While titans of industry gather in Butte to discuss the state of the U.S. economy, one federal project has already helped spur building and business in Montana.
The New Market Tax Program, which has been run by the Montana Community Development Corp., or MCDC, for only
18 months, has already been used to restore the Sears Building in Butte along with multimillion-dollar projects in Bozeman, Helena and Missoula.
The credits have been used nationwide for more than a decade, often as the final piece of funding for commercial projects in distressed urban areas.
But in 2008, U.S. Sen. Max Baucus, D-Mont., helped change the project's requirements so that rural states could also have access to a piece of the pie.
"I worked hard to see that the New Market
Tax Credits would not just go to the nation's urban areas, but to important community
projects in rural states like Montana," said Baucus in a press release.
MCDC was awarded $40 million worth of the credits, which it can then sell to private investors in order to generate low-cost financing for eligible projects with community impacts.
Glacier Bancorp has participated in each of the four deals undertaken with help from the tax credits, acting as a lender and the tax credit investor.
"While the New Market Tax Program is relatively new in Montana, it has been very successful for major projects funded by community banks in other parts of the county," said Ron Copher, chief financial officer at Glacier Bancorp. "With these four projects under way we have seen how well the program can work in Montana."
In Bozeman, Big Sky Western Bank partnered with grocer Town and Country Foods Inc. to renovate an empty theater into a neighborhood store.
In Helena, Valley Bank partnered with St. Peter's Hospital and Dick Anderson Construction to build the Peak Health Project, which turned a vacant Helena building into a fitness and rehabilitation facility.
A six-story retail and office building is under construction in Missoula. Called the Garlington project, it has more than 129 contractors employed on site. By completion, it will have already produced wages of more than $5 million and approximately $500,000 in state and local income tax, according to MCDC.
And locally, the Sears Building (see story above) became Butte's first project to use the New Market credits, which developer Nick Kujawa also melded with historic preservation credits and money from the Butte Local Development Corp. and Butte-Silver Bow Urban Revitalization Agency. The building is about a month away from opening rental apartments and an independent grocery.
Heidi DeArment, vice president at MCDC, said that project "is a perfect example of how the New Market Tax Credit program can be used by community banks, agencies and businesses to jumpstart important projects for their community."
She said the economic impact of the four projects, both direct and indirect, will total more than $71 million in the next 10 years.
But both Baucus and MCDC hope the four projects are just the tip of the iceberg for development spurred by the New Market credits.
MCDC has applied for an additional $80 million of the credits in an attempt to not just continue, but expand the program in Montana. DeArment said they are looking to fund mainstream projects involving downtown revitalization, redevelopment of vacant facilities, health and wellness projects and clean energy projects. Each must have a minimum price tag of $3 million to qualify.
- Reporter Tim Trainor may be reached via e-mail at email@example.com or call 496-5519.
Tax credits discussed Monday
New Market Tax Credits will be discussed Monday during the Montana Economic Development Summit.
The discussion, titled "New Market Tax Credits: Big Impacts in Montana," will take place from 4:40 to 5:45 p.m. in the Chemistry and Biology Building, Room 102, at Montana Tech. It will include discussion of projects already under way across the state and how Montana's $40 million in credits can be used in the future.