New Markets Tax Credits Could Attract Private Financing
JERSEY CITY, N.J., May 24, 2011 /PRNewswire-USNewswire/ -- Top officials of the $4 billion AFL-CIO Housing Investment Trust (HIT) and its subsidiary, Building America CDE, Inc., met today with Jersey City Mayor Jerramiah Healy to discuss whether their union pension capital could help finance the McGinley Square Community Redevelopment project. The 2.2 million square foot development will include 400 units of market rate and workforce housing, three parking structures, office and retail space, a hotel and a community center.
HIT CEO Stephen Coyle, and Eric W. Price, Executive Vice President of the HIT and CEO of Building America, who met with Mayor Healy and other city officials, are considering an investment in the early stage of project to help kick off the $500 million planned redevelopment of downtown Jersey City. Deputy Mayor Kabili Tayari, Bob Antonicello, Executive Director of the Redevelopment Agency, and St. Peter's College President Dr. Eugene J. Cornacchia also attended today's meeting.
The neighborhood, which surrounds St. Peter's College, has a number of large-scale development projects planned, including a community center, affordable housing, and retail space. The redevelopment project will complement the U.S. Department of Housing and Urban Development's efforts to revitalize the McGinley Square public housing development as part of its Choice Neighborhoods program. The HIT and Building America are both reviewing projects in the community for investment in 2011.
"This neighborhood has a rich history, and its residents deserve to see that vibrant community restored and revitalized," said Mr. Coyle. "The HIT has considerable experience in financing redevelopment projects for communities like this, and we would be pleased to find an opportunity to assist in the renewal of this important area of Jersey City. We are looking at projects that will create family-supporting union construction jobs at a time when so many people are still out of work."
The proposed investment will be the most recent in the HIT's long and successful history of helping Jersey City meet its redevelopment needs through the investment of union pension capital. Since 1995, the HIT has provided more than $300 million in financing for 6 projects in Jersey City – projects that created 2,116 units of housing and generated nearly 2,200 union construction jobs. These projects represented more than $350 million of development activity. Throughout the state of New Jersey, the HIT has committed more than $760 million since its inception to finance 30 projects with total development value of $897 million, helping to build or preserve 5,459 housing units and creating an estimated 5,500 union construction jobs. The HIT has also been a principal investor in the redevelopment of the New Jersey Waterfront, financing the development of 13 projects totaling more than $734 million of development and creating over 3,600 units of housing.
John J. Sweeney, Chairman of the HIT and President Emeritus of the AFL-CIO, calls the HIT "a national leader in using union pension capital to help communities meet their development needs." In the past year, at a time when development capital remained scarce, the HIT committed over $600 million to help finance 21 projects in 11 cities, representing over $1.3 billion of total development.
The HIT's subsidiary, Building America CDE, was recently awarded $35 million of tax credits under the federal New Markets Tax Credit program. The tax credits are designed to attract private capital for redevelopment projects in underserved areas to make those projects financially viable.
"We are actively seeking out innovative projects in that could benefit from New Markets Tax Credits to bring jobs, housing and new economic vitality to depressed communities," Mr. Price said.
About the HIT
The AFL-CIO Housing Investment Trust is a fixed-income investment company registered with the Securities and Exchange Commission. It manages nearly $4 billion in assets for approximately 350 investors, which include union and public employee pension plans. The HIT invests primarily in government and agency insured and guaranteed multifamily and single family mortgage-backed securities. The HIT is one of the earliest and most successful practitioners of socially responsible, economically targeted investing, with a 45-year track record that demonstrates the added value derived from union-friendly investments. The investment objective of the HIT is to provide competitive returns for its investors and to promote the collateral objectives of constructing affordable housing and generating employment for union members in the construction trades and related industries. Since its inception, the HIT has invested $6 billion to finance 98,000 units of housing nationwide, generating more than 68,000 union construction jobs.
Michael K. Frisby
SOURCE AFL-CIO Housing Investment Trust