New Markets Tax Credit
EMDC Affiliates Certified as Community Development Entities
BANGOR, ME – Eastern Maine Development Corporation (EMDC) received word that three of its affiliates have become certified as Community Development Entities (CDE). The designation comes from the U.S. Department of the Treasury, which oversees the Community Development Financial Institutions Fund (CDFI fund). The affiliates, Acadia Capital Management I, Inc., Acadia Capital Management II, Inc., and Acadia Capital Management III, Inc., will be able to act as an intermediary for procuring loans, investments, or financial counseling in Low-Income Communities.
“This opens up new opportunities for Eastern Maine,” said Micki Sumpter, Chair of the EMDC Board of Directors. “We have a tremendous asset in our people, and the natural resources in this area. The CDE designation gives developers and business owners even more reason to look at this region for investments.”
According to the U.S. Department of the Treasury, certification means than an organization meets the CDE requirements set forth in the statute governing the New Market Tax Credit (NMTC) Program and the CDFI Fund’s CDE Certification Guidance Document. The requirements state that the applicant must be a legal entity at the time of application, have a primary mission of serving Low-Income Communities (LICs), and maintain accountability to the residents of its targeted LICs.
The CDFI Fund completely reviews applications and awards allocation authority to qualified CDEs. Congress authorizes the total amount of annual credit authority to the New Market Tax Credit (NMTC) which funds the CDFI Fund. From there, CDEs determine which projects get funded from the amount of the allocation authority the CDE has received. CDEs then use the Qualified Equity Investments to make a loan or equity investment in a project or business called a Qualified Active Low-Income Community Business. The financing can be used for a number of purposes.
The benefit to developers and business owners is more flexible financing than conventional methods. Low-income communities see benefits as CDEs will often select projects based on the expected community impact. The certification is effective indefinitely.
EMDC’s CEO, Michael Aube said, “The affiliates have already begun the process of vetting impactful projects, establishing relationships with collaborative partners, and speaking with potential investors. NMTCs have historically done an excellent job of spurring private investment -- $8 for every $1 invested by the federal government, so this will go a long way in our region.”
Dr. Brien Walton is currently facilitating coordination efforts between projects, partners, and investors. Parties interested in opportunities that can be supported by a CDE should contact him at 207-404-5699.