Six area banks, agencies win New Markets credits
St. Louis Post-Dispatch
February 25, 2011
By Tim Logan
Six St. Louis-area banks and development agencies will receive $182 million in federal tax credits designed to draw investment to low-income neighborhoods, the U.S. Treasury Department said Thursday.
The Treasury awarded $3.5 billion nationwide in New Markets Tax Credits, which can be used to fund business startups, real estate development and other projects in poor areas. In recent years, these credits have become a key ingredient in funding projects in St. Louis, and have helped pay for everything from the rehab of the Peabody Opera House to the development of Crown Square in Old North St. Louis to biotech startups.
In the awards announced Thursday, local winners included:
- Advantage Capital Partners, which has a large office in Clayton: $56 million.
- Enterprise Financial, a Clayton-based bank: $35 million.
- Heartland Regional Investment Fund, an arm of the St. Louis County Economic Council: $32 million.
- Habitat for Humanity, whose New Markets operation is based in St. Louis: $28 million.
- McCormack Baron Salazar, a St. Louis-based developer of affordable housing: $10 million.
- St. Louis Development Corp., the city's development agency: $21 million.
In most cases, these credits are used to fund loans and equity investments in businesses, nonprofits and real estate projects. Through a complex financing mechanism, they generate cash equal to 39 cents on the dollar, so $182 million in credits equates to roughly $71 million in investment.
One name that was notably absent from the list was U.S. Bank Community Development Corp. The St. Louis-based arm of the big lender has long been a major user of New Markets credits and has contributed them to several major local projects. But it received none in this go-round, a spokeswoman confirmed.
Firms that win credits do not necessarily have to use them in their local areas, though the city and county economic development agencies probably will. Local developers have also drawn New Markets money from outside the region to fund projects in St. Louis.
