Financing Sources Still Being Sought

Developer wants to build hotel
City trying to get tax credits for investment
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From the article:

"After the state reduced the available CRED tax credit for the Fort Wayne Newspapers printing facility project, city officials could only offer about half of the tax credits they had initially expected for the hotel. Leatherman said that turned out to be a problem for many potential developers."

"As the Harrison Square project begins to take shape, city officials are about to apply to a federal program that could create a low-interest loan or other financing tools to help pay for parts of Harrison Square and other commercial projects in low-income areas."

"Economic development officials are hoping the U.S. Treasury Department gives Fort Wayne income-tax credits from the Community Development Financial Institutions Fund. Similar to low-income housing credits, the income-tax credits are designed to entice commercial investment in traditionally low-income areas."

"The Treasury Department has $3.9 billion in credits available this year for banks, local governments and other organizations that apply. If Fort Wayne receives an allocation, the city would sell the credits to local and national institutional investors. Feasel said that would create a pot of available cash the city could use to finance local projects.

The program distributes 39-percent tax credits that last for seven years. Investors would not purchase them dollar-for-dollar, Feasel said. But if, for example, they were purchased for 70 cents on the dollar, $10 million in credits could be converted to $7 million in cash that could be used for low-interest loans or other financing tools."

"The federal tax credits would join a growing list of inducements the city has at its disposal to entice developers to build in town. The CRED tax credit program is well-known. The city also uses tax abatements and industrial revenue bonds to attract businesses.

The Treasury Department will look at Fort Wayne’s potential development projects as part of its approval process.

Harrison Square could be one of those projects. Feasel said it is part of a low-income area and money raised from the sale of tax credits could be used to finance commercial portions of the mixed-use development."