Thanks to a $40 million award from the US Department of the Treasury, businesses looking to locate in the largest city in Kitsap County are now eligible for special below-market interest rate loans, and investors can get 39% in tax credits.
Program Background
The New Markets Tax Credit program was established in 2000 by the US Department of the Treasury to help cities attract new businesses to urban renewal areas. Kitsap County NMTC Facilitators I, LLC, formed by the City of Bremerton's Community Renewal Agency, is one of only 62 organizations nationwide a and the only organization in the Puget Sound region a that was awarded the tax credits. The $40 million award is the largest in Washington State.
How The Program Works*
For Businesses Locating In Bremerton:
- XYZ Company decides to relocate to Bremerton; needs $10 million to construct headquarters
- Applies to fund, approved for $10 million loan, with interest rate 1.5-3% lower than market
- Saves about $1.3 million in interest over 7 years
- Interest-only payments for 7 years
For Investors:
- ABC Bank hears about Bremerton's special tax incentives
- Invests $10.75 million in Kitsap County NMTC Facilitators I, LLC for loan to XYZ Company
- Receives 39% tax credit over 7 years
- Receives substantial portion of principal back in 7 years
- ABC receives over $4 million in tax credits, $9.73 million of the investment returned, and interest income of $2.14 million
* This calculation assumes a 6.5% market rate with a below market rate of 4%. Numbers are rounded.
Bremerton: A Good Investment
Bremerton - the largest city in Kitsap County - is just 40 minutes from downtown Seattle via ferry.
Over $350 million in private and public projects are now underway there as part of an overall renewal plan. A recent economic analysis estimates 3,000 new jobs will be created as a result.
A growing high-tech company just moved its headquarters into a newly remodeled building, construction on Kitsap Credit Union's downtown headquarters, Anthony's Homeport Restaurant, and the Harborside Condominiums has begun along Bremerton's waterfront. An expanded marina, a Naval History Museum, and Maritime park are coming soon to Bremerton. A public housing project is currently being transformed into a 77 acre mixed-use development. And lastly, Pacific Avenue Plaza, our first New Markets Tax Credits recipient, is operating out of downtown Bremerton.
For More Information Contact:
Chuck Depew, Consultant, 206.419.3904
Email: Chuck Depew
© 2005 Kitsap County NMTC Facilitators I, LLC - all rights reserved