Millions for low-income projects
Millions for low-income projects BY BERNARD HARRIS, Staff Writer
Four years ago, a local developer announced plans to transform a former bank building in Columbia into an upscale boutique hotel.
The idea was good, but the funding for the renovation just didn't come together, recalled borough Mayor Leo Lutz.
"The developer just couldn't get that boost," Lutz said of the last of the private-sector investment needed to move the project forward.
If it had the benefit of federal tax credits to spur private-sector lenders, that may have made the difference for that project and several others in the riverfront town, the mayor said.
"So many times we've had developers come in with ideas, but they need that little bit of help to get them over the line," Lutz said at a press conference Tuesday.
Leaders of the Community First Fund announced they will receive $15 million in federal tax credits for use for projects in Columbia and Lancaster city.
"If I said this was a game-changer for Central Pennsylvania, that would be an understatement," said Daniel Betancourt, president and chief executive officer of the non-profit lender.
The Community First Fund was one of only about five new recipients nationwide announced for the U.S. Treasury Department's New Market Tax Credit program, Betancourt said. Now that it has been selected, he hopes to be able to reapply annually and be able to distribute $50 million in tax credits over the next five years.
With the initial funding, Betancourt anticipates being able to award about $5 million in tax credits to three projects.
The selected projects will be those seen as being the most "shovel ready" and those which the Community First Fund believes will have the greatest impact in the community.
The New Market Tax Credit program limits the awards to projects where there is concentrations of at least 20 percent poverty. In Lancaster County, only Columbia and most of Lancaster city qualify, Betancourt said.
One possible recipient cited was Conestoga Plaza, a planned retail development on the city's South Duke Street by the Spanish American Civic Association.
"If all the dots connect" SACA will be able to use the tax credits to lure private-sector lenders to invest in the 30,000-square-foot commercial space, said Carlos Graupera, SACA executive director.
The project is being constructed on the site of a former nightclub where fights were frequent and on a former scrap yard. A community grocery and other shops there will expand existing neighborhood business and attract new businesses, creating about 80 jobs in the impoverished area, Graupera said.
Yet, he said, the development cost will be higher than building a shopping center in a rural field.
"Without some sort of assistance, these kinds of projects just can't be done," he said.
Previously, New Market Tax Credits were used to fund three projects in Lancaster city: the Lancaster Arts Hotel, Historic East Side Suites and Steeple View Lofts, a recently completed apartment project for residents age 55 and older.
Along with Lancaster and Columbia, Betancourt said projects in York city, Reading and Harrisburg will also be considered for funding. The Community First Fund serves the region, he said.
The New Market program works by allowing individual and corporate taxpayers to receive a partial credit against federal income taxes for making equity investments in community development projects. Credits can be claimed over seven years.
Since its start in 2000, the New Market program has generated more than $8 in private investment for every $1 invested by the federal government, the U.S. Treasury reported.
nCommunity First Fund receives $15 million in federal tax credits for projects in Lancaster city and Columbia.