One Cleveland fund will receive $35 million in tax credits. A second will receive $18 million. The New Markets Tax Credit program encourages private investment in real estate projects and job creation in economically hard-hit areas.
A planned hotel in University Circle is one of several projects to benefit from past rounds of New Markets Tax Credits awards. The U.S. Treasury announced $3.5 billion in awards today, including $53 million in tax credits for the Cleveland area.Investment funds in Cleveland have won $53 million in federal tax credits meant to encourage economic development and job creation.
The U.S. Treasury announced the awards Thursday, as part of a $3.5 billion allocation of New Markets Tax Credits across the country.
The program offers a tax benefit to individuals and corporations that invest in areas with high poverty and unemployment. In Cleveland, past rounds of credits have helped pay for such projects as apartments, hotels and industrial parks.
The biggest local beneficiary of Thursday's announcement was the Cleveland New Markets Investment Fund, part of Cleveland Development Advisors. The group is an offshoot of the Greater Cleveland Partnership, the region's chamber of commerce. It won $35 million in tax credits for real estate and economic-development projects.
Using previous allocations totaling $40 million in credits, Cleveland Development Advisors has invested in 20 projects, including renovation of the Capitol Theatre in Cleveland's Gordon Square Arts District and transformation of the old Tudor Arms building near University Circle into a hotel.
"We will hit the ground running and start meeting with developers and businesses that are looking to expand," said Yvette Ittu, president of Cleveland Development Advisors. "We are hoping that we can start to make some commitments in the next 30 days or so."
The Treasury also awarded $18 million in credits to the Northeast Ohio Development Fund, a community-development entity affiliated with the Cleveland-Cuyahoga County Port Authority. The port is focusing on job-creation and industrial projects and is still rolling out investments from a previous, $30 million tax-credit award.
About $10 million from that past round of credits is going into the Allen Theatre renovation and expansion at PlayhouseSquare, a project that includes the Cleveland Play House and Cleveland State University's undergraduate drama and dance programs. Another $10 million in credits will help Miceli Dairy Products finance the expansion of its cheese-making operations off Buckeye Road.
The new credits will help the port support manufacturing, international trade and advanced energy, said Brent Leslie, the chief financial officer.
"With an improved economy, we're hoping that there's a larger volume of projects to choose from," he said.
With limited money for development and business expansions, the New Markets Tax Credit program has gained more attention as a key tool for getting projects done. Established by Congress in December 2000, the program offers a credit equal to 39 percent of the cost of an investment. Investors claim the credits over seven years.