News & Press
Plan to tap federal tax credits advances
By Aaron Corvin, Columbian port & economy reporter
Published September 4, 2014, 3:18 PM
Work to tap a federal program to spur private investment and to create jobs in east Clark County is moving forward with the establishment of an agency to manage the effort and final touches on a business plan that's expected to be filed with the U.S. Department of the Treasury in October.
The goal is to secure funding for local projects using the federal New Markets Tax Credit program. Those credits lower the cost to private investors of injecting new or increased capital into job-creating projects in low-income neighborhoods that may otherwise struggle to attract conventional financing.
The cities of Camas and Washougal, and the Port of Camas-Washougal, have each agreed to pursue the program, allocating a total of $87,500 in one-time seed money to the Camas-Washougal Economic Development Association.
The association is using the money to pay a consultant — Portland-based Pilot Management Resources LLC — to navigate the federal program's requirements. Those requirements include launching a Community Development Entity and identifying eligible projects.
The development entity, which would apply to U.S. Treasury for the right to sell tax credits, was established in June as a limited liability company called Columbia CDE, said Paul Dennis, president and CEO of the Camas-Washougal Economic Development Association.
The next step is to file a business plan, by Oct. 1, with the Treasury department. That key document will make the case for using the federal tax credit program in east Clark County, spell out who would be involved locally in directing and advising the program, and outline the types of projects that could be funded.
Dennis said the Treasury department allocates tax credits based on the authenticity of the overall business plan. "They don't pick and choose which projects to fund," he said. "They decide whether to support your business plan." Once a Community Development Entity receives authority to sell a certain amount of tax credits, Dennis said, it gets to decide the projects for which they'll be used.
Not all of the details have been hammered out, but four projects have emerged that could benefit from the federal tax credit program. They are:
• Two industrial buildings — one 30,000 square feet, the other 60,000 square feet — at the Port of Camas-Washougal's Steigerwald Commerce Center.
• A new library building, potentially designed to include a mix of uses, in downtown Washougal.
• A mixed-use building on undeveloped blocks on Northeast Third Avenue in downtown Camas.
In terms of readiness, Dennis said, the two industrial buildings are furthest along.
"We know which projects are likely to be permit-ready, and those that will still be in concept stage," he said.
Members of the governing board of Columbia CDE, which will operate as a private organization, have yet to be finalized, Dennis said.
The board's job will be to analyze project proposals, he added, "to ferret out what are sound projects and what aren't."
The advisory board that will help guide the Columbia CDE's board, however, has taken shape. The members of that board, whose job it will be to ensure the CDE's actions benefit the community, are:
• Cathy Garland, regional director of Western Washington for the Children's Home Society of Washington.
• Bill Macrae-Smith, Port of Camas-Washougal commissioner.
• Wanda Nelson, center manager of The Meals on Wheels People Camas-Washougal.
• Steve Hogan, Camas city councilor.
• Amber Barnes of the Jack, Will and Rob Boys & Girls Club.
• Lloyd Halverson, board member of the Vancouver Housing Authority.
• Brent Boger, Washougal city councilor.
Dennis has previously said the Camas-Washougal area would be the initial focus of efforts by the development entity to attract private funding. However, the development entity could potentially stimulate investment in Vancouver, Ridgefield and other areas.
Congress created the New Markets Tax Credit program in 2000. The program allows individual and corporate investors to receive a tax credit against their federal income tax returns in exchange for making equity investments in development entities. The credit totals 39 percent of the original investment amount and is claimed over a period of seven years.
In April 2013, for example, the U.S. Treasury announced $3.5 billion in New Markets Tax Credit awards nationwide. The awards provided 85 organizations with tax credit allocation authority.
Project applications undergo a competitive process. In Washington and Oregon, several projects have used the program, including Farwest Steel Corp., which in 2011 obtained $48 million in federally subsidized financing to build and equip its steel fabrication plant in Vancouver.