New Markets Tax Credit Program Provides Needed Jobs and Revitalizes Downtown Richmond

Richmond, VA - The U.S. Treasury Department's Community Development Financial Institutions (CDFI) Fund Director Donna J. Gambrell participated today in a grand opening celebration with Virginia Governor Timothy M. Kaine.

The 200 year old Miller & Rhoads Department Store in downtown Richmond, Virginia had long been vacant. After a redevelopment project in excess of $100 million that converted the historic property into a mixed use project, the building is reopening as a facility that will help revitalize the area by attracting an invigorating stream of people and businesses.

"Today's celebration of the redevelopment of our beloved Miller & Rhoads Building is thanks in large part to the U.S. Treasury Department's New Markets Tax Credit Program," said Governor Kaine. "Not only did the program help attract private-sector financing that was key to funding the renovation of one of Richmond's true historic gems-the program has boosted our economy by creating hundreds of jobs for Virginians."

The transformation of the Miller and Rhoads Building created 500 construction jobs and will lead to 170 permanent jobs in Richmond. The eight-story vacant property will now house 250 hotel rooms, 133 condominiums targeted to first-time homebuyers and approximately 21,000 square feet of street-level commercial space.

"New Markets Tax Credits are frequently the critical piece of financing needed to complete vital real estate development projects and fund businesses in rural and urban low-income communities," said CDFI Fund Director Gambrell. "I am very pleased that the use of the tax credit has resulted in the creation of valuable jobs, services, and economic opportunities for the residents of Richmond and the Commonwealth of Virginia."

The NMTC Program enabled three organizations that received NMTC awards from the CDFI Fund to work together to structure a deal that closed the financing gap that was critical to the redevelopment of the Miller & Rhoads Building. The three award recipients are: Hampton Roads Ventures, LLC of Norfolk VA, 123 New Market Investors, LLC of Great Falls, VA; and National Cities Fund, LLC of new Orleans, LA.

Background on the NMTC Program

The NMTC Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities.

The NMTC Program is administered by Treasury's CDFI Fund. In the six rounds to date, the CDFI Fund has made 364 allocation awards totaling $19.5 billion in tax credit authority, including $1 billion that was specifically set aside for recovery and redevelopment in the wake of Hurricane Katrina.

Additional information on the NMTC Program and the CDFI Fund can be found by visiting: www.cdfifund.gov.