Ask anybody who’s tried to take advantage of the complicated but valuable New Markets Tax Credits program and they’ll tell you it’s one of the hardest ways to finance a project.
But is it worth the hassle? You bet.
The federal program distributes tax credits to organizations that can essentially exchange them for cash to finance high-impact projects in certain low-income or distressed areas. Investors provide that cash and get to use the credits to cut their federal tax liability. That reduces the financial risk of the projects for the investors.
The Phoenix Theatre building, the restoration at the PR Mallory campus and the transformation of the old U.S. Naval Armory into a charter high school are all projects that were financed in part by new markets tax credits.
So while we think the federal government could—and should—take steps to make the program simpler to use, we’re big fans of the tax credits overall.
And we applaud the projects that Mayor Joe Hogsett and his administration have chosen to receive the next round of new markets tax credits:
Madam Walker Legacy Center, $10 million in tax credits. The 92-year-old Madame Walker Legacy Center (formerly Madame Walker Theatre) at the corner of Indiana Avenue and Martin Luther King Jr. Street is in the middle of a major renovation that received a boost last year through a $15.3 million grant from the Lilly Endowment.
Wheeler Mission Center for Women and Children, $9 million in tax credits. Wheeler is raising $12 million to expand its Center for Women and Children at 3208 E. Michigan St. (See page 2 for a Q&A with Allison Melangton, who is leading the capital campaign.) Plans call for the expanded shelter to offer 164 permanent beds, 40 emergency shelter beds, 84 family shelter beds, 30 transitional apartments for mothers with children, and additional medical, education, dining, child care and programming facilities.
16 Tech Innovation Hub, $8 million in tax credits. The hub is the co-working and makers space at the 16 Tech innovation district on the near-northwest side of Indianapolis. The hub will focus on life sciences and offer startup and scale-up services to incubator and training programs.
RecycleForce, $8 million in tax credits. The not-for-profit helps ex-offenders transition back into the workforce and has been raising money to construct a $10 million, 105,000-square-foot building in Sherman Park on the east side.
All four projects are worthy of funding. But what makes them special as a group is that they will serve such a diverse group of people—tech workers and startups, ex-offenders, homeless families and the African American community—while enhancing all of Indianapolis.
We are sure there were worthy projects that were not awarded tax credits. Across the metro area, there are dozens of projects and programs that exist or are in the works that deserve funding. New markets tax credits are just one of the many available tools. The Opportunity Zone program that reporter Lindsey Erdody wrote about on page 1 is another.
But individual donations and investments matter, too. Take a look around and see where you can make a difference.•
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