The Business Journal writes a fair bit about the challenges of bringing investment into the midstate's urban cores.
So it was encouraging to hear developers react favorably this week to Community First Fund’s receipt of $15 million in federal New Markets Tax Credits to disburse.
The idea is that Community First Fund will work in partnership with private lenders such as banks. The latter will evaluate a project’s commercial viability and credit-worthiness, and Community First Fund will measure it against the tax credit program’s criteria to make sure it has a positive social impact, as the nonprofit’s president and CEO, Dan Betancourt, explained.
A tax credit is an increment of “patient capital” that can push a project’s financing over the finish line, Lancaster Mayor Rick Gray said.
“It’s an awesome tool,” said John Meeder, whose company, Meeder Development Corp., funded the Historic East Side Suites project on Lancaster’s East King Street in part with New Markets Tax Credits obtained through the National Development Council.
“Though it’s not for the faint of heart,” he continued. “It’s very technical.”
Carlos Graupera, president and CEO of the Lancaster-based Spanish American Civic Association, or SACA, said his organization hopes to use the credits to help fund Conestoga River Plaza. It’s a mixed residential and commercial urban renewal project that SACA’s development arm, SACA Development Corp., is putting together in southeast Lancaster.
The first six houses have been built, Graupera said. The remainder of the project is going through the municipal approval process, and SACA hopes to break ground this fall, he said.
“It’s a perfect project” for the program, he said.
Other entities, including PNC Bank and National Development Council, can make New Markets Tax Credits available for midstate projects. However, government officials and developers emphasized the advantage of having the credits administered by Community First Fund, a locally based entity with detailed knowledge and deep roots in the community.
Given the need, it’s good that the midstate has multiple tax credit sources, Meeder said. He stressed the importance of getting them awarded in a timely fashion, so Community First Fund can qualify for more.
“You’re in the game,” he said. “Every year, they can reapply.”