NMTCs Allow U.S. Bank to Continue Financing Community Development
Initiatives in Underserved Areas
ST. LOUIS, Mo.--(BUSINESS WIRE)--Feb. 24, 2012--
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
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
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
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 Program
The 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 Corporation
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. Bank
U.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.
Source: U.S. Bank
Lisa Clark, 608-877-7517