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The New Markets Tax Credit (NMTC) program was designed to help direct the flow of capital into low-income communities by providing investors with a tax credit incentive for investing in a qualified Community Development Entities (CDE). The CDE, in turn, is charged with using substantially all of the investment to provide capital to qualified low-income community businesses (QALICB), which can be a for-profit/non-profit business or real estate development entity. Investors receive a tax credit equal to 5 percent of the investment amount in the CDE in each of the first three years following the initial investment, and a credit equal to 6 percent of the investment amount in the CDE in each of the following four years. In total, investor receives a credit equal to 39 percent of the initial investment amount in the CDE.
The New Markets Tax Credit Program in Kansas City
In 2007, in direct partnership with the City of Kansas City, Mo., Central Bank of Kansas City applied for and was awarded $50 million in NMTC allocation authority by the Community Development Financial Institutions (CDFI) Fund of the U.S. Department of the Treasury, which is the federal agency that administers the NMTC Program. Beginning in 2008, Central Bank of Kansas City CDE began providing non-traditional financing for the development of mixed-use, business, community center and housing projects to meet the needs of Kansas City’s low-income communities using its NMTC allocation authority.
Building off the success of the partnership between the City and Central Bank of Kansas City, the Kansas City, Missouri Community Development CDE, a public benefit corporation, applied for and was awarded in 2008 $40 million in New Markets Tax Credit allocation authority. An additional $35 million in allocation authority was awarded to the Kansas City, Missouri Community Development CDE in 2009. With its NMTC Allocation Authority, the Kansas City, Missouri Community Development CDE has targeted providing low-cost financing to businesses and real estate development projects that represent investment in highly distressed census tracts. The Kansas City, Missouri Community Development CDE uses investments that tax credit investors make in the CDE (in exchange for federal tax credits) to deliver low-cost financing in the form of a 7 year, interest only loan at a below-market interest rate to qualified businesses or real estate development entity.
To date, the Kansas City, Missouri Community Development CDE has delivered financing to five businesses/real estate development projects representing $33 million in NMTC allocation authority, including:
- The Boys & Girls Club of Greater Kansas City's JD Wagner Unit, which will be a new community center that will house a gym, indoor pool, computer lab, art room, multi-purpose space, and classrooms all located on 2405 Elmwood Avenue;
- Reeves-Wiedeman Company, a local plumbing supply company that is relocating its corporate headquarters from the City of Lenexa, Kansas to a LEED Gold renovated building at 3635 Main Street, Kansas City, Missouri;
- Posty Cards, Inc., a business to business greeting card company that is developing what will be the Missouri's first LEED Platinum certified fabrication facility located at 1600 Olive St;
- Truman Medical Centers, Hospital Hill campus at 2301 Holmes Street; and
- Synergy Services, Inc. Homeless Youth Campus at 2001 NE Parvin Road.
With additional allocations remaining applications are still being accepted for consideration for eligible real estate development projects or businesses.
Prospective applicants interested in submitting a real estate development project or business financing proposal to the Kansas City, Missouri Community Development CDE are encouraged to review the NMTC program guidelines and application process available on this website. Any questions about NMTC or the Kansas City, Missouri Community Development CDE’s NMTC Program can be directed to Ruben Alonso III, NMTC Program Manager at (816) 513-1021 or by email at
ruben_alonso@kcmo.org.
Summary of the Kansas City, Missouri Community Development CDE’s New Markets Tax Credit Program- Kansas City, Missouri Community Development CDE received $35 million in allocation authority in October 2009
- Kansas City, Missouri Community Development CDE received $40 million in allocation authority in October 2008
- Use of NMTC to be targeted to businesses/development projects that represent investment in highly distressed census tracts in the Kansas City, Mo., city limits
- Eligible entities include for-profit businesses, non-profit businesses (health clinics, community centers, educational facilities, etc.) and real estate development entities that develop mixed-use, commercial use or industrial/manufacturing type developments
- NMTC facilitated financing is a 7 year, interest only debt product with below market interest rates
- Minimum project size - $7-8 million. Projects below this size will be considered on a case by case basis.
- Business/real estate development projects must generate significant and measurable community impacts
- Transactions must demonstrate need for this subsidized financing
How to access the New Markets Tax Credit Program for your project:
Review and complete the project eligibility checklist and e-mail or fax it to Ruben Alonso III at ruben_alonso@kcmo.org or fax 816-513-1174.
If your project/business is determined to be eligible, review and complete a NMTC application. Applications for NMTC eligible projects/businesses that meet the Kansas City, Mo. Community Development CDE’s programmatic guidelines will be considered on a first-come, first-serve basis based on the following scheduled request for proposal (RFP) dates:
- July 30
- September 30
- November 30
Applications are to be received by 5:00 pm, the day of the scheduled RFP date, and should be mailed/delivered to Ruben Alonso III, NMTC Program Coordinator, City of Kansas City, MO, 414 East 12th Street, 3rd Floor, Kansas City, MO 64106.
Prospective applicants may elect to FASTrack an application by opting out of the RFP schedule and having their application process expedited. An application deposit of $500 will apply for the FASTrack option.
