SNEDA submits application for New Markets Tax Credits

SNEDA has made the first step toward getting tax credits to help SNEDA neighborhoods.

SNEDA submitted an electronic application for $16 million worth of New Markets Tax Credits to the U.S. Treasury Department on September 28th. The tax credits are designed to enhance business investment in low-income neighborhoods.

If SNEDA is granted the tax credits, it plans to use $14 million of them for three commercial real estate projects in SNEDA neighborhoods and $2 million of the tax credits to create a loan and near-equity fund focused on businesses in the SNEDA neighborhoods.

Getting the tax credits won't be easy because competition is stiff and SNEDA is such a new organization, SNEDA Consultant Patty Grossman told the SNEDA board during its September meeting. However, she believes it has a shot at winning some tax credits, in part, because SNEDA has a strong board and because of the huge need for development in Spokane.

Grossman added that even if the application does not attract the tax credits this time around, the application will help get SNEDA's name out to the economic development community.

SNEDA would like to thank CPC Development Company, Tom Power and Rob Daugherty for contributing $4,500 toward Grossman's fee. Thanks also to our internal tax credits team of Chris Venne, Al French, Rob Daugherty and Nick Landis, SNEDA board members Greg Lipsker and Rich Hadley, and consultants Patty Grossman and Sandy Gill.

Here are some recent articles in The Spokesman-Review about our application:

"Fee needed now for top grant writer," Tuesday, July 29, 2003.
"Grant consultant says case for tax credits compelling." Thursday, August 21, 2003.
"Anxiety surrounds grant hopes," Thursday, October 2, 2003

Financial Contributions to SNEDA

Our thanks to US Bank for their commitment to business growth in Spokane’s low-income areas. Over time their operating support for SNEDA will strengthen our local economy. Phone Eric Loewe at 444-7633 for information on supporting SNEDA’s work.
 
Loan Funds

Phone Nick Landis or Eric Loewe at 444-7633 for information on SNEDA’s loan capabilities.
 
Expand Your Business Through Government Contracts

On September 17th, Johan Curtiss from the Procurement Technical Assistance Center in the TriCities visited six businesses in the SNEDA service area. Companies included manufacturers, engineers, contractors, and service providers. Curtiss discussed ways to increase access to federal and state agencies and procurement officers, as well as some pending projects of interest.  SNEDA will continue to coordinate these visits, and her next visit should be later in October. Phone Nick Landis at 444-7633 for scheduling information. 

Business Assistance

Phone Susan Devan, Angie Huang or Jonathan Brunt at 444-7633 for information on assistance available to businesses in the SNEDA neighborhoods.  Examples of assistance provided by SNEDA include (1) working with businesses to define the needs of each business and identifying the appropriate local agencies to provide direct assistance and (2) creating and implementing an accounts receivable collection plan for a neighborhood business with national sales.  

Patty Grossman is so passionate about community finance that she was willing to watch her salary dwindle from six figures to $19,000 in just a few years.
 
Grossman, a community finance consultant, who has worked closely with SNEDA, left her position as the finance director at CBS television in New York in 1988 and moved to Seattle. There, she worked at Rainier Bank and volunteered with Cascadia Revolving Fund. Three years later she went to work full time at Cascadia as its executive director.
 
"I want to use my financial skills to help neighborhoods," Grossman explained.
 
Cascadia, which incorporated in 1985, provides loans and other support to businesses and organizations in the Northwest that have been unable to gain traditional financing or assistance.
 
In her six years leading Cascadia, she helped pull the organization out of the red and into financial stability. In 1997, President Clinton awarded Cascadia the first Presidential Award for Excellence in Microenterprise Lending.
 
Grossman has since formed a consulting business out of Seattle that works with organizations like Cascadia. Grossman has assisted SNEDA in fundraising and loan fund issues. She also was SNEDA’s consultant for its recent 100-page application for New Markets Tax Credits.
 
Meanwhile, Cascadia has continued its mission. During its history, Cascadia has made more than 375 loans totaling $24 million to a wide range of businesses including childcare, nail salons, construction firms and even a mobile knife-sharpening business.
 
Although the organization often loans to what are considered high-risk borrowers, Cascadia’s Web site touts a loan loss rate of just 1 percent.
 
As she told "Faith, Hope and Capital," a PBS documentary about community finance, Grossman believes community development financial institutions like Cascadia and SNEDA are giving lower income areas a unique instrument to empower people.
 
"I really think that CDFIs are the key to opening up tremendous opportunity to a lot of people who are left out of the economic mainstream. It's such a hackneyed phrase, but I really think that's exactly what we're doing," Grossman said for the PBS show, which aired in 2000. "I think the goal of CDFIs is to provide that initial foothold that somebody can climb a mountain from - enough money to make your idea fly."
 
 
(Note: Grossman’s full interview with PBS is available at
www.pbs.org/capital/stories/patty-grossman.html)