Hartford Business Journal

20 Hartford Business Journal • November 11, 2019 • www.HartfordBusiness.com urged Congress to let the NMCTs program expire, also said the tax credits do more to "line the pockets of the well-off" than help the poor. Swift Factory redevelopment Among the several dozen Connect- icut projects financed through New Markets Tax Credits is the $34-mil- lion redevelopment of the Swift Factory, expected to wrap in the coming year, bringing sorely needed food-related jobs to residents in the distressed section of north Hartford. The 82,000-square-foot building will soon house a wholesale facility for Bear's Smokehouse BBQ and an indoor hydroponic operation run by FreshBox Farms, as well as a kitchen incubator, and office and community health space. "This project would not have been feasible without the New Markets Tax Credits," said Patrick McKenna, senior project manager of Com- munity Solutions, the nonprofit re- developer of the Swift Factory. "We felt it was kind of the only option we had to get the capital together." Conventional commercial lend- ers may have been uninterested in a project located in a "severely dis- tressed" census tract that will com- mand below-average rents, he said. But U.S. Bank, which is among the largest NMTCs investors in the country, ultimately invested in the CDEs that provided the Swift project financing. Community Solutions was able to pair the credits with state historic preservation tax credits, as well as other loans, financing and grants from the state and federal governments. It took years to put the whole package together, and a lot of that had to do with the complexity of NMTCs, which Community Solu- tions had not used before. The Bristol Boys and Girls Club had a similar experience dealing with NMTCs, which contributed several million dollars toward financing the nonprofit's $10-million clubhouse. Suchopar said dealing with the program's complexities was worth it because the new facility has allowed the club to expand programming and serve more children and families. "Us being able to build this new facility positioned us for another century," Suchopar said. "It makes a difference for our future." CHEFA's $63M foray The quasi-public Connecticut Health and Educational Facilities Authority (CHEFA) is known best for issuing bonds that help finance major capital projects for Connecti- cut hospitals and colleges. CHEFA's leadership recently decided to leverage the agency's re- lationships with area nonprofits by enrolling in the New Markets Tax Credits program as a Community Development Entity. There hasn't been an active Connecticut-based CDE in over a decade. The designation gives CHEFA a shot at receiving a tax-credit alloca- tion, and related equity investments from banks and others that want them. CHEFA would then dole out that money largely to nonprofit capital projects worth at least $5 million, said Dan Kurowski, program man- ager for CHEFA's recently formed subsidiary, CHEFA Community Development Corp. CHEFA recently submitted its first application to the Treasury, asking for $63 million in credits that could back seven projects worth a com- bined $70 million. Those projects include: • The Boys and Girls Club of Hartford's proposed $18-mil- lion clubhouse at the corner of Meadow and Ledyard streets in southeast Hartford. • Hartford Community Loan Fund's plan to bring a supermar- ket and nearby nutrition coun- seling office to North Hartford, an $18-million project coined the Healthy Hartford Hub. • Community Mental Health Af- filiates' $8-million acquisition and renovation of a headquar- ters building in New Britain. • Odyssey Community School in Manchester's $5.5 million build- ing acquisition and expansion. Rex Fowler, CEO of Hartford Community Loan Fund, said the credits would be a critical source of financing for the long-pursued Hartford supermarket. Without the tax credits, he said it "doesn't mean the project can't happen, it just means we need to find an extremely low-cost or free source of capital, grants, or foun- dation investments, or something else to replace it." CHEFA won't know if its applica- tion is successful until next year. "These credits are incredibly challenging to obtain," said Andre- ana, the Pullman attorney. "It's very competitive for CDEs to get the credits and then it's competitive as to how those credits are applied." There's additional uncertainty because Congress hasn't renewed the program beyond the next round of allocations, though it has saved NMTCs from expiring a number of times over the years. CHEFA's executive director, Jea- nette Weldon, is hopeful. "We are trying to build on CHEFA's successful track record of providing financial assistance to nonprofits in the state," Weldon said. "That's the sector we were created to serve, and we have a lot of expertise we can bring to the table." >> Financial Gap continued New Markets Tax Credits investments in CT by year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $0 $20M $40M $60M $80M NMTC investments $12,396,376 $12,396,376 $16,264,417 $16,264,417 $27,040,000 $27,040,000 $12,736,462 $12,736,462 $17,727,996 $17,727,996 $72,026,196 $72,026,196 $66,744,465 $66,744,465 $58,837,403 $58,837,403 $18,641,896 $18,641,896 $21,850,570 $21,850,570 $10,305,000 $10,305,000 $16,573,500 $16,573,500 Source: U.S. Treasury The gym inside the Bristol Boys and Girls Clubs headquarters facility that opened in 2014. The project was funded in part by New Markets Tax Credits. PHOTO | HJ FILE

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