Coastal Enterprises Inc., through its subsidiary CEI Capital Management LLC, was among the top four New Markets Tax Credit recipients chosen to receive the highest allocations in the U.S.
Of the 99 recipients of New Markets allocations, Community Development Financial Institutions Fund Director Donna Gambrell tapped CEI for $77 million in tax credits. These will be deployed in Maine, New England and other U.S. locations over a five-year period.
“The New Markets Tax Credit continues to be a tool for job-creation and economic revitalization in areas that struggle to attract investment because of poverty, unemployment and a lack of opportunity,” Gambrell said.
CCML was chosen for a top-level award based on its focus on funding meaningful projects in highly distressed rural locations and for its ability to sustain its promised rate of successful transaction closings, even in the face of a challenging economic environment.
CEI President Ron Phillips was one of the original architects of the new markets program in 2000.
“This national program has been so successful in its efforts to stimulate private investment in community projects that we are pursuing a similar tax credit program here in Maine,” said Phillips. The proposed Maine New Markets Capital Investment Program would “create and save jobs in Maine for this generation and the next, help Maine banks invest in more Maine businesses, attract lenders and investors to Maine ‘from away’, and finance projects that can’t find capital in this tight credit market,” according to Phillips.
Charlie Spies, Managing Director of CCML for the past five years and former CEO of the Finance Authority of Maine, said, “we are honored to have been chosen once again to provide a significant vehicle for private investment in low income areas of Maine and New England. Rural areas like Maine spawn innovation and entrepreneurship, sometimes out of necessity. We are proud to support this heritage of hard work and strong values.”
The program typically focuses on significant projects of $8 million or more, but can sometimes accommodate smaller projects. The NMTC subsidy often results in a one to two percent reduction in interest rate to the borrower, and accounts for approximately 25 percent of the total project funding in the form of low-cost financing, through the sale of the tax credits. Often terms for repayment of the tax credit subsidy can be flexible and favorable to the borrower, at the end of the seven-year tax credit compliance period.
Individual and corporate taxpayers are recruited to invest in NMTC projects through the use of the tax-credit. Maine projects will include manufacturing, retail, community services facilities and natural resources projects. Maine will be targeted for a significant portion of these the CEI investment dollars.
