The Danville Community Development Entity has received $30 million in federal tax credits. It’s the third time the CDE has gotten money from the New Market Federal Tax Credits program.
And this year, Danville is the only locality in Southwest or Southside Virginia getting the award.
Out of 199 applicants, 107 localities around the country received money from the tax credit program, which was created in 2000 by the U.S. Department of the Treasury’s Community Development Financial Institutions fund.
The New Market Federal Tax Credits program exists to help economically distressed communities attract private investment capital. It allows investors to make larger investments than would otherwise be possible to fill funding gaps.
Arlington and Norfolk were the only other two Virginia localities to receive federal tax credit for this program.
And the recipients there, Capital Impact Partners and Hampton Roads Ventures, LLC, respectively, will focus investment activities on a national service area.
The Danville CDE, on the other hand, will focus investment activities in a local service area.
“The tax credits will be used to attract private investment capital for real estate and business projects that produce jobs and leverage private investment,” according to a release from the City of Danville.
The Danville CDE serves an area beyond the city itself, also including Henry, Halifax, Patrick, and Pittsylvania counties, and the City of Martinsville.
“The purpose of the Danville CDE is to diversify Southern Virginia’s economy by lending to entities that create quality jobs,” said Corrie Bobe, Danville’s director of economic development, in the release.
The city is accepting applications for potential projects using these funds, the release said.
The Danville CDE has been a recipient of this award twice before, and previous allocations were used to fund the River District Tower and Litehouse Food projects.
The River District Tower project renovated the Dan River Research Building, which sat vacant for years after Danville’s longtime textile giant, Dan River Mills, left town in 2006.
This project used the $20 million in New Market Federal Tax Credits funding, and an additional $5 million to create a mixed-use medical office facility. It was completed in 2016 and created 351 direct jobs.
The Litehouse Foods project was an expansion of a salad dressing manufacturer in Danville, adding new equipment to increase production and number of jobs. It used the $35 million from the New Market Federal Tax Credits funding, and the total project cost was $36.6 million.
This was completed in 2020 and created 182 full-time equivalent jobs.
Together, these two projects have supported 533 direct jobs, 48,900 low-income residents through community services and 274,000 square feet of real estate, according to a document City of Danville sent to Cardinal.
Overall, this year’s New Market Federal Tax Credits awards totaled $14.7 billion across 107 localities in 35 states and Washington, D.C.
Over 20% of the investments made were in rural communities, and about $1 billion of the investment proceeds will likely be used to finance real estate projects in low-income communities.
“Danville is fortunate to have a community development entity that is able to invest in transformational projects in our region that would otherwise not be financially feasible,” said Ken Larking, Danville’s city manager, who serves on the CDE board, in the release.