A Lancaster-based nonprofit lender has given a major boost to the Lancaster Chamber of Commerce & Industry’s new headquarters.
Community First Fund said Monday it is awarding $6.25 million in federal New Markets Tax Credits toward financing the just-finished renovation at 115 E. King St.
“We saw this as a high-impact project,” said Dan Betancourt, Community First’s president and CEO.
This is the third time Community First has awarded New Markets Tax Credits in Lancaster and the first award made downtown.
In practical terms, Betancourt said, the tax credits have a net present value of a little over $1 million. They will offset that amount of the project cost, which was about $7.9 million.
“We couldn’t be more thrilled,” said Tom Baldrige, president and CEO of the chamber.
The funding comes from the $45 million in tax credits Community First was allocated late last year.
More announcements will be made in coming weeks regarding the remainder, Betancourt said.
The New Markets Tax Credit program is designed to help economically distressed communities attract business development.
The credits will stretch over seven years. The chamber is expected to roll over its construction loan from BB&T into a mortgage financed by Fulton Bank. Fulton will be able to apply the credits to its tax liabilities.
The exact details remain to be worked out. Among other things, the chamber launched a capital campaign, which is ongoing, to underwrite the renovation.
It’s possible between that and the tax credits, the chamber could end up with no debt on the project.
It is more likely that it will still have a mortgage, but with the tax credits, it would be significantly smaller, freeing up resources for the chamber’s business development programs.
Betancourt said 115 E. King St. will bring more foot traffic to neighboring shops and restaurants and potentially catalyze more development.
That will further help a block Community First has worked on for many years and that has seen more than $15 million in recent investment — in Historic East Side Suites and Excelsior Hall as well as various smaller projects.
“Extending downtown by another block was important,” Betancourt said.
Another big factor for Community First was 115 E. King St.’s potential to make local economic development efforts more effective.
Besides the chamber, there are five tenants: Economic Development Co. of Lancaster County, Lancaster City Alliance, Central Penn Business Group on Health, Leadership Lancaster and, in a couple of months, Junior Achievement of South Central PA.
Putting them under one roof creates operational efficiencies and makes it easier to collaborate, Baldrige said.
That, in turn, ties in with the chamber’s refocused mission. Early this year, it became the first chamber in the country to drop the traditional membership model.
That move was made in part so the chamber could better help “those most disenfranchised, for whatever reason,” Baldrige, who is a member of the mayor’s Poverty Commission, said at the time.
That new direction “is enhanced by what Community First Fund affords us” through the tax credits, he said Monday. “In so many ways, it’s not business as usual.”
The chamber moved from Southern Market Center earlier this month. It had looked at sites across the county, but members recognized the value of remaining in Lancaster’s central business district, Baldrige said.
Other city projects, including Lancaster Arts Hotel, Zamagias Properties’ Steeple View Lofts and Keppel Building renovations and Meeder Development’s Historic East Side Suites, have received them through other nonprofit lenders.