WASHINGTON, D.C. — New federal resources have been awarded to two Cincinnati economic development agencies. U.S. Sen. Sherrod Brown (D-OH) today announced that the Cincinnati Development Fund was awarded a $43.35 million through the U.S. Treasury Department’s Community Financial Development Institution’s New Market Tax Credit (NMTC) program. The Cincinnati New Markets Fund was awarded $45 million. NMTC allocates credits to Community Development Entities in order to attract investment in economic development projects in low-income regions that would otherwise suffer from a lack of financing.
“The Cincinnati Development Fund and the Cincinnati New Markets Fund have proven track records in helping to leverage private and public financing in order to create jobs and promote economic growth,” Brown said. “This tax credit will help build upon Ohio’s existing strengths and bring new economic growth to the region.”
The NMTC Program was established in 2000 with the goal of spurring revitalization efforts in low-income American communities. NMTC provides tax credit incentives to Community Development Entities (CDE) with a primary mission of investing in low-income communities. Under the program, CDEs apply to the U.S. Treasury Department for the authority to raise a certain amount of capital, also known as Qualified Equity Investments (QEI), from investors. Awardees are then given a tax credit that equals 39 percent of their investment output over the span of seven years: five percent in each of the first three years and six percent in the final four years.
Last year, Brown helped pass legislation that would extend the New Markets Tax Credit (NMTC), which incentivizes community developers to invest in low income areas. The NMTC was included in the Senate Finance Committee’s tax extenders package that passed out of committee in 2014. At that time, Brown released a list of Ohio communities that have benefited from the NMTC and could be eligible for future funding if the tax credit extension became law.