FORT WAYNE — The city of Fort Wayne will receive $33 million in federal tax credits it can sell to help pay for future development projects, officials announced Wednesday.
The funding comes from New Markets Tax Credits, which are designed to spur economic development in low-income areas. Officials said 310 organizations nationwide applied for the tax credits, but only 87 were awarded. Fort Wayne is the only entity in Indiana to receive part of the $3.5 billion.
“This is a major win for the city of Fort Wayne,” Mayor Tom Henry said. “This will create new jobs and add to the quality of life.”
The funding works like this: The city’s New Markets Revitalization Fund will sell the tax credits to investors who can then get a credit against their federal income taxes. The city will then use the proceeds of the sale to help finance eligible commercial projects.
The projects must demonstrate significant positive effects on the community as a whole, such as job growth or benefits for low-income residents.
This is the second time the city has been awarded New Markets Tax Credits. In 2008, $15 million in credits were used to close the financing gap for The Harrison, the mixed-used development downtown that is now home to apartments, a law firm, a credit union and a restaurant-bar.
“This highly sought-after funding gives us a significant competitive advantage when working to attract investment and jobs to our community,” said Sharon Feasel, director of the Fort Wayne New Markets Revitalization Fund LLC. She said developers from across the country are already calling the city.
“The phone’s been ringing steadily. Developers are very interested in partnering with us,” she said.
Feasel said Fort Wayne beat a lot of others vying for the money because of the projects it has done already and the others it is working on, and because it handles the credits itself rather than having a bank or a nonprofit take charge.
Community Development Director Greg Leatherman said developers across the country scour the list of awardees because the tax credits are so valuable.
City officials said they will work to allocate the funding for multiple projects over the next two to three years.