STRATEGIC PRIORITY: Economic and Neighborhood Vitality
AGENDA DATE: November 11, 2020
COUNCIL DISTRICT(S):|910|DEPARTMENT: Office of Economic Development
EXECUTIVE: Dr. Eric A. Johnson
______________________________________________________________________
SUBJECT
title
Authorize a New Markets Tax Credit transaction between the Dallas Development Fund and its subsidiaries, Capital One N.A. and its subsidiaries, and Shelter Ministries of Dallas, and its affiliates for construction of a Austin Street Center homeless shelter located at 1717 Jeffries Street - Financing: No cost consideration to the City
body
BACKGROUND
On February 11, 2009, City Council authorized the creation of the Dallas Development Fund (DDF), a non-profit Community Development Entity (CDE) by Resolution No. 09-0461 to apply for a New Markets Tax Credit (NMTC) allocation from the U.S. Department of Treasury's Community Development Financial Institutions Fund in its 2009 funding cycle. DDF was awarded $55 million in the 2017 allocation cycle, and was previously awarded $130 million in allocation from the 2009, 2012 and 2014 cycles. DDF has closed $157 million in allocation to date.
The NMTC Program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated CDEs. These investments must be used by the CDE for projects and investments in low-income communities, as defined by the NMTC Program. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period.
On October 8, 2020, DDF considered and approved a NMTC transaction between DDF, Capital One N.A. (Capital One), and Shelter Ministries of Dallas (Sponsor). This NMTC allocation will use up to $8.5 million of DDF's $55 million NMTC allocation. Capital One is anticipated to provide a total of approximately $2.73 million in NMTC equity to support the $8.5 million in total allocation from DDF. Capital One C...
Click here for full text