bank.
Clay called the aid "tremendous news" for the city as well as the recipients.
"The new market tax credits, which are partially funded by the Recovery Act, are a key tool to help cities, and those groups and entities who build up our cities, to encourage private sector investment that creates jobs, transforms distressed neighborhoods and makes financing available for difficult projects in urban areas," Clay said in a statement.
The details of the awards, as provided by Clay's office:
- St. Louis Development Corp. (of St. Louis) for $65 million: The money will be used for "a variety of financial products with flexible structuring alternatives to meet the unique needs of each project," including "equity investments and below-market interest rate loans ranging from $500,000 to $15 million."
- Habitat for Humanity International for $50 million: The agency will use the money in St. Louis and St. Louis County, and elsewhere, o set up "favorable loan rates and terms'' and no-interest loans for the construction of "housing for low-income homeowners, built by the homeowners with assistance from volunteers."
- US Bank Community Development Entity for $95 million: The bank's development arm "will provide equity, equity-like debt and favorable loan rates and terms for real estate development and operating businesses. The target borrower will be a qualified business who will develop or rehabilitate commercial real estate as rental or owner occupied property."
- McCormack-Baron-Salazar Urban Initiatives for $40 million: The firm will use the money "to invest in low-income communities across the country, with a focus on developments that can accelerate revitalization by bringing jobs and economic activity back to these neighborhoods."
The new market tax credit program was set up by Congress in December 2000. The recipients can use the credit to pare down their federal income taxes "for making equity investments'' in qualified projects. The credits amount to 39 percent of the investment.