FORT WAYNE, Ind. (WANE) Mayor Tom Henry announced Wednesday afternoon that the city of Fort Wayne is set to receive $33 million in federal funding for future development projects. The money comes from the New Markets Tax Credit program which helps provide tax credits to investors in low-income areas.
Fort Wayne was the only city in Indiana to receive the funding and across the nation. Only 87 of the 310 applications accepted by the US Department of the Treasury were awarded funds.
According to city officials, the New Markets Revitalization Fund as it’s called, will sell the tax credits to investors who can then get a credit against their federal income taxes. The city will then use the proceeds to help finance the eligible commercial projects. Any project must prove that it will have a significant positive impact on the community as a whole. Examples would be job growth or benefits for low-income residents.
“This is a major win as we continue to see unprecedented momentum in our city. I want to commend our city employees for their tremendous efforts in assisting us in receiving these financial resources,” said Mayor Henry. “The new funding positions our community for additional economic development opportunities and new jobs to make Fort Wayne a business investment and quality of life leader in northeast Indiana and the Midwest.”
The money will be allocated for multiple projects over the next two to three years.
According to officials, the application process was a long and grueling one. The city had to provide specific examples of what it’s done with funding in the past.
Fort Wayne also qualified for the credits in 2008 when $15 million was used to help pay for the Harrison Square development in downtown Fort Wayne.
According to the Community Development Financial Institutions Fund (CDFI Fund), which is overseen by the U.S. Department of the Treasury:
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.