Riviera Beach, FL May 4, 2013 – The Community Development Financial Institutions Fund (CDFI Fund), a division of the US Department of Treasury, announced on Wednesday April 24, 2013 awards for $3.5 billion in New Markets Tax Credit (NMTC) allocations. Among the winners of these coveted credits are The Kroger Co. and the Oakland Renaissance NMTC, Inc. T. Brown Consulting Group (TBCG) managed the submittal of applications for both entities.
Under the leadership of Tony Brown, President and CEO of TBCG, the companies each received a $20 million allocation, making both first time allocatees. The CDFI Fund reports just 10 of the 85 award recipients were first time winners, giving TBCG 20% of this highly select group of awardees. “The NMTC program is highly competitive. We pre-qualify our potential clients and give you a first-hand assessment of your qualifications. We offer no guarantees but our experience informs us of the traits of highly qualified applications. We will not take on new clients if our pre-qualification assessments cannot place you in a competitive pool. In the 2012 round, two of three of our clients’ applications were funded,” said Brown.
Kroger, one of the world’s largest retailers, will use its tax credit allocation to construct or renovate grocery stores to increase healthy food options in areas designated by the USDA as “food deserts” (low income areas lacking convenient access to grocery stores). The Oakland Renaissance has gained an important tool to finance real estate and small businesses after redevelopment agencies in California were stripped of their tax increment financing authority.
|States and Territories identified by CDFI Fund in 2012 that have received fewer dollars of Qualified Low Income Community Investments (QLICIs) in proportion to their statewide population residing in Low-Income Communities:
||Island Areas of the United States (American Samoa, Guam, Northern Mariana Islands, and US Virgin Islands)
In 2012, Brown saw the CDFI Fund make changes to the application process after advocating for two key changes: 1) He actively advocated for more tax credits in underserved states such as Florida (see box on right). Subsequently, the Fund added a question to allow CDEs to remark on their efforts to generate NMTC loan volume in these underserved areas.
2) Brown feels that the deployment threshold for CDEs re-applying is too low. An applicant previously funded can re-apply based on tax credits deployed or investors committed. Brown believes the “investor commitment” threshold favors large banks and other applicants that can self-fund their CDEs. “In 10 rounds of funding, and with a large pool of highly qualified applicants left unfunded, the CDFI Fund needs to change the threshold requirements and focus on tax credits deployed,” commented Brown who managed implementation of the NMTC program in 2001. “Instead of raising the bar for repeat allocatees, I have witnessed the Fund lowering the standard. It is time for them to focus on deployment and not lingering investor commitments. There are too many worthy applications unfunded for projects in distressed communities to continue to allow a pre-set number of CDEs to win year after year if their tax credits are delayed in being deployed,” advocated Brown.
For more information visit T. Brown Consulting Group at www.tbrownconsultinggrp.com