McCormack Baron Salazar Wins $50 Million in U.S. Tax Credits

McCormack Baron Salazar (MBS) was awarded a $50 million allocation of tax credits by the U.S. Treasury Department Oct. 21 under the 2008 New Markets Tax Credit program (NMTC). The program recognizes companies for their revitalization efforts in low-income rural and urban areas throughout the country. Almost $300 million in tax credits were awarded to Missouri organizations.
With the tax credits allocated through the NMTC program, McCormack Baron Salazar plans to invest in retail, commercial, educational and for-sale revitalization projects across the country, including St. Louis. This is the third such allocation received by MBS: the firm received $60 million in allocations in each of the prior two rounds of competition. The company has used its first allocation, received in 2006, to develop projects in North Carolina, Tennessee and Missouri.

Richard Baron, MBS's chairman and CEO, was happy to receive this newest allocation. "We're doing such vital work in cities like St. Louis, New Orleans, Memphis and Los Angeles. These credits will enable us to continue our revitalization efforts, even in this difficult economic environment."

The company has a pipeline of development opportunities in which to use the credits, including Missouri, California, Louisiana, Tennessee, Pennsylvania, and the District of Columbia. Through its Community Development Entity (CDE) that received the award, MBS has appointed a nationally recognized advisory board to help select the highest impact projects for the use of the tax credits.

"New Markets Tax Credits have allowed our firm to expand its efforts to bring new commercial and economic activity into our neighborhoods around the country," said Jonathan Goldstein, MBS's senior vice president. "We hope to continue to invest in projects of highest importance to these communities, with the continued support of the Treasury Department."

McCormack Baron Salazar has been leading efforts to revitalize a number of communities in the City of St. Louis. Major developments in the St. Louis area have included Westminster Place, a 470-unit, multi-phased community located in the once deteriorated Westminster area; Murphy Park, a 530-unit mixed income, multi-generational community at the site of the former Vaughn Housing development; and Renaissance Place, a 510-unit, mixed income, multi-generational community located on the north border of the city's Grand Center Arts and Entertainment District.

New Grand Center Office Building

Also on Oct. 21, MBS and the St. Louis Housing Authority (SLHA) announced that they have closed financing and begun construction on a new office building in the Grand Center district of St. Louis. The building creates a new headquarters for the SLHA at the northwestern boundary of the Blumeyer HOPE VI Revitalization Plan area, completing the physical transformation of the original Blumeyer project site into the new Renaissance Place at Grand community, and adding new commercial and service amenities.

"The development of new office space for the St. Louis Housing Authority has been a goal of the Authority for some time. It is even more attractive because it will be a cornerstone of the Blumeyer Revitalization and will be a catalyst for employment and business opportunities for our residents," said Cheryl Lovell, executive director of Saint Louis Housing Authority.

Located just east of the intersection of Page Avenue and North Grand Boulevard and adjacent to the 512-unit Renaissance Place at Grand, the $9 million, 37,000 square foot SLHA office building w ill include a full-service National City Bank branch and space for a café to serve the SLHA’s 90 employees, visitors and the surrounding community. The Blumeyer Village Tenants Association (BVTA) was instrumental in bringing the project to fruition. Urban Strategies, Inc., in conjunction with the BVTA, is working with community residents and entrepreneurs to link them with employment opportunities at the site, and to encourage wider use of traditional banking facilities.

SLHA selected MBS through a competitive RFQ process. The developer has deep local experience working with SLHA; its developments include the redevelopment of Vaughn public housing as the Murphy Park mixed income community, and the transformation of Blumeyer public housing as the new Renaissance Place at Grand mixed income community. The firm also specializes in urban commercial and mixed-use developments, including the 6 North development near St. Louis University, the Big Brothers Big Sisters / Woolworth Building at Grand Center, and The Westin/Cupples Station project next to Busch Stadium. The combination of this experience, together with the firm’s commitment of New Markets Tax Credits to support the project, was instrumental in bringing the final pieces together.

"Through the use of New Market Credits, McCormack Baron Salazar was able to support the Authority’s goal, leverage private equity to close the gap in funding, and realize the commitment made to the residents and the Housing Authority. To our knowledge, this project represents the first in the country to combine New Markets Tax Credits with HUD Capital Funds in a mixed-finance transaction," said Vince Bennett, Executive vice president of MBS.

In addition to HUD Capital Funds and other SLHA resources, the SLHA office building is financed by tax credit equity from US Bancorp Community Development Corporation
(USBCDC), an affiliate of US Bank, from the investment in an allocation of NMTCs provided by MBS CDE; and funds from the Greater St. Louis Regional Empowerment Zone.
Completion is anticipated in late summer, 2009.

Founded in 1973, McCormack Baron Salazar, a St. Louis-based nationally-recognized urban housing development and management company, has completed over 131 projects in 33 cities with development costs of $2 billion. The company's mission is to rebuild urban neighborhoods in central cities across the United States that have deteriorated through decades of neglect and disinvestment. In partnership with communities, MBS brings vision, experience, and commitment to the challenge of community revitalization. For more information visit http://www.mccormackbaron.com . [ 

Columns