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Case Study: New Market Tax Credits Humboldt Bay Harbor District

The Humboldt Bay Harbor District (the "District") engaged Weist Law to contribute to their team of consultants to work on the Humboldt Bay Offshore Wind and Heave Lift Marine Terminal project (the "Project"). Utilizing New Market Tax Credit ("NMTC") loan funds the District will be able to successfully power the District properties with a 750,000 kv solar system and the world's longest broadband fiber optic cable landing site with connections planned for Australia, Singapore, Taiwan, and Japan.

Humboldt Bay Harbor District

In 2015, the District acquired a former pulp mill and formed the non-profit, Humboldt Bay Development Association (the "Association"). The Association took out around $8.68 million in new market tax credit loan funds. Around $13.5 million was spent on cleaning up and preparing the property, and in August of 2022 that entire amount was forgiven.

Since the start of the Project, there is now a wide stream of multi-billion dollar companies looking to invest in Humboldt Bay and the county projects that the Redwood Marine Terminal properties will bring in approximately $ 1.6 million in annual property tax revenue to the County.

Case Highlights

- 750,000 kv solar system to power the District properties

- World's largest broadband fiber optic cable landing site with connections planned for Australia, Singapore, Taiwan, and Japan

- 660,000 sq. ft. of new indoor recirculating aquaculture permitted with over $500 million in projected investments

- agreements with Crowley Wind Services to construct the heaviest lift marine terminal on the west coast to support the offshore wind industry

- expected $1.6 million in annual property tax increase for the County

The NMTC Program

The NMTC Program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities ("CDEs"). All of the qualified investments must be used by the CDEs to provide investments in low-income communities. A total of 39% of the investment cost is the credit provided to the taxpaying investor, claimed over a seven-year credit allowance period. The NMTC program allows individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments. Funds can be used to finance equipment, operations, or real estate projects. Real-estate financing can purchase or rehabilitate retail, manufacturing, agriculture, community facilities (e.g., health services, museums, or charter schools), rental or for-sale housing, or combinations of these.

Using the capital from investors CDEs can make loans and investments to businesses (qualified active low-income businesses, can be for-profit or non-profit enterprises) operating in low-income communities on better rates and flexible terms/features than the market. Terms for NMTC loans can include lower interest rates, flexible provisions such as subordinate debt, lower origination fees, higher loan-to-values, lower debt coverage ratios, and longer maturities.

Businesses and the surrounding communities have significantly benefited from the NMTC Program. Businesses (and Non-Profits) benefit from access to flexible and affordable financing. The low-income communities benefit from the jobs associated with the investments in manufacturing, food, retail, housing, health, technology, energy, education, childcare, and more, as well as greater access to community facilities and commercial goods and services.

For every $1 invested by the federal government, the NMTC Program generates more than $8 of private investment. You can read more about the NMTC program on the Department of Treasury website or download the NMTC Program Fact Sheet below.

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If you would like to learn more about the strategies mentioned in this article or any other public financing matter, you can schedule a no-obligation zoom meeting directly on our scheduling calendar. We would love to learn more about how we can help you generate savings and create a healthy financial future for your agency.


The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact a designated Weist Law representative. This material may be considered advertising under certain rules of professional conduct.

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