MaineBusiness.com

November 4, 2009
Contact: Ron Phillips, President, CEI, rlp@ceimaine.org, 882-7552 x114
Charlie Spies, Managing Director, CEI Capital Management LLC, cjs@ceimiane.org; 207-772-5356
Grace Cleaves, Director of Marketing and Communications, Coastal Enterprises Inc., gfc@ceimaine.org, 207-632-7693 cell

FOR IMMEDIATE RELEASE

Coastal Enterprises Inc’s New Markets Tax Credit Program receives highest allocation in U.S.

Wiscasset, ME. For the second year in a row, Coastal Enterprises Inc., has received the highest allocation under the federal New Markets Tax Credit Program of any recipient in the country. Through its subsidiary, CEI Capital Management LLC, it will use the allocation to attract private capital investments for primarily rural economic development projects. Of the 100 recipients of the latest round of New Markets Tax Credit allocations, Treasury Secretary Tim Geithner tapped CEI for $125 million, which will be deployed in Maine, New England and other U.S. locations over a 5-year period. This award brings CEI to $606 million in new markets allocation, of which approximately $334 million has already been placed, with over 70 percent of this amount placed in rural communities.
“Too often, communities are left behind by economic growth,” said Secretary Geithner in Chicago on Friday. “The Recovery Act and the New Markets Tax Credit program help break this vicious cycle to ensure the benefits of growth reaches all corners of the country.”
CCML was chosen for such a high level award based on its willingness to fund meaningful projects in highly distressed rural locations and for its proven ability to sustain its rate of successful project fundings, even in the face of a declining economy.
Ron Phillips, President of CEI and one of the original architects of the new markets program, is delighted with the news. “Our new markets subsidiary has funded significant projects in Grand Lake Stream Plantation, the Millinocket region, Presque Isle, and Portland, and is being recognized for its impact on jobs and the environment in our most rural regions.” Phillips noted that many of the real estate and business projects that benefit from NMTC financing create and sustain jobs, reduce energy costs and/or rely on renewable sources of energy. “This represents,” said Phillips, “the triple bottom line of economic impact, social gains in meaningful jobs, and care for the environment.”
Charlie Spies, Managing Director of CCML for the past three years and former CEO of the Finance Authority of Maine, says “the announcement validates CEI’s focus and the need for increased investment in the hardest hit low income areas of Maine, New England, and rural America. Maine people have not been forgotten, nor has the innovation and entrepreneurship of its business and environmental leaders.”
The average size of the tax allocation per project is $10,000,000 and, on average, leverages another $20,000,000 in investments through other debt and equity sources. The NMTC subsidy often results in a 1% to 3% reduction in interest rate to the borrower, and accounts for approximately 25% of the total project funding in the form of low-cost financing, through the sale of the tax credits.
Individual and corporate taxpayers are recruited to invest in NMTC projects, based on IRS tax breaks available on these investments. Maine projects will include manufacturing, retail, community, clean energy and other environmentally sustainable projects. Rural areas in Maine and the Northeast will be targeted for at least 66% of the CEI new markets investment dollars.
Background
The NMTC program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in investment vehicles known as Community Development Entities (CDEs). CDEs must apply to the Treasury’s Community Development Financial Institutions (CDFI) Fund, which administers the NMTC program, to compete for this allocation authority. The organizations receiving awards have identified principal service areas that will cover nearly every state in the country, and plan to invest in renewable energy projects, charter schools, health care facilities, manufacturing companies, and retail centers. In the U.S. to date, over $14 billion of private-sector capital has been invested through the NMTC Program into urban and rural communities throughout the country.
A complete list of the organizations selected and additional information on the NMTC Program can be found on the CDFI Fund’s web site at: http://www.cdfifund.gov/.
###