For Immediate Release
(202) 224-5653

KOHL ANNOUNCES $170 MILLION IN TAX CREDITS TO BOOST JOB CREATION, ECONOMIC DEVELOPMENT IN WISCONSIN

  

WASHINGTON, DC – Today, US Senator Herb Kohl announced $170 million in tax credits to promote job creation, business growth and economic development, and finance real estate investment throughout the state of Wisconsin.  The federal funds are being awarded through the New Markets Tax Credit (NMTC) Program administered by the US Department of Treasury’s Community Development Financial Institutions Fund. 

 

“This is great news for Wisconsin communities,” Kohl said.  “These tax credits, totaling $170 million, will help us invest in underserved urban and rural areas, grow jobs and businesses, and build up our neighborhoods throughout the state from the ground up.”

 

Specifically, the Department of Treasury is awarding $100 million to the Wisconsin Community Development Legacy Fund Inc., $40 million to the Johnson Community Development Corp. and $30 million to the Wisconsin Business Growth Fund Inc. – organizations that provide below-market loan products to spur business investment and economic development in low-income communities.  Senator Kohl pressed for this major federal grant investment to be made to boost communities in the state of Wisconsin.

 

Wisconsin Community Development Legacy Fund Inc. is a partnership formed by the Wisconsin Housing and Economic Development Authority and Legacy Bancorp, a certified CDFI bank holding company based in Milwaukee.  The fund will use its tax credit allocation to provide investments in Wisconsin’s most distressed communities, with a strong focus on underserved rural communities.  The fund will finance high impact real estate and non-real estate projects primarily with equity-equivalent subordinate debt products, but will also provide financing with rates at least 50 percent below market.

 

Johnson Community Development Corp. will serve the highly distressed communities throughout Wisconsin.  The ongoing mission of the corporation is to redevelop neighborhoods in areas experiencing the greatest amount of distress by focusing on and prioritizing opportunities that will create new jobs, eliminate blight in downtown areas and bring sustainable economic development to the communities it serves.  The corporation will offer interest rates that are at least 50 percent below market, longer amortization periods, interest-only features, higher than standard debt coverage rations and other flexible terms.  In addition, it will reinvest the gross interest revenue derived from new investments, thereby multiplying the amount of capital it will deploy in disadvantaged communities.

 

Wisconsin Business Growth Fund Inc. will provide a new source of capital for disadvantaged businesses in underserved areas in the state.  Small businesses receiving capital from the fund can then use the resources for asset purchases, real estate acquisition, building improvements, inventory and equipment purchases, and working capital.  Investments will be offered in the form of equity-equivalent financing, debt with interest rates at least 50 percent below market value, and debt-utilizing flexible and non-traditional rates and terms that meet the needs of borrowers.

 

With concerns about liquidity and the availability of loans, the tax credits will help ensure low-income and distressed communities in the state can continue to grow and develop, and make improvements necessary to attract more businesses and investment.

 

Senator Kohl added, “Given the tough economic climate of the country, this robust allocation of tax credits could not have come at a more critical time to promote greater investment and growth in Wisconsin.”

 

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