LANSING - Governor Jennifer M. Granholm today announced that as a part of her Cool Cities Initiative the Michigan Magnet Fund (MMF) has awarded more than $49 million in federal New Markets Tax Credits to seven community development projects in the first round of funding. The projects are expected to create more than 2,806 new jobs and spur more than $585 million in private investment. In May 2005, the fund received $60 million in federal tax credits through the Community Development Financial Institutions Fund, a division of the U.S. Department of Treasury.
The MMF, a partnership between the Michigan Economic Development Corporation, the Michigan State Housing Development Authority (MSHDA) and the Great Lakes Capital Fund, is a nonprofit Michigan corporation governed by a 19-member board of directors. The partnership will use the tax credit allocation to help finance community development projects in targeted communities across the state.
The MMF board recently approved the following projects to receive tax credits:
- 500 Block, Flint - Uptown Developments LLC will use a $6.4 million tax credit allocation to redevelop property located within the 500 block of South Saginaw Street in downtown Flint. The more than $12.2 million project will include an 80,000-square-foot building to serve as the new corporate headquarters for Rowe Incorporated and a restaurant and entertainment complex. Eight loft apartments are also planned for the top floor of the building. The project is expected to create 100 new jobs.
- DA Blodgett Building, Grand Rapids - The Inner City Christian Federation will use a tax credit allocation valued at $5.8 million to renovate the DA Blodgett building and the surrounding three-acre property housing units and commercial space. The historic Blodgett home would be restored to house the headquarters for the Inner City Christian Federation. The more than $7.4 million project is expected to create at least eight new jobs.
- East Forest Art Project, Detroit - The developer plans to use a $3.6 million tax credit allocation and invest $18 million to renovate two buildings in the Detroit Cultural Center located at 52 and 66 East Forest. The newly restored buildings will be home to new retail and entertainment opportunities including a book store, an art gallery and a restaurant. The project is expected to create 38 new jobs.
- Harbor Shores, Benton Harbor - A $8.6 million tax credit will help finance land acquisition and infrastructure to accommodate a mixed-use development to include 1,025 housing units, 94,000 square feet of office space, 108,000 square feet of hotel space and an indoor water park. The $500 million project is expected to create 2,530 new jobs.
- Pere Marquette Depot, Bay City - Great Lakes Center Foundation will use a $4 million tax credit to renovate the historic train depot, a Bay City landmark, to house the regional tourism center as well as the Bay Area Community Foundation and the Great Lakes Center Foundation. The developer will invest approximately $5.8 million in the project which is expected to create five new jobs.
New Markets is a $15 billion federal tax initiative aimed at attracting new private investment capital to under-served markets and low-income communities. Investors who make equity investments in a qualified community development entity such as the Michigan Magnet Fund can qualify for a 39 percent federal tax credit over a seven-year period. This equity investment, when combined with other debt financing, offers the ability to make attractive financing available to the borrower and stimulate growth of difficult-to-finance projects.
The Michigan Magnet Fund was among 41 out of a total of 208 applicants nationwide chosen to receive a tax credit allocation. The MMF has applied to the CDFI Fund for an additional $150 million in new market tax credit investment allocation later this year.
The Michigan Magnet Fund has contracted with AAB Development Strategies LLC and Great Lakes Capital Fund to manage the $60 million fund. For information on how to apply for New Market Tax Credits through the MMF, please visit www.aabds.com.
The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life. For more information on MEDC initiatives and programs, visit the Web site at www.michigan.org.
The Michigan State Housing Development Authority is a quasi-state agency that provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low- and moderate-income Michigan residents. The Authority's loans and operating expenses are financed through the sale of tax-exempt and taxable bonds and notes to private investors, not from state tax revenues. For more information on MSHDA initiatives and programs, visit the Web site at www.michigan.gov/mshda.
The Great Lakes Capital Fund (GLCF) helps socially-responsible corporations invest in affordable housing and community economic development activities. The fund raises capital from corporations and financial institutions and invests these resources into real estate development partnerships. The partnerships receive essential equity for their developments and the investors receive a competitive internal rate of return on their investment through tax benefits. For more information, visit the Web site at www.capfund.net.
# # #