.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} How long did it take to invest $45 million of federal tax credits in projects around Iowa? Just over a year, and that has been good news for the state, say those involved with the projects.

Six economic development projects throughout the state – including two projects on the east and south ends of downtown Des Moines – are using investment funds from the New Market Tax Credits Program for an extra financing push to move the projects forward. Created by Congress in 2000 and distributed through the U.S. Treasury Department’s Community Development Financial Institutions Fund, the tax credits are designed to attract private capital investments in low-income or rural areas throughout the country.

Earlier this month, Iowa Community Development LC, a nonprofit organization formed to distribute the funds in Iowa, made multimillion-dollar commitments to bring a potential wind-turbine manufacturer to Spencer and a plastics company to Centerville, which completed the allocations of the $45 million.

In August, Village Place, a three-building East Village development, was the first of the projects to close on its tax credit arrangement, followed last week by the Adler Theater renovation project in Davenport.

For the $15 million East Village project, Iowa Community Development allocated $7 million in tax credits, which Village Place LLC used to secure a low-interest loan. The project includes a five-story mixed-used building, a two-story retail and apartment building and a 204-vehicle parking ramp.

“Without this lower cost of financing, it would not have been economically feasible to build this,” said John Burgeson, a principal in the project. “We would have had to scale back with a parking lot and perhaps a two-story mixed-use building. … I believe in this product, because it’s a way to revitalize areas that normally wouldn’t be, because the cost would be too high.”

In another Des Moines project, Minneapolis-based Sherman Associates has received a commitment of $9 million in tax credits for the redevelopment of the 125-acre Riverpoint West brownfield site. Jackie Nickolaus, a Sherman project manager, said a team of attorneys is working toward a closing next month on the financing package.

“In return for receiving those credits, our investors will put about $2.5 million in equity into the project in the first phase,” Nickolaus said. Closing on the tax credits will enable infrastructure work to begin on Gray’s Lake Office Park and Gray’s Lake Landing Phase I, which has an estimated cost of nearly $34 million.

West Bank, which purchased the $7 million in tax credits allocated to Village Place and provided a loan to that project, is one of several smaller Midwest banks that are becoming involved as both investors and lenders through the New Market program.

“There is an education process that a bank has to go through to understand how the tax credits work in conjunction with the loan you’re making to the project,” said Tom Stanberry, West Bank’s president and CEO. For its investment of $7 million, the bank will receive a 39 percent tax credit totaling approximately $2.7 million over seven years.

“Using New Market tax credits doesn’t in any way change the underwriting process a bank goes through,” Stanberry added. “A project must still have the same cash flow, creditworthiness. The difference (for the bank) is it’s a different way of obtaining a return on a project.”

John Rigler, chairman of Iowa Community Development, said word is beginning to spread about the program among both economic development organizations and banks that may potentially invest in projects.

“We’ve gotten the word out, and people are coming to us now with applications,” he said. “We feel very good that in the course of one year we were able to commit the entire $45 million.”

Rigler said his organization plans to request between $75 million and $100 million in tax credits for 2008.

For more information about using the New Market Tax Credit program in Iowa, contact Dan Robeson at Iowa Business Growth Co., 223-4511.