Indian Country Today
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Transaction a team effort
Originally printed at http://www.indiancountrytoday.com/business/72838752.html
KANSAS CITY, Mo. – Travois New Markets, an economic development consultant for American Indian
tribes, recently helped the Bois Forte Community Redevelopment Corporation secure New Markets Tax
Credit funding for its new, energy efficient Community and Government Services Facility, which is
currently under construction in Nett Lake, Minn.
Wells Fargo placed a $3.7 million New Markets Tax Credit investment in the project
combined with an additional $9.1 million in construction financing to build and manage the
48,852-square-foot Community and Government Services Facility, which will be home to
community meeting space, Bois Forte Tribal Government offices and a financial service
center such as a credit union or branch bank.
“We were pleased with the financial acumen and knowledge of Indian country that Travois
brought to this project,” said Bois Forte Tribal Chair Kevin Leecy. “Our focus is on
diversifying and strengthening our economy. Creative financing tools like New Market Tax
Credits are versatile tools for tribes to utilize.”
The need for a new building became even more urgent this spring when a fire destroyed a
tribal government building that had served as an anchor in the community since 1976. As a
consultant to BFCRC, Travois assisted the development team in closing the investment with
a leverage loan from the band and NMTC allocation and equity from Wells Fargo. This is
Wells Fargo’s third NMTC transaction involving a tribal entity; Wells Fargo provided the
first-ever NMTC financing to an American Indian tribe in May 2005.
“The NMTC program financing structure provided Bois Forte a source of long-term funding
to the project that is substantially cheaper and on more favorable terms that would be
conventionally available,” explained Lee Winslett of Wells Fargo’s Community Lending and
Investment group. “This creates a domino effect that allows Bois Forte to rent space at
below-market lease rates, and tenants increase their benefits to end users – members of the
Bois Forte Band of Chippewa.”
Though it acted as a consultant on this project, Travois New Markets is also a nationally
certified CDE, and it was recently awarded $80 million in New Markets Tax Credits to invest
in other Indian country economic development projects.
“We are proud of every aspect of this transaction,” said Phil Glynn, director of Travois New
Markets. “First, we are always interested in community facility projects and will be seeking to
use our own new allocation in similar projects on other reservations. Second, we are always
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excited to be involved in projects when the tribal government is the leverage lender. Bois
Forte has employed a financing strategy that should be a model for Indian country.”
Projected community impacts include 139 construction jobs created and 70 permanent jobs
retained. The groundbreaking was held in August, and construction is scheduled to be
complete in August 2010.
The NMTC program was created in December 2000 and is administered through the CDFI
Fund by the U.S. Department of the Treasury. The NMTC program serves as a catalyst to
encourage investment of private equity capital into low income communities and allows
taxpayers, such as Wells Fargo, to receive a credit against federal income taxes for making
equity investments in designated CDEs. The credit provided to the investor totals 39 percent
of the cost of the investment and is claimed over a seven-year credit allowance period. The
CDE provides a qualified equity investment under favorable terms, such as a below-market
interest rate and a longer-than-standard period of interest-only payments, to the qualified
active low income community business.
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