June 11, 2014
Philadelphia Industrial Development Corporation (PIDC) announced the award of a $38 million in New Markets Tax Credit (NMTC) allocation from the U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund. PIDC was one of 87 organizations nationally to receive an award and the only organization specifically targeting projects in Philadelphia. Nationally, the U.S. Treasury Department’s CDFI Fund announced $3.5 billion in NMTC awards aimed at revitalizing low-income communities and increasing economic opportunity nationwide.
PIDC has now received three awards of NMTC allocation totaling $148 million. From allocations received in 2009 and 2012, PIDC has already invested $110 Million in nine development projects to eliminate blight, create jobs, and transform neighborhoods in Philadelphia. PIDC has utilized these credits to stimulate additional private sector investment leveraging $239 million in total project investment to date.
“This New Markets Tax Credit award of $38 million to PIDC is a great opportunity for Philadelphia to use federal tax credits to spur private investment in communities that need it,” said Mayor Michael A. Nutter. “The program helps create jobs and provides critical investments in low-income neighborhoods across the nation. This award to PIDC will help the City to attract greater private investment in our neighborhoods and to encourage developers to think creatively about new ideas for development projects.”
Established by Congress in December 2000, the New Markets Tax Credit Program helps economically distressed communities attract private investment capital by providing investors with a Federal tax credit. Investments made through the New Markets Tax Credit Program are used to finance businesses and real estate projects to breathe new life into neglected and underserved low-income communities. In Philadelphia’s most severely distressed neighborhoods, PIDC structures New Markets Tax Credit investments to fund development projects that energize communities, create jobs, and eliminate blight in the areas that need it most.
Philadelphia’s congressional delegation including U.S. Senators Robert P. Casey and Pat Toomey and U.S. Representatives Robert Brady, Chaka Fattah, and Allyson Y. Schwartz, have provided ongoing support for PIDC’s New Markets Tax Credit program.
“New Market Tax Credits are critical to reinvigorating Philadelphia communities,” said U.S. Senator Casey. “I have continuously supported this important program because of its proven track record of bringing jobs to Pennsylvania. I know PIDC will use this award to support projects that will better the lives of Philadelphians.”
“PIDC is delighted to have been selected again for an allocation of credits through this highly competitive application process,” said John Grady, President of PIDC. “We have seen the transformational impact New Markets Tax Credit projects can have and we look forward to deploying this new allocation of credits to attract additional investment and create jobs in the neighborhoods of Philadelphia that need it most.”
PIDC received a $50 million NMTC award in 2012 following a $60 million allocation in 2009. PIDC’s total NMTCs have leveraged more than $239 million in project financing and are projected to create over 950 jobs. Past projects include:
- Oxford Mills: a mixed-use redevelopment of a former factory complex into 36,000 square feet of affordable office space for education and
social service nonprofits and affordable living space for teaching professionals.
- Center for the Urban Child: a new two-story, 30,000 square foot medical services office building at St. Christopher’s Hospital for Children
- The Dana & David Dornsife Center for Neighborhood Partnerships: a historic rehabilitation of three buildings, which brings Drexel’s academic expertise into the neighborhood, engaging faculty and students with community residents in creative collaboration and shared problem solving. The Center will support neighborhood interests and needs ranging from health and wellness and workforce development, to education, the arts and home repair.
- NewCourtland LIFE Center: the new construction of a 15,700 square foot one-story senior health and wellness center on 1.5 acres of a five-acre former industrial brownfield site, which sat vacant for more than 20 years.
- University City Science Center: fitting out 71,000 square foot of lab and office space in the University City Science Center to provide lab and office space at below market rents and offer business incubation, support services and programming for entrepreneurs, start-ups and growing companies.
- Hilton Homewood Suites: the ground-up construction of a 108,000 square foot, 136-suite extended stay hotel located on an 11,000 square foot vacant parcel. The 10-story LEED Silver certified hotel provides a much needed affordable amenity for patients and users of the hospital and university institutions in the surrounding neighborhood.
- 600 North Broad Street: the mixed-use redevelopment of a former car dealership converted into a 97-unit apartment building and 39,000 square feet of commercial space.
- Schmidt’s Retail: the redevelopment of the Schmidt’s Brewery site in Northern Liberties to include a 51,000 square foot supermarket,
44,000 square foot of ground-level retail, and more than 300 new parking spaces. This project has resulted in the addition of more than 200 new permanent jobs and essential services to this neighborhood.
- Edison Square: the new construction of a 36,000 square foot shopping center at the former Edison Public High School building a 3.6 acre site that was vacant for over 10 years. The shopping center contains an 18,000 square foot grocery store and 18,000 square foot of in-line retail including general merchandise, apparel, and a restaurant.
PIDC recently held a workshop for How to Position Your Project for New Markets Tax Credits(NMTC). PIDC staff and its partners, Ryanne Shuey, PNC Bank; Kayla Gross and Jonathan Ades, CohnReznick; Mary Croft, Ballard Sphar; and Thibault Manekin, Seawall Development, each shared their experiences with using NMTC to help finance projects. After a brief NMTC 101, the group discussed positioning a project to unitlize a NMTC allocation and how deals come together from the financial modeling to the closing process. Additional discussion included challenges in securing all the sources in the capital stack and what makes a project ready to secure allocation. PIDC is committed to working with projects that will add value to Philadelphia’s neighborhoods.
If you have a project that you think may qualify for NMTC financing, please call Lawrence McComie at 215-496-8145 or Wendy Weiss at 215-46-8115.