The U.S. Treasury Department announced today an award of $56 million in New Markets Tax Credits to MCDC. MCDC was one of 99 organizations from 27 states to receive an allocation. Two hundred and fifty organizations applied for the funding, requesting over $23.4 billion in tax credits. MCDC’s award was the largest among organizations serving one state. MCDC will use the credits to provide innovative business, real estate and clean energy financing in low-income census tracts throughout the state.

The New Markets Tax Credit program is a federal tax credit tool that provides incentives for private investment in building projects that help revitalize low-income areas. Prior to 2008, the program had been used primarily in larger urban areas. Due to changes in the program, spearheaded by Senator Baucus in 2007, a portion of the tax credits were required to be invested in rural states. Funding for the program was in doubt with the uncertainty of the Tax Bill that passed Congress in December. That bill extended funding for the program for 2010 and 2011. Both Senators Baucus and Tester voted for passage of the bill.

“I’m so proud of the ways Montanans have used their own ingenuity and the tools provided by the New Markets Tax Credit program to create new jobs, revitalize their communities and make Montana an even better place to live, work and raise a family,” said Senator Max Baucus. “As Chairman of the Senate Finance Committee, I’ve had to fight hard to see that rural areas would get a fair shake from the New Market Tax Credits program. I’m so pleased to see the way MCDC, its partners and hard-working Montanans have teamed up to get really creative about investing in our communities and creating jobs.”

This is MCDC’s second New Market Tax Credit Allocation, and the only Montana award out of $3.5 billion awarded across the country. Of the 99 awards, MCDC received the 11th largest allocation. “The Montana Community Development Corporation’s commitment to making smart investments in the places that need them the most helps strengthen every corner of our state. It is clear that common sense projects like this will be key as we work together to create good-paying jobs throughout Montana,” said Senator Jon Tester. “This is an important tool we have to create jobs and rebuild Montana’s economy.”

David Glaser, President of MCDC, can wait to get started. “Our previous tax credit projects brought really exciting projects to Montana communities that were in need of a jumpstart. With this round of tax credits we will be able to do even more for low-income communities across the state. ”

In 2008, MCDC received a $40 million tax credit allocation. Within 18 months, Butte, Bozeman, Helena and Missoula had major construction projects underway. The projects promptly created more than 500 construction jobs in an extremely difficult economy and permanent jobs were quick to follow. Over a ten-year period the projects will have created more than 400 permanent jobs with a total of more than $22 million in wages. Economic impact of these four projects – direct, indirect and induced impacts of both the construction phase and through 10 years of operations – will total more than $71 million.

This year’s award of tax credits is meant to continue the pattern of boosting the economy in low-income and rural places in Montana. The tax credits act as incentive for private investment into areas and projects that are typically difficult to finance because of where they are located, and because of the lack of sufficient debt financing. Glaser says that the first project in a low-income or blighted area is often the hardest project to start, but when that first building goes up, others follow. “For example, once the renovation of the Historic Sears Building in Butte got underway, several new businesses opened and other projects came together just steps away,” he said.

                        
Projects financed with MCDC’s previous award of tax credits have exceeded expectations. The Historic Sears Building in Butte, along with the Town & Country Foods grocery store in Bozeman and a health and wellness facility in Helena all received national awards for their innovative use of New Markets Tax Credits.

Glaser said MCDC’s experience working with other economic development agencies and community banks, like Glacier Banks, made it a serious contender to receive a sizeable amount of the tax credit allocation. MCDC will use the $56 million tax credit allocation to fund rural main street projects involving downtown revitalization, redevelopment of vacant facilities, health & wellness projects and clean energy projects.