Five development companies get tax credit

WASHINGTON – Five development companies with ties to Rhode Island received tax credits under the federal government’s new-markets tax credit program, the U.S. Treasury Department announced.
The five companies with potential projects in Rhode Island received $260 million in a round of funding announced on Oct. 30. However, those companies will likely spend the credits in a variety of states.
The companies receiving credit with ties to the Ocean State were Consortium America LLC ($80 million), MBS Urban Initiatives CDE LLC ($40 million), MHIC NE New Markets CDE II LLC ($90 million), National Trust Community Investment Corp. ($35 million) and Urban Action Community Development LLC ($15 million).
Companies were not required to pitch specific projects to receive the credits, but some of the credits could flow to the American Locomotives project in Providence, said Karl Schlachter, a senior vice president at McCormack Baron Salazar, a St. Louis-based developer that received credits through its affiliate MBS Urban Initiatives.
Schlachter said an undetermined amount of credits could be utilized to renovate a single-story structure at the corner of Valley and River streets into offices or a warehouse. But the company is still looking for a tenant and the renovation remains up in the air at the moment, Schlachter said.
The Mass. Housing Investment Corp. (MHIC) is reviewing a pipeline of potential projects in Rhode Island, said Peter Sargent, director of capital development. Sargent said it was too early to identify specific projects.
Representatives at other companies did not immediately return messages last week.
The federal program provides tax credits to investors who make “qualified equity investments” in community-development entities. The entities must invest proceeds from investments in low-income communities. The credit provided to the investor equals 39 percent of the investment and is claimed over a seven-year period. •