INDIANAPOLIS, Ind.-- Indianapolis secured $55 million in federal tax credits to encourage investment and development in the city's at-risk and low income neighborhoods.
The New Markets Tax Credits (NMTC) are from the U.S. Department of Treasury to assist with transformative neighborhood projects. In a press release, the city states it will use the NMTC award to provide gap coverage financing for developments designed to spark development and create jobs in distressed neighborhoods.
At-risk neighborhoods that qualify are determined by several factors based on Census data. They include income and poverty levels, as well as crime rates.
“It means jobs,” said Mayor Joe Hogsett. “It means new housing, it means new community opportunities. The true impact is in the lives that are changed as a result.”
There are some limitations to the program.
Congress established the NMTC program back in 2000, permitting individual and corporate tax payers to receive non-refundable tax credits against federal income taxes when they make financial investments in Community Development Entities (CDE). The CDEs go on to them provide loans, financial counseling and investments in low income neighborhoods.
“Then investors take advantage of the opportunity and as a result, facilities, institutions are built,” Hogsett said.
“All told, this year, the 55 million dollars in New Markets Tax Credits will lead to what we estimate is 150-million dollars in new investment in our neighborhoods,” said Indianapolis Deputy Mayor of Community Development, Jeff Bennett.
Investors receive a tax credit totaling 39-percent of the cost of their investment, to be claimed over seven years, while the CDEs raise and use the capital to invest in urban and rural development.
As of the end of the 2015 fiscal year, New Market Tax Credits have generated $8 for every $1 of federal funding, creating roughly 164 million square feet of manufacturing, office and retail space nationwide.
Mayor Hogsett made the announcement Tuesday morning at the Ivy Tech Culinary School and Conference Center on Meridian Street. A fitting backdrop, the school's renovation and overhaul were made possible when Indianapolis received $32 million in NMTC funding in 2010.
“This facility now houses job training programs, culinary arts classes, including a student-run bakery and restaurant,” Hogsett said.
The 2010 award also made possible the construction and opening of the Avondale Meadows YMCA, located in a historically high-crime area near East 38th Street and and North Keystone Avenue. Since the facility opened roughly three years ago, membership has grown to about 3100 members.
Those members say the investment in the YMCA’s development has been worth it.
Pam Pryeur, who suffered a stroke six years ago, has been exercising at the YMCA since last June. She says the programs available at the facility have played a big role in her mission to regain as much mobility as possible.
“My goal was to get my arms moving enough so I could make a ponytail, and now I can put my arm all the way back,” Pryeur said.
Kyle Dozer, who regularly works out at the YMCA says the facility has turned into a positive place for young people to spend their time in an otherwise tough neighborhood.
“It gives them something to do,” Dozer said. “Instead of sitting around thinking of other things to do, you know. The YMCA provides a lot of different opportunities for kids and adults as well.”
It is not yet known which projects or which neighborhoods will see portions of the $55 million. The Indianapolis Department of Metropolitan Development is now taking applications and questions from local organizations and developers. The process could take several months. City officials will announce which projects will receive the funding when the final decisions have been made.