U.S. Bank Awarded $100 Million of New Markets Tax Credit Allocation Authority
February 24 2012 - 11:48AM
Business Wire
USBCDE, LLC, U.S. Bank’s Community Development Entity (CDE), has
been awarded $100 million of New Markets Tax Credit (NMTC)
allocation authority from the U.S. Department of the Treasury. With
this award, U.S. Bank will continue to provide equity, equity-like
debt and favorable loan rates and terms to operating businesses and
developers of real estate in distressed and underserved communities
throughout the nation.
The allocation award is part of a $3.5 billion NMTC package
announced yesterday by the Treasury’s Community Development
Financial Institutions Fund (CDFI Fund). Since the inception of the
NMTC Program, the CDFI Fund has made 664 awards—totaling $33
billion in tax credit allocation authority.
Established by Congress in 2000 to increase private investments
in underserved areas, the NMTC Program leverages public and private
sources to fill community development financing shortfalls. The
equity raised through the tax credit program provides financing for
companies that lack access to traditional financing and efficiently
drives investment into communities with high rates of poverty and
unemployment by leveraging financing from other sources. The result
is a program which also stimulates economic growth, supports job
creation and fosters the development of community services.
Zack Boyers, chairman and chief executive officer of U.S.
Bancorp Community Development Corporation (USBCDC), said, “As a
community partner, we are supporting high impact developments and
businesses efficiently and at a low cost to borrowers.” He noted
the NMTC Program has been critical in the economic recovery, as
many investments have been the impetus for further development.
“The New Markets Tax Credit Program has had a catalytic effect in
creating jobs and transforming many inner cities and small towns
throughout America,” said Boyers.
Prior to today's announcement, since 2006, U.S. Bank’s CDE had
received four allocations totaling $435 million, 96% of which has
been utilized to date. The allocations have helped to finance 62
community development initiatives in 49 cities and 27 states across
the country. Some of the diverse businesses and developments that
U.S. Bank’s CDE has been able to finance with its allocation awards
include the:
- Retention and creation of more than 900
full-time jobs in manufacturing/industrial facilities in Keokuk,
IA; Albuquerque, NM; Herrin, IL; Bessemer, NC; and Oconto Falls,
WI.
- Construction of a grocery store in
Pagedale, MO, an underserved west St. Louis suburb that had lacked
access to basic retail amenities. The store now serves as an anchor
for additional revitalization activities.
- Renovation of the historic Argonaut
Building in Detroit into the home of the College for Creative
Studies, which houses a visual arts college and provides 3,000
local school children a year with arts programming.
- Development of a LEED-Silver open-air
farmers’ market in the highly distressed, low-income Mission
District of Tucson, AZ. The completed market is home to 18 local
and regional small businesses including artisan food vendors,
restaurants, and farmers who lease their spaces at below market
rates.
“These community developments would simply not have occurred
without the benefits provided by tax credit financing,” said
Boyers.
Besides financing NMTC projects through its Community
Development Entity, U.S. Bank serves as one of the most active NMTC
investors in the country, both in terms of dollars invested and
businesses financed. U.S. Bank’s Community Development Corporation,
USBCDC, has made more than $3 billion of NMTC equity committed in
support of businesses and real estate development across the United
States.
About the New Markets Tax Credit ProgramThe NMTC Program
encourages investment of private capital in designated urban and
rural low-income communities, allowing taxpaying investors to
receive a credit against federal income taxes for making qualified
equity investments in designated Community Development Entities.
The CDEs in turn, invest the capital raised into real estate
developments and businesses in low-income communities. The credit
provided to the investor totals 39 percent of the investment in a
CDE and is claimed over a seven-year credit allowance period.
About U.S. Bancorp Community Development CorporationU.S.
Bancorp Community Development Corporation (USBCDC) finances
community development initiatives through the use of New Markets,
Historic, Low-Income Housing, and renewable energy Investment Tax
Credits. USBCDC is the nation’s most active New Markets Tax Credit
investor, both in dollars invested and transactions closed. These
equity investments have provided much needed revitalization and new
resources to communities throughout the country. USBCDC is a
subsidiary of U.S. Bank and U.S. Bancorp (NYSE: USB).
About U.S. BankU.S. Bancorp (NYSE: USB), with $340
billion in assets as of Dec. 31, 2011, is the parent company of
U.S. Bank, the fifth-largest commercial bank in the United States.
The company operates 3,085 banking offices in 25 states and 5,053
ATMs, and provides a comprehensive line of banking, brokerage,
insurance, investment, mortgage, trust and payment services
products to consumers, businesses and institutions. U.S. Bancorp
and its employees are dedicated to improving the communities they
serve, for which the company earned the 2011 Spirit of America
Award, the highest honor bestowed on a company by United Way. Visit
U.S. Bancorp on the web at www.usbank.com.
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