Federal tax credit given to St. Louis Development Corp.
St. Louis, MO/December 5, 2016 (STLRealEstate.News) The St. Louis Development Corp. this week announced they will be receiving a $75 million allocation of federal New Markets Tax Credits from the Treasury Department this year. The announcement, which went live Thursday, was absolutely incredible news for the St. Louis-based corporation.
Also among recipients in the latest round of allocations were the MBS Urban Initiatives CDE, an entity that is part of the St. Louis-based McCormack Baron Salazar, and Advantage Capital Community Development Fund. Advantage Capital, a New Orleans-based business, has a big office in the center of Clayton. The Treasury Department was feeling even more generous with Advantage and awarded them $80 million in New Markets. MBS Urban Initiatives came in at a $75 allocation, just like the St. Louis Development Corp.
New Markets are incredible tools for businesses looking to expand their reach into new markets. These specific credits are used as an incentive to draw private investment into businesses and real estate projects in qualifying census tracts that cover much of St. Louis and part of St Louis County. These awarded credits, amazingly, do not have to be invested back into the St. Louis region, although SLDC typically only awards entities that have future or ongoing projects planned for the city. These New Market credits position themselves as a popular form of gap financing for real estate projects and of capital for growing small businesses.
These tax credits will then raise 39 cents on the dollar in equity and that investment is allocated to spread over seven years.
In total, the Treasury Department’s New Markets tax credit announcements awarded close to $7 billion in tax credits to 120 organizations in 36 states, the District of Columbia and Puerto Rico. This was the largest award round ever approved since the program began in 2001, the department reported.
Contributing Editor: Alexandra R. Fasulo
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