Ed Murray, Mayor
SUBJECT: Seattle receives $28 million New Markets Tax Credits
6/11/2014 11:00:00 AM
Jesse Gilliam, Councilmember Sally J. Clark’s Office, (206) 684-8802
Jason Kelly (206) 684-8379
Joe Mirabella (206)684-4008
Seattle receives $28 million New Markets Tax Credits
Credits leverage investment in under-invested neighborhoods
SEATTLE - Mayor Ed Murray announced today that the city's Office of Economic Development has received a $28 million New Markets Tax Credit allocation from the US Department of Treasury Community Development Financial Institutions Fund (CDFI) to leverage additional financing in projects located in under-invested communities in Seattle.
"This allocation gives the city an additional tool to work with developers to bring community benefit to neighborhoods in Seattle," said Mayor Ed Murray. "These tax credits will help spur additional private investment in neighborhoods that haven't seen much investment since the recession. My appreciation goes out to Senators Maria Cantwell and Patty Murray for their ongoing support of this tax credit program and the city's economic development work."
New Markets Tax Credits ("NMTCs") attract private investment to important projects benefitting low-income neighborhoods. These developments and business expansions create healthy, vibrant, mixed-income neighborhoods, and provide residents with job opportunities, quality health care and human services, arts and cultural opportunities, and affordable housing.
"We work hard to ensure that NMTC projects create good paying jobs for Seattle residents," said Councilmember Sally J. Clark, chair of the Committee on Housing Affordability, Human Services, and Economic Resiliency Committee, and co-chair of the Seattle Investment Fund LLC. "Projects like Stadium Place, Retail Lockbox and INSCAPE have put people to work and benefited Pioneer Square, South Downtown and the Central Area. I look forward to expanding these benefits to our city with additional projects thanks to this new allocation."
The city's Office of Economic Development created the Seattle Investment Fund LLC (SIF) in 2008 to apply for NMTCs from the US Department of Treasury CDFI with the goal of attracting financing for catalytic business and real estate projects. With this new allocation, the federal government has awarded SIF with the authority to distribute federal tax credits on a total of $79 million worth of business and real estate investments, of which the $51 million worth of credits have already been distributed.
"This is a rare and powerful financial tool that, when combined with local control over its distribution, will enable us to create new jobs and give life to new commercial projects in Seattle's economically distressed neighborhoods," said Steve Johnson, director of the city's Office of Economic Development.
The Office of Economic Development has experience using these tax credits in the successful development of prior commercial and business projects, such as:
- Stadium Place: The city's NMTCs investment resulted in $3.3 million in equity and $9.6 million in debt financing for the creation of the West Coast's largest transit-oriented development in the Pioneer Square neighborhood. This transformative neighborhood project is a mixed-use development including 19,000 square feet of retail, and 74 residential units, and is part of a larger development with over 718 units of mixed-income housing and 400,000 of office and 35,000 of retail. Upon lease-up, the project will have created or retained 38 direct permanent jobs and created 240 direct construction jobs. (Completed August, 2013)
- Retail Lockbox: The city's NMTCs investment resulted in $1.5 million in equity and $4.9 million in debt financing for the rehabilitation of a historic building formerly owned by the Urban League of Metropolitan Seattle. The tax credits allowed Retail Lockbox to acquire and rehabilitate the site, creating 35,000 square feet of office space, consolidate their offices, and keep the Urban League operating in the same location. The project not only brought catalytic development to the Central District, but it also created or retained 100 direct permanent jobs, and created 30 direct construction jobs. (Completed July, 2013)
- Bullitt Center: The city's NMTCs investment resulted in $1.9 million in equity and $7.3 million in debt financing to assist the development of the nation's first office building to achieve Living Building standards, the most rigorous sustainable development standard. The six-story, 50,000-square-foot office building created or retained 141 direct permanent jobs, and created 94 direct construction jobs that provided opportunities to WMBEs, pre-apprenticeships and apprenticeships. The building is an anchor for both Capitol Hill's eco-district, and future economic development through onsite green building training programs. (Completed April, 2013)
- INSCAPE building: The city's NMTCs investment resulted in $1.9 million in equity and $7.2 million in debt financing to assist the redevelopment of the historic INS building to create affordable space for local artists and strengthen the connection between the Pioneer Square and Chinatown/International District neighborhoods. The project created or retained over 100 permanent jobs while providing affordable commercial artist space, and preserving the history of the building's past in conjunction with the Wing Luke Asian Museum. (Completed March, 2013)
- Pike Place Market: The city's investment of NMTCs to the renovation project resulted in $1.8 million in equity and $7.3 million in debt financing to help finance tenant improvements and temporary relocation assistance for more than 60 small businesses impacted by the Market's significant infrastructure renovations. (Completed March, 2012)
"The NMTCs were a critical piece to the funding of the extensive Pike Place Market renovations, and directly supported over 60 small businesses, providing tenant improvements and financial assistance that allowed them to survive during the construction," said Ben Franz-Knight, executive director of the Pike Place Market Preservation &Development Authority.
For more information about the New Markets Tax Credits, please contact AJ Cari, New Markets Tax Credits Asset Manager in the city's Office of Economic Development at 206-684-0133 or firstname.lastname@example.org, or visit the Seattle Investment Fund LLC website.
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