As part of the Seattle Jobs Plan, the Office of Economic Development has been actively investing New Markets Tax Credits (NMTCs) through the Seattle Investment Fund LLC to support community-based, economic development projects that help create jobs and provide other community benefits.
Recently OED’s investment in the Pike Place Market renovation was covered in the Novogradac Journal of Tax Credits.
Pike Place Market is part of a 9-acre historic district that includes housing, small businesses, restaurants, office, and social services and generates more than $100 million in annual sales, according to Ben Franz-Knight executive director of Pike Place Market Preservation and Development Authority (PDA). Now, the market is getting some much-needed improvements. A $73 million, six-year property tax levy funded by Seattle residents is bringing the market buildings into the 21st century, while an infusion of NMTC equity is keeping small and marginal businesses open during the renovation.
“Strengthening and rehabilitating that market for the next hundred years was critical to us. Both economically and culturally, it is the heart of our city,” said Steve Johnson, the city’s economic development director.
The city’s investment of NMTCs to the renovation project resulted in $1.8 million in equity and $7.3 million in debt financing to help finance tenant improvements and temporary relocation assistance for more than 60 small businesses impacted by the Market’s significant infrastructure renovations.
Ken Takahashi, OED’s NMTCs program manager explains, “While the levy proceeds made the overall renovations possible, the NMTCs transaction provided the critical final piece of financing to support small businesses impacted by the renovation.” Many of the businesses received reduced rents or rental assistance and would have struggled to survive during the eight to ten months their market spaces were unavailable.
In addition to the Pike Place Market investment, the city has invested in these two additional projects in 2011:
Bullitt Center: The city’s NMTCs investment resulted in $1.9 million in equity and $7.3 million in debt financing to assist the development of the nation’s first office building to achieve Living Building standards. The six-story, 50,000-square-foot building, is anticipated to be the nation’s first to exceed LEED Platinum efficiency standards. The project also creates or retains 141 direct permanent jobs and creates 94 direct construction jobs that will provide opportunities to WMBEs, pre-apprenticeships and apprenticeships. The building is expected to be an anchor for future economic development through onsite green building training programs. (July, 2011)
INSCAPE building: The city’s NMTCs investment resulted in $1.9 million in equity and $7.2 million in debt financing to assist the redevelopment of the historic INS building to create affordable space for local artists and strengthen the connection between the Chinatown/International District and Pioneer Square neighborhoods. The project will create or retain over 100 permanent jobs while providing affordable artist space; and preserve the history of the building’s past in conjunction with the Wing Luke Asian Museum. (September, 2011)
Read the full Novogradac article on OED’s investment in the Pike Place Market renovation here.
New Markets Tax Credits (NMTCs)
The New Markets Tax Credits (NMTCs) Program was established in 2000 as part of the Community Renewal Tax Relief Act. NMTCs are federal tax credits that can be distributed to private investors who provide low-cost financing for business and real estate projects located in eligible census tracts. The goal of the program is to spur revitalization efforts in low-income and impoverished communities across the United States.
Seattle Investment Fund LLC
The Seattle Investment Fund LLC is a limited liability company created by the City of Seattle to help create a robust economy and broadly shared prosperity through investments of federal New Markets Tax Credits. For more information about the city’s Office of Economic Development’s NMTCs program, visit www.seattleinvestmentfund.com or contact Ken Takahashi at ken.takahashi@seattle.gov or 206-684-8378.
