Collaboration brings $30 Million in New Markets Tax Credits to Memphis

News Release
Nov 10, 2009

Memphis Bioworks Foundation and the City of Memphis today announced they have received an allocation of $30 million in New Markets Tax Credits in the latest round. In the joint application with the City of Memphis, Memphis Bioworks received the credits to be deployed on projects in the Memphis area to stimulate private investment in designated low income census tracts.

In Memphis Bioworks Foundation's application to the Community Development Financial Institutions (CDFI) Fund, the UT-Baptist Research Park site, including the former hotel tower site on Madison and the planned research buildings were identified as tracts for the investment. The Pyramid project was also identified in the approved New Markets Tax Credits application. This is the largest tax credit award ever received through this program by a Tennessee-based institution.
As described on the CDFI Fund Web site from the United States Department of the Treasury, The New Markets Tax Credit Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs). Substantially all of the qualified equity investment must in turn be used by the CDE to provide investments in low-income communities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period.

For the Memphis award, a for-profit subsidiary of Memphis Bioworks Foundation is the CDE and will work with the City to jointly make decisions on how to deploy the $30 million in Tax Credits to stimulate investment that leads to new business opportunities and jobs in the medical district and downtown Memphis.

"Receiving these Tax Credits is a tremendous addition to our arsenal of tools available to encourage investment in our community," said Robert Lipscomb, Director Housing & Community Development for the City of Memphis. "We will be able to help investors who are willing to create the programs and businesses that will generate jobs and long-term financial momentum for Memphis. And, with the Memphis Bioworks Foundation's knowledge and experience in helping build businesses through an integrated focus on infrastructure, education and entrepreneurship, we have a partner that clearly understands how viable businesses are built and jobs created."

In a news release issued by the CDFI Fund, Donna J. Gambrell, Director of Treasury's CDFI Fund stated, "The New Markets Tax Credit Program is promoting private-sector investment in our nation's communities and is helping to stimulate economic growth, create jobs and bringing new opportunities to Americans most in need. This innovative federal program is helping to finance numerous businesses and real estate projects across the country - projects that may not have been financed if not for New Markets Tax Credits."

The next step for Memphis Bioworks and the City of Memphis is to enter into a contract with the Department of Treasury, a process that can take several months.

Business development led by the Memphis Bioworks Foundation is supported as a key initiative of the Memphis Fast Forward and MemphisED programs.

Memphis Bioworks Foundation
The Memphis Bioworks Foundation is a not-for-profit organization, formed to lead the collaboration between public, private, academic and government entities to accelerate the growth of the bioscience industry in the region. Memphis Bioworks strives to leverage and expand the regional strengths in the biosciences through education, research, job training, and commercialization. Memphis Bioworks is leading the development of the UT-Baptist Research Park, which serves as the focal point of the city's biomedical economic development. For more information, visit www.memphisbioworks.org.


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