$48 million in new markets tax credit investment gives Vancouver economic boost, largest allocation in Portland-Vancouver region

Tuesday, July 05, 2011
Contact: see below

Contacts:;

Alisa Pyszka, City of Vancouver, (360) 487-8617

Theresa Wagner, Port of Vancouver, (360) 992-1107

Michelle Morlan, National Development Council, (206) 624-0338

Farwest Steel Corporation closed on a $38 million New Markets Tax Credit (NMTC) transaction this week, helping to finance a $48 million regional steel fabrication and processing center within the Port of Vancouver. This is the first NMTC financed project in Clark County, the largest single allocation to date in the Portland-Vancouver region and is expected to create or retain 228 family-wage jobs. Construction of this project will commence the week of July 5, 2011.

The City of Vancouver, Port of Vancouver, and Farwest Steel entered into a collaborative contract with National Development Council in order to secure the financing and manage the complex project. This unique public-private approach dispersed risk that allowed Farwest Steel to pursue the uncertain allocation.

"These federal business tax credit allocations were significant in allowing this project to proceed," said Pat Eagen, Farwest Steel Corporation.

The Farwest project is seen as an important catalyst for further redevelopment of heavy industrial and light industrial property in Vancouver, helping to achieve the job creation and business expansion goals of the Port and the City. Both agencies have made significant Vancouver investments including the Port's $150 million West Vancouver Freight Access project and the City's $44 million Waterfront Access Project. These projects were made specifically to encourage development of the Vancouver area employment base.

"This is an exciting business enhancement for Vancouver and an excellent example of what we can accomplish through innovation and collaboration," said Eric Holmes, Vancouver City Manager. "Together with our local, regional and national partners, this project demonstrates a shared investment in our community by both public and private sectors. The City, the Port and our partners continue to find unique opportunities to encourage investment in our region," he said.

"Economic development tools such as the New Markets Tax Credits program are critical in times like these," said Port of Vancouver Executive Director Larry Paulson. "With Clark County's unemployment rate continuing to hover right around 13 percent, this program and the willingness of all parties to collaborate brought a major employer to the Port and more than 200 family-wage jobs to our community."

With National Development Council's (NDC) guidance and management, the Farwest project was able to attract three different Community Development Entities who contributed $38 million in New Market Tax Credits; entities consist of the National Community Fund, National New Markets Fund and Brownfields Revitalization. JPMorgan Chase was the investor who, through the purchase of these tax credits, provided capital to the project.

"National Development Council is pleased to support the City and Port's vision for significant job creation. We were happy to assist with the creative financing and the expansion of a major steel processing center is just the type of business development that New Markets is designed to support," said Michelle Morlan, NDC West Region Director.

An additional $10 million allocation of tax credits will be provided by Bank of America through its own Community Development Entity to facilitate the purchase of equipment for the facility.

The New Markets Tax Credit program is a Federal tax incentive established by Congress in 2000 to spur investments into operating businesses and real estate projects located in low-income communities.  By permitting individual and corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in low-income areas, projects can realize savings through favorable financing.

The Port of Vancouver site qualifies for the tax credit program under multiple criteria including a poverty rate above 30%, household median income below 60% of the area median, and an unemployment rate greater than one and one half times the national rate based on the 2004 updated census figures.