BlueHub Capital Receives $20 Million in New Markets Tax Credits to Spur Economic Development in Low-Income Areas
BlueHub Capital today announces it has been awarded $20 million in New Markets Tax Credits (NMTC) from the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund). The allocation will be used to expand BlueHub’s NMTC investing to support manufacturing and community facilities in targeted low-income communities.
The New Markets Tax Credit program, run by the CDFI Fund, provides tax credits to community development organizations, like BlueHub, helping them to leverage additional investment in underserved communities to create jobs and stimulate local economies.
“The New Markets Tax Credit program is one tool—a very powerful tool—that we use to reverse years of disinvestment and empower local actors on the ground to revitalize their communities,” said Elyse Cherry, CEO of BlueHub Capital. “This new allocation will allow us to work with key investors and local partners to expand our investing in communities that are ripe for economic development, expanded social services and job creation. As the country continues to suffer and recover from COVID-19, we will continue our work to address the inequitable impact the pandemic has had on low-income communities and communities of color.”
BlueHub Capital is now a nine-time NMTC recipient, totaling $543 million. Previous allocations have been deployed in 20 states across the U.S., ranging from:
- Health care providers and community services in the Northeast
- Sustainable forestry projects in rural communities in West Virginia, Florida, and the Northwest
- Food manufacturers in Tennessee and Georgia
- Commercial real estate redevelopment projects in in Texas, North Dakota, Virginia and Connecticut
BlueHub investments have allowed these projects to leverage over $1.5 billion in additional capital to their communities.
BlueHub is one of 100 Community Development Entities receiving awards this fiscal year and was selected from a pool of 208 applicants. Historically, NMTC Program awards have generated $8 of private investment for every $1 invested by the federal government.
“These investments will create jobs and spur economic growth in urban and rural communities across the country,” said Secretary of the U.S. Treasury, Janet L. Yellen in an announcement. “Many of the communities that will receive these funds have confronted economic challenges over many decades. Challenges which have been made more difficult by a lack of investment. It’s critical that Congress sustain these investments over time by making the New Markets Tax Credit Program permanent.”
Find the full list of recipients in the 2020 NMTC Award Book.
About BlueHub Capital
BlueHub Capital is a national nonprofit community finance organization with a 35-year history of building healthy communities where low-income people live and work. Since 1985, BlueHub Capital has invested over $2.2 billion to support low-income communities, creating and preserving over 26,000 units of affordable housing, 13,000 jobs, healthcare services for more than 197,000 patients, education and daycare for more than 70,700 children, and prevented over 1,150 foreclosure-related evictions. To learn more about BlueHub Capital and the impact of its investments, visit bluehubcapital.org.
About the New Markets Tax Credit Program
The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). CDEs that receive the tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39% of the cost of the investment and is claimed over a seven-year period. The CDEs in turn use the capital raised to make investments in low-income communities. CDEs must apply annually to the CDFI Fund to compete for New Markets Tax Credit Program allocation authority. Since the inception of the NMTC Program, the CDFI Fund has completed 17 allocation rounds and has made 1,354 awards totaling $66 billion in tax allocation authority. This includes $3 billion in Recovery Act Awards and $1 billion of special allocation authority used for the recovery and redevelopment of the Gulf Opportunity Zone. To learn more about the New Markets Tax Credit Program, please view the program Fact Sheet or visit www.cdfifund.gov/nmtc.