U.S. Bank Awarded $65 Million of New Markets Tax Credit Allocation Authority
NMTC authority allows U.S. Bank to continue stimulating economic growth, supporting job creation and fostering the development of community services across the country
ST. LOUIS--(BUSINESS WIRE)-- The U.S. Department of the Treasury granted U.S. Bank, via its community development entity USBCDE, LLC, the authority to raise $65 million in financing for low-income communities.
The award is part of a $3.5 billion New Markets Tax Credit (NMTC) allocation authority package announced in April by the Treasury's Community Development Financial Institutions Fund (CDFI Fund). USBCDE is one of only 85 community development entities (CDEs) which received allocation authority out of a pool of 292 applicants.
CDEs utilize allocation authority to attract private sector investments in disadvantaged communities that lack access to the patient capital needed to support and grow businesses and create jobs. The program is an efficient and effective mechanism for infusing up-front capital in areas that need it the most.
"Since its inception in 2000, the program has met its mission of bringing critical financing to low-income communities," said Zack Boyers, chairman and chief executive officer of U.S. Bancorp Community Development Corporation, the community investment subsidiary of U.S. Bank. "In fact, it's generated more than twice the amount of funding than originally anticipated and has helped transform many inner cities and small towns throughout America as a result."
In addition to being an efficient tool for driving capital to underserved markets, the program also spurs economic development. The nearly 3,000 real estate developments and businesses galvanized by the NMTC Program during 2003-2010 have created more than 500,000 jobs.
Prior to this announcement, USBCDE had received five allocations totaling $535 million, 96% of which has been utilized. To date, USBCDE has partnered with 50 other CDEs to raise more than $1.7 billion for nearly 90 community development initiatives across the country.
Some of the diverse businesses and developments that USBCDE has been able to finance with its allocation awards include raising capital for: the development of a science center in a vacant building near Los Angeles, which will provide science, technology, engineering, and math outreach programs to local schools and low-income and underserved children; the renovation of a tornado-damaged building in Kentucky into a community center; the development of a retail plaza in a distressed Brooklyn neighborhood, one component of a mixed-use, master-planned community; and the installation of equipment at a manufacturing plant in rural Wisconsin. These projects created 1,405 construction and 1,889 full-time jobs and retained 356 positions.
U.S. Bank, which also serves as the most active NMTC investor in the country through its St. Louis based subsidiary, U.S. Bancorp Community Development Corporation, has committed more than $3.6 billion of NMTC equity in support of approximately 1,800 businesses and real estate developments across the United States. USBCDC also provides capital investment for the renovation of historic buildings, the construction of needed affordable and market-rate homes, and the development of renewable energy facilities.
About the New Markets Tax Credit Program
The New Markets Tax Credit Program (NMTC Program) was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities. The NMTC Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years (five percent for each of the first three years, and six percent for each of the remaining four years). The investment in the CDE cannot be redeemed before the end of the seven-year period. Learn more at www.cdfifund.gov.
About U.S. Bancorp Community Development Corporation
U.S. Bancorp Community Development Corporation, a subsidiary of U.S. Bank, has invested more than $10.9 billion of tax credit equity in community development projects across the country as of March 31, 2013, using state and federally sponsored tax credit programs. USBCDC's commitments provide capital investment to areas that need it the most and have contributed to the creation of new jobs, the rehabilitation of historic buildings, the construction of needed affordable and market-rate homes, the development of renewable energy facilities, and the generation of commercial economic activity in underserved communities. Visit USBCDC on the web at www.usbank.com/cdc.
About USBCDE, LLC
USBCDE, U.S. Bank's six time award winning community development entity, strengthens distressed and underserved communities throughout the nation using the New Markets Tax Credit Program. USBCDE provides equity and favorable loan rates and terms to finance high impact business expansion and real estate projects. All investments must satisfy an impact test to help ensure that the investment will trigger significant, material economic and social benefits; and would not be accomplished, or would be subject to material risks and indefinite delays, if not for the NMTC financing.
About U.S. Bank
U.S. Bancorp (NYS: USB) , with $355 billion in assets as of March 31, 2013, is the parent company of U.S. Bank, the 5th largest commercial bank in the United States. The company operates 3,080 banking offices in 25 states and 5,056 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.
Nicole Garrison-Sprenger, 612-303-0731
U.S. Bank Public Relations
KEYWORDS: United States North America Minnesota Missouri
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