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Tax credits at work in the neighborhoods

The City’s Office of Economic Development (OED) has a range of tools to assist businesses and industries in Seattle, with creating jobs, vitalizing neighborhoods, and growing an ever-stronger economy. One of those tools is financial support through allocation of federal New Markets Tax Credits (NMTC). The City’s New Markets entity, the Seattle Investment Fund (SIF), received $51 million in 2008, then an additional $28 million in 2014 to invest in development located in or serving low income communities.

OK, banker-types, this part is for you — the federal NMTC program works by providing an interest-only, seven-year loan, for which approximately 30% is permanent equity that does not need to be repaid. In order to qualify, projects must be located in areas of the city where residents have low incomes and high levels of unemployment; be ready to build; include at least 20% non-residential income; and, preferably, create or retain jobs and serve as an anchor for further development in the surrounding neighborhood. Banks put up the money in the NMTC pool and, in return, receive a tax break from the federal government.

I serve on the SIF committee as chair of the Council’s economic development committee. We review the applications for these funds and approve the investment decisions. Here’s where we’re investing the City’s most recent $28 million allocation:

Washington Hall: $9 million

Since opening in 1908, Washington Hall has hosted theater, dance, boxing matches, jazz performances, punk shows and everything in between. Billie Holiday performed there, as did a young Jimi Hendrix. My favorite memories of Washington Hall are from its time as home to On The Boards in the 1980s and 1990s. Located near 14th and Yesler, the building was designated as a landmark by the City and is currently home to the arts and community-based nonprofits 206 Zulu, Hidmo and Voices Rising. However, the building is in need of significant repair and renovation. The NMTC will make it possible for this historic building to continue to serve the community today and into the future.

Neighborcare’s Meridian Center for Health: $9 million

Located in the Northgate Neighborhood, the Meridian Center will provide integrated health and human services to low income patients through partnerships with Seattle/King County Public Health and Valley Cities Medical. This new facility will replace and expand the existing Neighborcare center in Greenwood and contain the existing Public Health Center that’s currently onsite. The Meridian Center will include expanded primary care, a new dental clinic, mental health and recovery services, nutrition services for women, infants and children, maternity support, and more. 

The Pacific Tower Community Health and Innovation Center:  $10 million

The Pacific Tower, located on North Beacon Hill, has had a storied history as a Marine hospital and the former home of Amazon before Amazon found South Lake Union. The building is owned by the Pacific Hospital Public Development Authority with rent proceeds funding grants to groups working to close health disparities in King County. That funding happens only if the building has renters, though. The new Community Health and Innovation Center pays rent AND trains the next generation of healthcare staff for our region. The State’s Department of Commerce has signed a lease for 13 floors of the building (a PacMed clinic operates on the ground floor). Commerce has an agreement with Seattle Central College to expand and consolidate their health care education and training programs in the tower; Neighborcare for administrative offices and to create an on-site dental teaching clinic; Cross Cultural Health Care Program for medical interpreter training; Building Changes for their work on housing solutions; Fare Start to expand its culinary training program and produce meals for students and low-income people; and a host of smaller nonprofits. The Seattle Central College expansion will be significant, including three new programs in Nursing, Community Health Education, and Community Healthcare Services Management. They expect to increase enrollment by a whopping 67%.  

We approved investments in these projects because they meet the basic requirements, but, also, because each will be a catalyst in a neighborhood and in industry. None of these are great candidates for conventional financing. New Markets Tax Credits have proved to be a critical tool for the City to assist projects like these. I have my fingers crossed that Congress will see value in approving another round of tax credits so Seattle can apply and continue investing in projects that keep our history alive, bring health care to those who need it, and train the workforce of the future.

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