TITLE
Recommendation to adopt resolution authorizing formation of the Long Beach Development Fund, a California non-profit corporation, for purposes of applying for certification as a Community Development Entity in order to apply for allocation of federal New Markets Tax Credits. (Citywide)
DISCUSSION
The New Markets Tax Credits (NMTC) is a program of the U.S. Department of the
Treasury with the purpose of stimulating investments in businesses and commercial real
estate development in qualifying low-income areas. The NMTC encourages investment
by offering individuals and corporations tax credits that totat 39 percent of investments
for projects in qualifying census tracts. To qualify, census tracts must have a poverty
rate greater than 20 percent, or a median income less than 80 percent of either the
metropolitan area or statewide median family income, whichever is higher. Fifty-nine of
the I 1 0 census tracts in Long Beach qualify. These census tracts are identified in a
map attached as Attachment A.
The Community Development Department has reviewed the NMTC program and has
determined that it would enhance results of other City community and economic
development efforts, including the Community Development Block Grant program
(CDBG), business assistance programs and redevelopment activities.
The NMTC program is competitive and requires, as a first step, an application for
Community Development Entity (CDE) certification. CDE certification is determined by
the U.S. Department of the Treasury. Thereafter, a second application is necessary for
allocation of the tax credits themselves. If an allocation of tax credits is approved, the
City's CDE would be in a position to assist in attracting development to the City's low-
income census tracts by offering the NMTC.
The Long Beach Development Fund (Fund) will serve as the City's CDE. Its primary
mission will be to provide services to low-income communities in the City of Long
Beach. The Articles of Incorporation are attached as Exhibit A to the Resolution and the
Bylaws as Exhibit B to the Resolution. Examples of activities of the Fund would include:
Investing in, lending to, or providing technical assistance to businesses located in
low-income communities;
Investing in or providing loans to support commercial development located in
low-income communities; or . Investing in, lending to, or providing technical assistance to organizations
engaged in activities that promote community development in low-income
communities or for the benefit of low-income persons.
The Fund will be managed by a seven-person Board of Directors, to be appointed by
the Mayor with the consent of the City Council. The officers of the Fund will be a
President (the Director of Community Development), a Vice President and Secretary
(the designees of the President), a Chief Financial Officer (the Director of Financial
Management), an Assistant Treasurer (the City Auditor), and a General Counsel (the
City Attorney of the City of Long Beach).
TIMING CONSIDERATIONS
[Timing Considerations]
FISCAL IMPACT
[Fiscal Impact]
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
[Respectfully Submitted,]