U.S. Treasury Awards First-ring Industrial Redevelopment Enterprise, Inc. (FIRE) $30 Million In New Markets Tax Credits
First-ring Industrial Redevelopment Enterprise, Inc. (FIRE), announced today that it was chosen by the CDFI Fund of U.S. Department of Treasury to receive a $30 million. New Markets Tax Credit (NMTC) allocation. The allocation will allow FIRE to provide seven-year interest only subordinated gap financing to businesses and non-profits with up to an 85% forgivable loan feature. Projects must have a total project cost of at least $5 million.
“FIRE is looking to provide subordinated low-interest financing, particularly for industrial and commercial businesses that need access to more capital. FIRE is looking to subordinate its loan to banks to help finance real estate and/or equipment with the possibility of also including working capital. FIRE-targeted service areas are essentially older neighborhoods in Milwaukee, Racine, and Kenosha counties,” stated John Stibal, President of FIRE. “These funds are truly an economic tool that can bridge that gap of a deal and bring the benefit of investment to neighborhoods in need of jobs and growth.”
FIRE was selected through an annual competitive process by the United States Treasury’s Community Development Financial Institutions (CDFI) Funds. FIRE was one of only 102 organizations that was selected through a nationwide competitive application and rigorous review process competing against major banks, state finance agencies, and national development private and public entities to receive a tax credit allocation under the latest round of the NMTC program. FIRE is now the only annual competitive applicant to have been selected 10 times in a row.
FIRE participates in the NMTC program to support a mission to foster redevelopment on brownfield sites and incentivize investment that creates and attracts needed family-supporting jobs to older neighborhoods. Since 2007, FIRE has received nearly $458 million of tax credits to invest into older distressed neighborhoods.
“Tax credits are often the fuel that can bring projects to life, but most importantly, generating substantial long-term benefits to some of our most neglected neighborhoods,” said Stibal. FIRE can provide subordinated financing and potentially fill about 20% of a project’s costs. Tax credits are often the critical margin that make projects feasible. FIRE initially provides a very low, interest-only loan for seven years. At the end of the seven-year period, FIRE generally forgives up to 85% of the principal.
“We are pleased that the U.S. Treasury CDFI Fund recognizes the contributing efforts of FIRE and the hard work of our investments that have been diverse and impactful in serving multiple industries in the older neighborhoods throughout Racine, Kenosha, and Milwaukee counties,” said FIRE Board Chair Mickey Czaplewski.
The NMTC Program is a powerful federal economic development tool designed to promote development into America’s underserved and distressed communities. NMTCs generate private equity when leveraged with other sources of capital to create flexible financing structures for projects in these areas. Federal data show that for every dollar of allocation provided under the NMTC program, an additional $8 of private investment is leveraged for the economic development of these communities.
The NMTC program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in FIRE. FIRE then loans these funds to make equity in investments into vehicles known as Community Development Entities (CDEs).
FIRE has provided low, interest-only subordinated loans to projects such as Charter Wire, Super Steel, JF Ahern, Palermo’s Pizza, Festival Foods, Granite Hills Behavioral Health Facility, Cherry Water office complex, Beyond Vision, and Tramont Manufacturing.
Headquartered in West Allis, WI, FIRE was formed in 2007 to attract tax credits and other funding incentives for projects that can demonstrate significant and measurable community impact. The company provides below-market rates and terms for equity-equivalent, senior, and subordinate loan products in industrial, healthcare, commercial, mixed-use, and other projects. Projects must be located in older distressed neighborhoods within its four-county service region.
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. It has not been verified for its accuracy or completeness.
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