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Travois New Markets provides financing to New Mexico and Hawaii Projects
Travois New Markets, a nationally certified Community Development Entity (CDE) headquartered in Kansas City, recently closed New Markets Tax Credit (NMTC) economic development projects with U.S. Bank and the Indion Group.
“Leaders from the Pueblo of Laguna and the Island of Molokai know you have to be creative to spark development in this economy,” said Travois Vice President of Economic Development Phil Glynn. “Not only do the two projects create jobs themselves, but they will lay the groundwork for future economic development in both of these highly distressed, rural communities.”
The first project, a water/wastewater infrastructure project, is being developed by the Pueblo of Laguna Utility Authority. The utility authority is an independent nonprofit entity, owned by the Pueblo of Laguna, which develops, manages and maintains utilities for the Pueblo of Laguna, the largest of the 19 New Mexico pueblo nations. The pueblo and the utility authority recognized a great need to rehabilitate their water and wastewater infrastructure systems, which are very old and dilapidated and require extremely costly maintenance and repairs. The pueblo has three separate water systems that service its six villages. Each village also has it own wastewater system.
“Through the NMTC Program, the Pueblo of Laguna and the utility authority was able to raise critical funding for its $70 million water and wastewater repair and improvement project,” said Pueblo of Laguna Governor Richard Luarkie. “This was a great opportunity for the pueblo to address these critical infrastructure needs in our community and improve the quality of life for our people. We look forward to future innovative approaches to funding and financing capital needs and improvements on behalf of our community. This demonstrates the willingness and ability of the pueblo to partner with other agencies/entities to secure funding to help meet our needs and obligations to our community and people here in the Pueblo of Laguna.”
“The Pueblo of Laguna has been working to finance and fund its $70 million dollar water and wastewater repair and improvement project for the last couple of years,” said Jim Hooper Jr., chief of operations of the Pueblo of Laguna. “The NMTC program has afforded the pueblo an added opportunity to advance this infrastructure project. The current $7.3 million wastewater project is one component of a 10-year, multimillion dollar infrastructure development that the pueblo is undertaking. NMTC financing will help the pueblo rehabilitate the wastewater lagoons within its six villages, ensuring a safe water and wastewater system for Pueblo of Laguna members for generations to come. This upgrade, to be completed by September 2013, is expected to increase capacity by 60 percent over the next 20 years. The water project will also increase firefighting-
Financing includes a $7.3 million allocation of tax credits from Travois, sponsor capital, and more than $2.1 million of NMTC equity from U.S. Bancorp Community Development Corporation, the community investment subsidiary of U.S. Bank.
“Every community deserves access to basic necessities,”
The second project is the expansion of the Molokai Community Health Center’s (MCHC) multi-building health campus that is located on six acres. MCHC works to improve the quality of life for residents of the Hawaiian island of Molokai, who are predominantly Native Hawaiians. The Native Hawaiian community lags behind other minority groups in the state in factors pertaining to economic success, and the community also suffers from poor health outcomes.
These campus improvements will help MCHC blend Western and Native practices in a state-of-the art facility to help combat the troubling trends that are seen among its low income residents: substance abuse, teen pregnancy, childhood obesity and heart disease. After assembling funds from various sources, MCHC still faced a financing gap and turned to NMTCs for help, and Travois New Markets provided $7.6 million in NMTC financing. Indion Ventures, the NMTC investor, committed $2.07 million of equity in support of the $8.6 million project.
MCHC already offers acute care, dental services, mental health services, pediatric care and dietician services. The coming phases will add a well-baby clinic, a physical therapy pool and general upgrades to numerous campus buildings. NMTC funding will also allow for an expansion of an on-site commercial kitchen to allow local vendors to use the space to prepare food to support food-based micro-enterprises. Decking will be added to provide access to the entire campus for all patients, and it will be compliant to the Americans with Disabilities Act. The campus will now be complete in summer 2013.
“The NMTC financing is a blessing, because it will allow MCHC to provide on-island health care services that are not currently available to the community. Molokai residents have been forced to travel alone to the island of Oahu for health care services. The travel costs to Oahu are a financial burden for many individuals and families, not to mention the burdens associated with leaving your family to seek health care services,” said Tamar deFries, partner at Pacific Growth Associates in Honolulu, Hawaii. “Molokai’s unique health needs stem from the island's geographic isolation and limited resources. The island of Molokai has one of the lowest overall rankings in the state in measurements of economic health, socioeconomic stability and food security. The NMTC financing will support the stabilization of MCHC and the community, because it will build facilities that will provide much needed health care services and establish meaningful employment opportunities.”
“We are so excited to have been a part of bringing the Molokai project to completion,”
About the New Markets Tax Credit Program
The New Markets Tax Credit (NMTC) Program was established by Congress in 2000 to encourage the investment of private capital in designated low income communities in order to create jobs, generate economic activity and improve the quality of services in low income communities and to low income persons. The NMTC Program attracts investment capital to low income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making qualified equity investments in specialized financial institutions called Community Development Entities (CDEs). Capital raised by the CDEs is then used to provide below-market financing to qualified businesses in low income communities. The credit totals 39 percent of the original investment amount and is claimed over a period of seven years. For more information, visit www.cdfifund.gov.
For more information about Travois New Markets, visit www.travois.com.
For more information about Indion Group, visit www.indiongroup.com.
For more information about U.S. Bancorp Community Development Corporation, visit www.usbank.com/