In light of recent events, Opportunity Fund’s unyielding commitment to the success of minority-owned businesses and underserved communities is stronger now more than ever. We’ve been working overdrive to support our clients and communities in persevering through the COVID-19 pandemic while in the face of our nation’s history of systemic racism.
We will support these efforts with our New Markets Tax Credit (NMTC) Program by continuing to invest in non-profit sponsored community facilities providing safety net services for low income communities.
New Markets Tax Credit
NMTC was created by Congress 20 years ago to encourage private capital investments into low-income communities. It provides federal tax credits to a select group of community development entities (CDEs), like Opportunity Fund, which then utilize the tax credits to attract capital.
The capital is loaned at below market interest rates for the construction or renovation of commercial real estate projects or operating businesses located in low income census tracts. Opportunity Fund closed its first NMTC project in 2004 and has since invested a total of $377 million in NMTC projects.
Although projects can vary, our NMTC investments focus on non-profit community facilities and Native American job creation projects, such as community health centers, at-risk youth centers, homeless services facilities, and more. Since 2004, we have invested in 31 facilities that are providing much-needed resources to and creating jobs for their communities.
The Yakima Valley Farm Workers Clinic
Facilities like the ones we invest in have been essential to helping hard-hit communities endure and overcome the economic and social hardships of the last two decades. In June 2020, Opportunity Fund announced the closing of $9.6 million in NMTC financing for the Yakima Valley Farm Workers Clinic, a non-profit, Federally Qualified Health Center.
Our NMTC investment will support the construction of a new 40,000 square foot community health clinic in Kennewick, Washington that will serve low-income and uninsured residents, a good portion of which are seasonal farm workers.
The project will create or retain 76 full-time permanent jobs, including 46 for low income individuals. YVFWC estimates the new clinic will provide care to 12,360 patients per year across over 53,000 patient visits (80% of whom are projected to be low income and 76% minority) — services that are more crucial now in light of COVID-19 and its potential long-term effects.
For more information on the Yakima Valley Farm Workers Clinic and our other community projects, please visit our NMTC website here.
H.R. 2 – The Moving Forward Act
$52 billion in direct NMTC investments were made between 2003 and 2019. These NMTC investments leveraged more than $100 billion in total capital investment to communities with high rates of poverty and unemployment. In addition, between 2003 and 2015, the NMTC generated more than 1,000,000 jobs, at a cost to the federal government of less than $20,000 per job.
Despite its profound impact, the program has been up for renewal on a periodic basis, and after the current 1-year extension, the NMTC program is, once again, at risk of being eliminated. It’s crucial now, more than ever, that Congress moves to make the New Markets Tax Credit program permanent.
We are committed to investing in the communities we serve and will continue to advocate for policies that create a more equitable and just society. The House of Representatives is currently considering H.R. 2, the Moving Forward Act, which includes a permanent extension of the New Markets Tax Credit at $5 billion in annual allocation with additional NMTC allocation provided over the next three years to help communities with the economic downturn.
Opportunity Fund is an active member of the New Markets Tax Credit Coalition and will work with our partners and stakeholders to advocate for permanency.