By CHRIS SIEROTY
SPECIAL TO LAS VEGAS BUSINESS PRESS
Real estate projects in downtown Las Vegas and other traditionally underserved areas could benefit from millions of dollars in tax credits awarded through a federal program aimed at enticing private investment in low-income areas.
The U.S. Department of Treasury allocated $55 million in New Markets Tax Credits to the Las Vegas Community Investment Corp., a community development entity formed by the city of Las Vegas in 2012 to attract investment.
“This adds to our package of incentives we can use to attract more development to the urban core downtown and older, more distressed areas,” said Scott Adams, deputy city manager for the city of Las Vegas.
With this announcement, LVCIC has won $83 million in federal New Market Tax Credits during the program’s lifetime. Adams told the Business Press the LVCIC’s first attempt to receive the credits in 2013 failed, but the entity received $28 million in 2014.
Adams said most of the tax credits from 2014 went to support a $15 million face-lift of West Las Vegas’ Westside Grammar School, the first public school built in Las Vegas in 1923 at Washington Avenue and D Street.
The tax credits also went to support construction of the Nevada Supreme and Appellate Courts building on the southwest corner of Clark Avenue and Fourth Street, adjacent to the federal court building in downtown Las Vegas.
Adams said LVCIC still has $6.8 million in tax credits left from the first round. Those tax credits will be added to the new credits LVCIC received Monday.
Potential contenders for New Markets allocations include charter schools, food banks, hotels, manufacturing plants, solar farms, performing arts centers, medical clinics and mixed-use developments, which include a mix of multifamily and some retail.
Adams said a typical project cost would be between $5 million and $15 million.
“We’ve had a lot of interest from charter schools in the area,” Adams said. “We will only select a project that is construction-ready or shovel-ready.”
Bill Arent, director of economics and urban development with Las Vegas, said at this point he is looking for new projects.
The nonprofit LVCIC works by selling these tax credits to investors, using that money to make below-market-rate loans for job-generating projects in qualified low-income communities.
Arent said this program would help attract additional investments in and around the Las Vegas Medical District.
The medical district was formed by the city in 1997 with the intention of creating a medical education, research and clinical care center in an area near University Medical Center.
The district is also home to the UNLV School of Medicine, which is scheduled to welcome its first students in fall 2017. The district is anchored by facilities such as the Cleveland Clinic Lou Ruvo Center for Brain Health and the UNLV School of Dental Medicine.
“It will be very helpful” in attracting additional investment to the area, Arent said of the New Market Tax Credits.
New Market Tax Credit benefits to qualified developers are numerous, according to the LVCIC.
They assist with approximately 20 percent of a project’s expense and enable a developer to receive low-cost, flexible financing. To qualify, a project must be located in and benefit a low-income community.
A New Mart Tax Credit Loan is typically forgiven after a seven-year compliance period and reduces dependency on other funding sources.
The developer must have direct ownership or investment in the project and have sufficient financing to be augmented by the tax credits.
Altogether, the treasury department made allocations to 120 organizations nationwide for a total of $7 billion in New Market Tax Credits. It was the largest round of awards since the program’s inception in 2001.
Over the past 15 years, the agency has awarded $50.5 billion in tax credits. The federal government estimates that every dollar of tax credits supports $8 in private investment.