City council considers tax credit financial program on local project
HATTIESBURG, Miss. - Hattiesburg City Council is considering a financing program using tax credits to fund construction for the Public Safety Complex project.
Originally council presumed the Public Safety Complex project would cost $28 million, but found out in May it can cost up to $38 million.
In May the council voted to cap the project at $32 million, but it is still considered too costly and the financing program will help cover the cost.
The council's lawyer, Kim Smith, with Butler Snow Law Firm in New Orleans, Louisiana said, "Basically its a program enacted by the Federal Government that allows an allocation for tax credits, to a group called Community Development Entities, or CDE's."
The CDE's give these awarded tax credits, and will allocate them to certain projects located in low-incoming qualified areas. The new plans for the complex does take place in a pre-qualified location in a qualified area.
Smith said, "Any kind of commercial business, grocery store, community center, YMCA, anything that essentially is located in one of these areas."
She added, "And also has with it, hiring of new local people, you know lots of jobs, or other community benefits where it brings the community together."
The city can potentially raise up to $7.5 million, which will bring down the cost and would help fill the current gap in financing for the project.
"When they are allocated to the CDE, and sold to the investors, investors pay a purchase price for them" said Smith. Smith said it acts as a loan to the project, that does not have to paid back.
If council moves forward with the financial project, they need to identify one or more CDE's that is willing to provide credits to urban development projects.