Three Louisiana-based community development entities received New Markets Tax Credits in the latest round of allocations announced today by the U.S. Treasury Department. Baton Rouge, however, is home to none of those organizations. They’re all in New Orleans.
That’s surprising because for the past 10 years—and most of the 15 years since the NMTC program was created by the Bill Clinton administration to encourage private investment in underserved communities—local investment firm Stonehenge Capital has been among the just 25% or so of applying entities to receive the coveted allocations. This year, it didn’t make the list.
“While we are disappointed in not being awarded an allocation this round, the CDFI Fund believes in the strategy we have deployed over the years,” says Stonehenge President Tom Adamek. “I’m not really sure yet why certain firms did not receive awards. … I need to do some more digging.”
Also unclear is how many other Baton Rouge-based organizations, if any, applied for allocations in 2018, which totaled some $3.4 billion and went to 73 entities in 35 states, D.C. and Puerto Rico.
Next year, Build Baton Rouge, East Baton Rouge Parish’s redevelopment authority, hopes to be on that list. When the 2019 applications come out this summer, BBR President and CEO Chris Tyson says his agency will apply for credits that could be used to help with the redevelopment of Plank Road.
As for this year’s crop of allocations, Tyson says without knowing which entities, if any, applied for tax credits and what projects they may have cited in their applications as potential targets of investments, it’s hard to read too much into the award decisions. But he says in general, Baton Rouge doesn’t do enough to leverage opportunities and take advantage of such generous federal programs.
“I don’t think we are as aggressive on the national scene as we should be, whether we’re talking about big federal grants, New Markets Tax Credits, or whatever,” Tyson says. “I don’t think we do enough of that to make sure we show up when people are receiving piles of applications from other cities around the country.”
Under the NMTC program, certified Community Development Entities, or CDEs, that receive credits sell them to investors and use the funds to make debt or equity investments in projects located in qualified, low-income communities. Some of those investments are in existing businesses, some are in real estate projects.
The three New Orleans CDEs received a total of $180 million in allocations. They include: AMCREF Community Capital, $70 million, Capital One Community Renewal Fund, $60 million, and Enhanced Community Development Fund, $50 million.