Kerry, Kirk Announce Three Massachusetts Institutions to Receive $230 Million for Community Development Initiatives

October 30, 2009 -- BOSTON – Senators John Kerry and Paul Kirk today announced that three Massachusetts organizations will receive a total of $230 million under the 2009 round of the New Markets Tax Credit (NMTC) Program. The funding is administered through the U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund which aims to expand the capacity of financial institutions to provide capital, credit and financial services to underserved populations and communities in Massachusetts and throughout the nation.

“This substantial investment is a lifeline for low-income communities throughout our state – it means help with jobs, housing, and infrastructure. It will allow these organizations on the front lines to continue providing high-impact, localized service that will get results. I’m grateful to Secretary Geithner and CDFI Fund Director Donna J. Gambrell for continuing to invest in Massachusetts families,” said Senator Kerry.

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“As Massachusetts continues on the road to economic recovery, these tax credits offer a significant incentive to corporations to invest in low-income areas,” said Senator Paul G. Kirk, Jr. “The new jobs and community development that will result from these investments will benefits families hit hardest by the economic recession and lay the foundation for long-term economic growth in the Commonwealth.”

The following Massachusetts institutions will receive funding:

Boston Community Capital, Inc. $85,000,000
Boston Community Capital, Inc. (BCC) will use its NMTC allocated to: (i) increase its current lending capacity and offer better rates and terms to borrowers; (ii) increase the volume of investments made in high-impact, primarily rural businesses; and (iii) grow new lines of business, including a residential foreclosure prevention and neighborhood stabilization program. BCC will focus in particular on projects that are likely to be located in rural areas, including forest products, renewable energy and consumer distribution businesses. The NMTC allocation will enable BCC to offer subordinated debt products with significantly reduced interest rates.

MassDevelopment New Markets, LLC (Boston) $55,000,000
MassDevelopment New Markets LLC (MDNM) will use its NMTC allocation to provide: (i) senior loans to non real-estate businesses for the acquisition/rehabilitation of operating facilities; and (ii) senior and subordinated debt to real estate businesses including mixed use developments, light industrial and commercial properties as well as community facilities and medical/health centers. Senior and subordinated debt will have below market interest rates as well as more flexible underwriting terms. Through redevelopment of key community properties and lending to businesses, MDNM will help to revitalize blighted properties, encourage small business expansion and create quality jobs.

Massachusetts Housing Investment Corporation (Boston) $90,000,000
(This award was made possible through the American Recovery and Reinvestment Act.)
Massachusetts Housing Investment Corporation (MHIC) NE New Markets CDE II LLC targets the most disadvantaged communities – both urban and rural – in the six New England states. The financing will be targeted to those projects and businesses in distressed communities that will maximize job creation, encourage private investment, initiate or accelerate community revitalization and increase economic opportunity for low-income community residents. MHIC CDE will provide a package of financing (debt, subordinate debate and/or equity) to fill feasibility gaps of 22 to 37 percent of project costs with patient capital.

Nationwide, a total of $5 billion in New Markets Tax Credits were awarded.

The NMTC Program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). These CDEs offer credits to taxable investors in exchange for stock or a capital interest in the CDE. Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities - investments that will help finance community development projects, stimulate economic growth and create jobs.

For more information please visit www.cdfifund.gov.

Source: Senator John Kerry