East Clark County leaders are closer to tapping a federal program to spur private investment and to generate jobs. They’ve secured funding for a consultant’s advice and hope to establish a new agency to manage the economic-development tool by the end of June.
At issue is the potential use of the federal New Markets Tax Credit program. It aims to lower the cost to private investors of injecting new or increased capital into job-creating projects in low-income neighborhoods that may otherwise struggle to attract conventional financing.
The cities of Camas and Washougal, and the Port of Camas-Washougal, have each agreed to pursue the program, allocating a total of $87,500 in one-time seed money to the Camas-Washougal Economic Development Association. The association is using the money to pay a consultant — Portland-based Pilot Management Resources LLC — to navigate the federal program’s requirements.
Those requirements include identifying eligible projects and studying the feasibility of launching a Community Development Entity. That entity, which could be established by the end of June, would apply to the U.S. Treasury Department for the right to sell tax credits.
Summer possibilities
If all goes as planned officials could, by August or September, submit as many as four local economic-development projects for the federal government’s consideration — one in Camas, one in Washougal and two at the port, Paul Dennis, president and CEO of CWEDA, said last week.
Project details will emerge, and city and port officials will receive progress reports, in the weeks and months ahead. The port and city of Camas are unanimously on board, while the Washougal City Council narrowly approved its part in the process. “So far, everything’s looking pretty good,” Dennis said.
The Camas-Washougal area would be the initial focus of efforts by the CDE to attract private funding, he said. However, the organization would have the capacity to stimulate investment in Vancouver, Ridgefield and other areas. “We’re setting this up geographically so that it could do any project that qualifies within Clark County,” Dennis said.
The CDE would likely be structured as a private agency. Its staffing would depend on the size and numbers involved in an economic development project that receives tax credits.
The CDE, which would include its own governing and advisory boards, would sell tax credits to private investors and plow the proceeds into economic-development projects that benefit low-income communities.
Program not new
CDEs are not a new tool. Congress created the New Markets Tax Credit program in 2000. The program allows individual and corporate investors to receive a tax credit against their federal income tax returns in exchange for making equity investments in CDEs. The credit totals 39 percent of the original investment amount and is claimed over a period of seven years.
In April 2013, for example, the U.S. Treasury announced $3.5 billion in New Markets Tax Credit awards nationwide. The awards provided 85 organizations with tax credit allocation authority. Project applications undergo a competitive process.
In Washington and Oregon, several projects have used the program, including Farwest Steel Corp., which in 2011 obtained $48 million in federally subsidized financing to build and equip its steel fabrication plant in Vancouver.
CWEDA — a creation of the Port of Camas-Washougal and the cities of Camas and Washougal — recently requested $87,500 in seed funding from the port and cities to hire a consultant to help launch a Community Development Entity.
The port is paying $43,750, and the cities are kicking in $21,875 each under a professional services agreement with CWEDA. In April, the port’s Board of Commissioners and the Camas City Council both voted unanimously to approve the deal. The Washougal City Council voted 4-3 to approve it.
