Detroit M-1 Rail Project Lines up More Funding

The Detroit M-1 streetcar project has agreements for the second phase of funding.

The project will receive approximately $40 million total in New Markets Tax Credit financing.”

M-1 Rail said in a news release that the latest funding agreement brings its net funding to $8 million.  “The deal marks the first time that NMTCs have been used to fund a public transportation initiative,” M-1 Rail said.

“We have received unprecedented support from our partners, donors and the community,” said M-1 Rail CFO Jenilyn Norman. “This project is the standard for what NMTCs are meant to support, providing a catalyst for growth, inclusion and access for community residents who need good jobs and dependable public transportation.”

The NMTC program was established as part of the Community Renewal Tax Relief Act of 2000 to stimulate investment and economic growth in low-income urban neighbourhoods.

Financial institutions that comprise the partnership of investors for M-1 Rail’s NMTC include JPMorgan Chase, Invest Detroit, The Great Lakes Capital Fund, Local Initiatives Support Corporation, and United Fund Advisors.

A NMTC investor receives a tax credit equal to 39 percent of its total qualified investment in any community development entity, with the credit realized over a seven-year period – 5 percent annually for the first three years, and 6 percent thereafter.

Norman said the NMTC is a critical piece of the 2014 funding, which also includes investment from private foundations, corporations, donors, and the Federal Transit Administration through the Transportation Investment Generating Economic Recovery program.

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