The Treasury Department said Wednesday that it has awarded units of JPMorgan Chase & Co. and Capital One Financial Corp., along with 30 other organizations, $1.5 billion of tax credits to invest in distressed communities.
The organizations include banking companies, nonprofits and real estate firms, the Treasury said. The Capital One Community Renewal Fund has been allocated a $90 million credit, and Chase New Markets Corp. has been allocated $85 million.
Other large awards went to ESIC New Markets Partners LP of Columbia, Md. ($95 million), Chicago's Urban Development Fund ($65 million) and Cleveland's AHC Community Development LLC ($55 million). "Many communities have been left with a shortfall of financial support and are unable to pursue desperately needed projects, leaving residents to fall even further behind," said Treasury Secretary Timothy Geithner.
The tax credits, which Geithner announced at a press conference in Boston, are part of the New Markets Tax Credit program, which received new resources through the economic stimulus package Congress passed this year. The goal is to help the private sector invest in energy, education, health care and manufacturing projects to enrich distressed neighborhoods. Individual and corporate taxpayers receive a credit against federal income taxes for making certain investments in low-income communities. The credit, worth 39% of the cost of the investment, is claimed over a seven-year period.
The Treasury said the awards ranged from $10 million to $95 million; the average size was $46.9 million.