Seattle Investment Fund LLC
WHO WE ARE
Welcome to Seattle Investment Fund LLC. We are a limited liability company created by the City of Seattle to help create a robust economy and broadly shared prosperity through investments of New Markets Tax Credits.
The Seattle Investment Fund LLC (SIF) is a limited liability company created by the City of Seattle to bring New Markets Tax Credit (NMTC) financing to economically distressed communities in Seattle. Administered through the City of Seattle's Office of Economic Development (OED), SIF strives to create healthy, vibrant, mixed-income communities that benefit all residents. Since SIF was formed in 2008, the federal Treasury Department has awarded it the authority to use New Markets Tax Credits on $79 million worth of business and real estate investments. This has been used to create more than $240 million of developments that strengthen human capital and commercial and cultural infrastructure in Seattle's low income communities.
The Seattle City Council authorized the establishment of a five-person Investment Committee to approve SIF's investment decisions, including the approval of all projects using NMTCs. The following members have been appointed by the Mayor and confirmed by City Council:
- Deputy Mayor Kate Joncas, Investment Committee Chair, a designated representative of the Mayor
- Seattle City Councilmember Lisa Herbold, Investment Committee Vice Chair, as Chair of the Council's Civil Rights, Utilities, Economic Development, and Arts Committee
- Sue Taoka, Executive Vice President, Craft3
- M.A. Leonard, Vice President and Pacific Northwest Market Leader, Enterprise Community Partners
- Barry Blanton, Principal at Blanton Turner, a member of SIF's Advisory Board
The Seattle City Council authorized the establishment of a seven-person Advisory Board to provide input to SIF and the Investment Committee regarding projects that have applied for NMTC funding and other information in the implementation of the NMTC program. The Advisory Board helps ensure that the SIF maintains accountability to low-income communities that will be served by the NMTC program. The following members have been appointed by the Mayor and confirmed by City Council:
- Johnny Bianchi, Principal, B&G Machine
- Barry Blanton, Principal, Blanton Turner
- Shaiza Damji, Managing Director, 360 Hotel Group
- Derryl Durden, President, East Union Investors
- Vu Le, Executive Director, Rainier Valley Corps
- Tam Nguyen, Owner, Tamarind Tree and Long Provincial Restaurants
- Tony To, Executive Director, HomeSight
HOW WE INVEST
The federal New Markets Tax Credit (NMTC) program provides a 39% credit against federal income taxes for business and real estate investments located in low-income areas. The tax credit is claimed over a seven year period and is provided to a tax credit investor in exchange for equity investment in a project. NMTCs can only be distributed by approved community development entities that have obtained tax credits through a national competitive application process with the U.S. Department of Treasury. The City of Seattle's Office of Economic Development (OED) created the Seattle Investment Fund LLC (SIF) to apply for NMTCs which are in turn distributed to private investors who provide equity and low-cost financing for business and real estate projects located in eligible census tracts.
The following are examples of the types of projects financed with NMTCs:
- Business owner-occupied property undergoing expansion and/or large equipment purchase
- Commercial real estate development that includes space for neighborhood retail businesses and/or office space
- Mixed-use projects with at least 20% of the project revenue coming from non-residential sources
- Community facilities
- Geographic Eligibility
- Minimum eligibility: NMTC projects must be located in census tracts meeting minimum criteria set by the federal government regarding poverty and resident income data.
- Areas of deeper economic distress: beyond minimum eligibility, SIF will give strong preference to projects located in areas of deeper economic distress regarding poverty, resident income and unemployment data. SIF has made a commitment to the federal government to allocate the bulk of its NMTC allocation in such deeper distress areas.
- Click here to access an Interactive New Markets Tax Credits mapping tool, provided by CohnReznick, a national accounting, tax and business advisory firm.
- Project Readiness
- Evidence is submitted to confirm that the project's proposed use of NMTC proceeds is feasible and that the project can be completed within the proposed timeline.
- The Investment Committee will not consider proposed projects until SIF has obtained letters of interest from the lenders/NMTC investors needed to finance the transaction
- Project Type and Size
- Real estate or business projects with at least 20% non-residential income.
- Projects with development and acquisition costs of at least $10 million.
- Public Benefits
Priority will be given to projects that achieve one or more of the following economic development benefits:
- Create or retain permanent jobs;
- Increase the availability of goods and services needed by the neighborhood;
- Serve as an anchor for future economic development in the immediate neighborhood;
- Enhance the local tax base through increased sales and/or property taxes from future project operations;
- Include energy efficient building or process improvements; and/or
- Increase the amount of affordable housing (i.e. housing serving households at 50% - 80% of median income) available for nearby residents
Financial Benefits to Projects
- Interest-only loans for seven years
- Up to 30% of NMTC financing is permanent equity that does not need to be repaid
- Hypothetical example of how NMTCs benefit a $10 million project
- SIF distributes NMTCs to an eligible project
- Project uses NMTCs to attract $10 million in private financing, including $7 million in loans, grants, and project owner equity and $3 million in permanent equity from NMTC investors
- $3 million permanent equity does not need to be repaid
HOW TO APPLY
Download Seattle Investment Fund LLC Project Intake Form (DOC)
After completing the intake form, email to AJ Cari at email@example.com. For questions, call 206-684-0133.