Phoenix Community Alliance President Donald Keuth Jr. tells GlobeSt.com that the allocation, the most awarded out of 347 program applicants, is designed to improve economic conditions in poorer neighborhoods by encouraging private investment in the business community. "It's a great start," said Keuth, who has already fielded several calls from potential participants. "In its simplest terms, the overall goal is to bring new businesses and jobs to these targeted areas."
Keuth said the program, dubbed "The New Market Tax Credit Program" and modeled after a federal HUD housing program, will target areas primarily in central, south and west Phoenix where the average income is 80% below the median based on 2000 Census data.
Phoenix Community Development and Investment Corp., of which Keuth is a member, will oversee the program. Keuth said the group is preparing details of the program and expects to allocate its first tax credits by the end of the summer. "We would like to allocate these credits in three areas--to venture capital, for small business needs and for economic development and redevelopment," he said.
The program will have three components with business and commercial real estate development loans of between $1 million and $35 million; small business loans between $35,000 and $1 million and venture capital financing.
Although details have not been fully worked out, Keuth said the program does have some restrictions. The tax credits cannot be used to develop liquor stores, massage parlors or gambling venues and can only be used for residential development only if the housing is part of a mixed-use project, Keuth said.
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