Southern Dallas is ripe for development and could lead the region into the future—that was the message at a recent panel event on how commercial investors can leverage New Market Tax Credits (NMTC).
The NMTC program functions as a public/private partnership and is administered by the U.S. Department of Treasury.
Each year the federal government awards tax credits to community development entities (CDE), which work with investors to monetize those credits. That money is invested in business and real estate projects in underserved communities.
As an example—if the government allocated $10 million dollars to a CDE, at a fixed rate of 39%, it would generate $3.9M dollars. After fees, the net investment to the CDE’s project would normally be between $1.5 to $2 million.
“I see the Southern sector as a key part of the future growth of North Texas,” said Tyrus Sanders, commercial banking leader and market executive for Regions Bank in Dallas. “It won’t happen overnight, but the area is primed for development because of the amount of land that’s available.”
Areas of focus for CDEs include manufacturing, education, and healthcare; NMTCs typically fund up to 20% of the cost of a project.
One local example from 2021—Shelter Ministries of Dallas (SMD) successfully used NMTCs as a vehicle for updates and expansion. The SMD makeover resulted in a new 60-thousand square-foot Austin Street Center for Community Engagement. It became a 24/7 “client-focused” facility that provides not just shelter, but health and wellness services for one of the city’s most vulnerable populations.
“New Market Tax Credit programs support greater access to quality jobs, affordable housing, healthcare and additional essential services,” said Sanders. “They are a catalyst in revitalizing neighborhoods and building stronger communities empowering more people and families to thrive, and that benefits everyone who calls Dallas home.”
For additional information about the session, contact Courtney Nolan.
Voices contributor Nicole Ward is a data journalist at the Dallas Regional Chamber.
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