Just days after the public launch of a successful New Markets Tax Credit-supported project, Ecotrust has learned that its subsidiary, Ecotrust CDE, was awarded $45 million of additional New Markets Tax Credit allocation. Ecotrust will put the new federal financing toward innovative initiatives that create economic, social and environmental benefit in rural and disadvantaged communities in the Northwest and beyond.
Ecotrust used past allocations of New Markets Tax Credits to support the Bullitt Center, the world’s leading-edge commercial green building, which opened on April 22, 2013. The 50,000-square-foot building, which continues renewal at the edge of Seattle’s Central and Capitol Hill Districts, will generate all of its own energy and use a rainwater filtering system to meet all of its water needs. Construction created 160 jobs and invested $30 million into the region’s economy.
“The Bullitt Center is the latest example of how Ecotrust uses New Markets Tax Credits and other forms of capital to push environmental and social innovation while creating jobs and successful new business models,” says Spencer Beebe, chairman of Ecotrust.
Ecotrust’s latest allocation is part of $3.5 billion in New Markets Tax Credit awards to 85 organizations nationwide by the Treasury Department. This money is to be invested in creating and protecting jobs in disadvantaged and distressed communities.
This is the fourth allocation of New Markets Tax Credits that Ecotrust CDE has received since 2003.
Senator Jeff Merkley (D-Oregon) celebrated the news. “This is great news for Ecotrust and the entire Northwest,” said Merkley. “Ecotrust has been an incredible partner to Oregon’s rural communities, supporting economic development in environmentally sustainable industries ranging from forest products to clean energy. I look forward to seeing this new funding turn into jobs and economic activity across Oregon.”
Washington Governor Jay Inslee said: “Wood products is a backbone, legacy industry in the Northwest. This support for innovation in green building will help spur new jobs in distressed rural communities with deep roots in the forestry sector. I applaud this opportunity to leverage public and private funding to support cutting-edge projects and ignite sustainable economic growth.”
Past Ecotrust allocations, totaling $122 million, have supported clean energy projects, a new model of timberland management, and forest products innovation, including:
- Ochoco Lumber Company, which refinanced and stabilized the last remaining mill in John Day, Oregon and included the construction of a new pellet fuel facility.
- Chobani, Inc, formerly Agro-Farma, Inc, to renovate and upgrade its yogurt manufacturing facility located in an economically distressed county of New York, and to finance the installation of a biogas plant to convert wastes from the yogurt production process into energy.
- Ecotrust Forest Management<http://www.ecotrustforests.com/>, to support the purchase of 12,500 acres of timberland in Washington and Oregon and the conversion of the land to Forest Stewardship Council-certified management, for multiple outcomes of timber, jobs, carbon sequestration, clean water and wildlife habitat.
Ecotrust CDE plans to use some of the latest NMTC allocations to support innovative new projects across the Northwest, including Northwest tribal governments’ re-acquisition of traditional lands.
“This allocation will provide critical financing for businesses and organizations in rural communities across the Pacific Northwest,” says Bettina von Hagen, Managing Director of Investments and Community Engagement of Ecotrust CDE. “We have a very exciting pipeline of projects, which includes the conversion of an abandoned retail space into a state-of-the-art manufacturing facility, and the rejuvenation of shuttered facilities, including a paper mill, a sawmill and a biomass plant that will generate hundreds of family-wage jobs in highly distressed communities. We are particularly excited about the opportunity to work with tribes on land repatriation and the launch of related tribal forest processing businesses.”
Through Ecotrust CDE, Ecotrust uses New Markets Tax Credits as one tool in a wider strategy of impact investing to improve social, environmental and economic conditions up and down the West Coast. Over the last twenty years, Ecotrust has turned $30 million in grants and program- and mission-related investments into $800 million in assets at work throughout the region. Learn more about Ecotrust’s impact investing approach and history here.
The New Markets Tax Credit program, established by Congress in December 2000, permits corporate taxpayers to receive a credit against federal income taxes for making equity investments in vehicles known as Community Development Entities, or CDEs. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. For every dollar invested by the federal government, the NMTC Program generates over eight dollars in private investment. President Obama’s FY14 budget included an expansion and permanent extension of the New Markets Tax Credit.
In the latest funding cycle, 282 CDEs applied for allocations, requesting a total of approximately $21.9 billion in allocations.
- Allocation awards totaled $3.5 billion, or about 16 percent of the total amount requested by applicants.
- Thirty percent of the total applicant pool – 85 CDEs – were awarded allocations.
- Allocation awards range in size from $15 million to $80 million. The median allocation amount was $40 million and the average allocation amount was about $41.2 million.
More on this year’s awards and the New Markets Tax Credits program is here