by Bradley Parsons
Staff Writer
The City will emphasize past partnerships with the private sector when it applies next week for federal tax credits designed to boost private investment into low-income areas the mayor’s chief of special initiatives said Thursday.
Susie Wiles said she hopes the public/private collaboration that inspired and produced the application will highlight the City’s capability to work with private investors. Balancing time among preparing a budget, defending a courthouse and hiring staff, Wiles said the mayor’s staff needed a “Herculean effort” and outside help to apply for entrance into the Treasury Department’s New Markets Tax Credit Program by the Sept. 30 deadline.
“Most communities work years to develop the kind of partnerships necessary to secure these credits,” said Wiles. “We had 90 days.”
If approved, the program would accredit the City as a Community Development Entity. The City would then be in position to provide tax credits for investment into qualifying businesses. The program is designed to spur private investment into low-income community businesses.
The program will provide credits for up to $15 billion in nationwide investments over seven years. Capital investments could receive 5-percent credits for the first three years, then 6 percent credits for the remaining four. Wiles said the credits guarantee a return of up to 39 percent to investors who support the qualifying businesses.
To advance the City’s chance to receive the highly competitive credits, Mayor John Peyton has taken steps to create a founding board of directors. The non-profit governance board, Jobs for Jacksonville, Inc., will administer the credits if the City’s application is successful. Just in creating and seating the board, the City will present to the Treasury a cohesive management structure according to Bussells in an e-mail sent to potential board members.
In its application packet, the Treasury identifies management capacity as one of four key criteria upon which applications will be judged. The reviewers will consider the qualifications of the applicant’s principals, its board members and its management team.
Additionally, the Treasury said it will weigh the City’s track record in funding low-income markets and securing private investment into those markets. Wiles said Jacksonville’s ongoing use of empowerment-zone tax credits should appeal to the reviewers.
Given the limited time frame in which the application was assembled, Wiles said the City may have to wait to receive the credits. The current applications went toward the second competitive round. The first two rounds will provide credits for $6 billion in investment, meaning there will still be $9 billion waiting to be allocated in future rounds. Wiles said the credits should be awarded by the end of the year.
Whether or not the City finds success this year, Wiles said the administration’s crash course would pay dividends for future attempts.
“This whole process has been a great exercise for everybody involved,” said Wiles. “Whenever the next round is announced, we’ll be ahead of the curve.”