US Treasury issues $65 million to Montana-Idaho firm
The Montana and Idaho Community Development Corporation recently received $65 million in New Market Tax Credits from part of the annual allotment distributed by the U.S. Treasury.
The nonprofit organization with hubs in Missoula, Bozeman and Boise will sell the tax credits to investors, and use the cash they get in exchange to offer subsidies of around 15 to 20 percent to projects that will stimulate economic development in Montana, Idaho and Wyoming, said director David Glaser.
Exactly how the funds are distributed in that wide swath of the Mountain West depends on which applicants are approved and able to collect the rest of the financing for their project the fastest, Glaser said.
“It was a good day for Montana, for sure,” he added.
He anticipates the funds they get from selling this round of tax credits will be fully committed in about eight months, so developers that think they might qualify should reach out to the organization immediately.
“We were on the phone with a couple of projects yesterday that are ready to go,” Glaser said. “If there is a project out there that is thinking this might be a fit, they should call right now.”
As the federal tax plan was being renegotiated, there were some fears that this program could be dealt a deathblow. Glaser credits both of Montana’s senators, Jon Tester and Steve Daines, with advocating for the program’s survival, which has led to about $280 million of financing in Montana.
Glaser said there were some impacts they were still identifying — like the change in the corporate tax rate, which led the development corporation to fetch a lower value for the tax credits — but on the whole, the changes to projects happening in Montana were negligible.
“Short answer is the projects in Montana aren’t going to see a difference, and this really powerful tool remains,” he said.
Like any market, the one for tax credits is volatile so he wasn’t sure exactly how much cash they would get from selling the $65 million worth of tax credits.
Some past projects from the Flathead Valley include the Red Lion Inn and Mission Valley Aquatics in Polson. Glaser said they offer financing to a huge variety of firms for both non-profit and for-profit ventures, but they do have to meet certain criteria.
The full costs for the project have to ring up to at least $4 million. They finance projects far larger than that as well, but that is the minimum threshold for them to provide the required 15 to 20 percent.
The projects also have to have a demonstrated community impact that is aligned with stated goals of the community, such as an increase in affordable housing, revamping abandoned storefronts or job development in a certain sector. Finally, the projects have to prove that without this financing they might not come together.
Once they get approval, developers have to obtain the rest of the financing needed for the project. Once they can prove that financing is in place, Glaser’s organization releases their portion of the money.
In 2016, his organization got about $90 million worth of tax credits and they are distributing the last of it right about now. He’s happy with the amount they got this year, but said he doesn’t anticipate it will last long. He said he hoped the impacts would be felt throughout their service area.
Glaser couldn’t say exactly how much of the financing would end up in the Flathead since it is distributed on a first-come, first-serve basis, but he was sure that the Flathead would receive at least some of it. “As we speak, we are working on a project in Kalispell,” he said.
Reporter Peregrine Frissell can be reached at (406) 758-4438 or pfrissell@dailyinterlake.com.