Published: November 19, 2009 11:18 pm      

Jeffersonville misses out on federal tax credits

‘Will not stop progress,’ official says

A federal tax credit that city of Jeffersonville officials had hope to use as an impetus for several major downtown projects will not be received.

Members of Jeffersonville’s Redevelopment Commission recently learned that, at least for now, the city would not be receiving the new markets tax credits for which it had applied.

Administered by the U.S. Treasury Department, the New Markets Tax Credit Program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated areas.

The $25 million in credits that Jeffersonville applied for was not among the about $5 billion approved by the U.S. Treasury at the end of October.

New Markets Tax Credits are used to help encourage private investment in targeted areas, according to a city press release. Jeffersonville’s application sought tax credits to foster downtown development, including funding for a downtown convention center.

“This will not make or break any downtown development,” said Planning and Zoning Director Jim Urban, who is serving as interim redevelopment director, in the release. “It would have been a nice tool to have, but it will not stop progress.”

Nationally, $22.5 billion in projects were proposed for the $5 billion in credits that were allocated, meaning only 22 percent were approved.

“Once word got out that we hoped to build a hotel and convention center, private sectors investors contacted us regarding involvement in the project,” Mayor Tom Galligan said in the release. “I do not believe any of them will walk away from the table as a result of our not getting the New Market Tax Credits.

“All that this means is that one carrot to encourage private-sector investment is not in the mix.”

City leaders hope to construct a 125,000-square-foot convention center and adjoining 225-room hotel in the city’s downtown. The project is expected to cost about $100 million and would require a partnership between city government and one or more private investors.

Rick Lovan, the city’s growth coordinator, said officials are still working on the convention center proposal, most recently looking at possible facades of the building.

Lovan also noted that the credit could have been used to aid development along a proposed downtown canal. The canal is being proposed not only as a means of economic development, but also to relieve stormwater drainage problems.

The city of New Albany also was among those in Indiana which were unsuccessful in efforts to land the credits in this funding round.

They’re applied for annually and the release indicates that leaders plan to try again next year.



BY THE NUMBERS

• $22.5 billion in projects were proposed to receive federal New Market Tax Credits

• $25 million in credits were applied for by the city of Jeffersonville, although none were granted

• $5 billion in credits were allocated nationally

— City of Jeffersonville