Leveraging Federal Programs to Stretch Local Resources Speaking Event
J. Wesley Crum will discuss important federal programs, including the New Market Tax Credits and US Department of Agriculture REDLG Programs, on Monday, May 19, from 9:00 to 11:00 a.m. in the Charles H. Murphy Jr. Boardroom at the Chamber. Reservations are required for this event to firstname.lastname@example.org or (870) 863-6113.
"Wesley Crum and I have worked for about 15 years on economic development projects,” said Chamber President and CEO Jeremy Stratton. "I have found him to be one of the most creative and innovative thinkers in putting together financing to make projects work. By utilizing New Market Tax Credits and the USDA REDLG programs, he has helped me on numerous occasions make projects that would not work financially feasible otherwise. He has excellent contacts with CDE’s and can help us put together our own entity, which we will need as we move Union County and El Dorado forward.”
Crum, an attorney in Greenville, S.C., has worked on economic development, corporate financing and incentives with municipalities and companies for more than three decades.
"New Market Tax Credits and Rural Development programs are often overlooked by municipalities, but are effective in helping finance economic development projects,” said Crum. "In today’s environment of complex financing, it often takes private sector dollars, local tax dollars, and state and federal resources to make a project work.”
New Market Tax Credits is a highly successful program developed by Congress in 2000 and managed by the Treasury Department through the CDFI fund to help spur development in census tracts that have greater than 20 percent poverty rate and median household income 80 percent of the national average. The NMTC program offers a 39 percent tax credit over a seven-year period to developers and companies that make economic development investments in qualified census tracts.
Often times, the developer or company will sell the credit on the open market through a Community Development Entity (CDE) to a large bank or oil company (for instance) seeking to lower their taxable income in exchange for money for their project.
Through this process, the developer or company will receive a 20 percent cash infusion toward their project. If a project has a $10 million investment, then the New Market Tax Credit process will lower it to a net $8 million investment and make it a more feasible project.
New Market Tax Credits have been used in the past for industrial, medical, educational, commercial and mixed use projects in eligible census tracts. Presently, most of El Dorado, except for a strip around downtown, is eligible. The largest and eastern most census tract in Union County also is eligible.
"We can work with Community Development Entities (CDEs), such as Arkansas Capital Corporation to obtain an allocation for a project,” Stratton said. "However, all CDEs have limited amount of allocation and their project focus may not coincide with our needs. My strong suggestion is to set-up an El Dorado and Union County CDE for our own allocation to use toward future projects. Wesley Crum will discuss the process of forming our own CDE.”
Union County and El Dorado are both eligible for the US Department of Agriculture’s REDLG Program based on population as long as we find an eligible Rural Utility Service to run the grant and loan programs through for economic development projects. Crum will discuss how 0 percent loans and grants can be used to leverage economic development projects, such as industrial site locations, medical uses, and infrastructure.
For more information on this event or the Chamber, call (870) 863-6113 or visit goeldorado.com/chamber. The El Dorado Chamber of Commerce provides leadership in economic and community development for El Dorado and Union County in order to improve the quality of life for all its citizens.