[StBernard] Parish seeks tax credits to boost recovery

[Westley Annis]

Parish seeks tax credits to boost recovery
St. Bernard hires firm to handle application 
Tuesday, January 02, 2007
By Karen Turni Bazile
St. Bernard/Plaquemines bureau 

Hoping a federal tax incentive program might jump-start economic development
and the rehabilitation of flood-damaged areas, St. Bernard Parish officials
are taking steps to apply for as much as $150 million in tax credits that
could be used to spur construction. 

 
Parish Councilman Craig Taffaro, who is chairman of the parish's Housing,
Redevelopment and Quality of Life Commission, said the credits from a
Treasury Department program called the New Market Tax Credit Program, could
offset initial repair or construction costs for businesses or service
agencies that want to move or repair their structures in most parts of St.
Bernard Parish. 

Already, parish officials and a private developer say the tax credits might
be a factor in two upcoming projects: a new hospital and redevelopment of
the blighted Village Square area in Chalmette. 

The Housing, Redevelopment and Quality of Life Commission recently signed a
contract with CBO Financial Inc. CBO's president, Craig W. Stanley of
Maryland, has experience with the relatively new tax credit program and will
help the parish apply for the program. Stanley will be paid only if the
parish is awarded an allocation of tax credits under the program, Taffaro
said. 

At Stanley's suggestion, the commission is drawing up a simple legal
document to create an entity that ultimately will administer the incentive
program if the parish is awarded a tax credit allocation. Stanley's role is
to write the application for the parish to get the authorization to
administer as much as $150 million of $3.9 billion in tax credits that
Congress approved to help areas affected by Hurricanes Katrina and Rita. 

The program encourages investment by providing tax credits over a number of
years. The tax credits could also be used to start a loan fund in distressed
communities, Stanley said. 

Councilman Lynn Dean was the lone commission member to oppose contracting
with Stanley's company. Dean said he worries about government playing too
large a role in free enterprise. Besides, Dean said, the parish should write
the grant application itself so it wouldn't have to pay Stanley 2 percent
from the allocation's proceeds. 

However, Taffaro said the grant application is highly specialized and that
Stanley is one of a limited number of people already approved by the
Treasury Department for the program. 

Stanley said the program is "an extra federal incentive to subsidize
projects in distressed communities by providing flexible financing or
equity." 

Stanley told the group the program is meant to target low-income areas,
adding that much of St. Bernard Parish would meet the criteria because it is
based on the median incomes in individual census tracts. 

Using part of an allocation of $80 million in new market tax credits already
at his disposal, Stanley is working to buy most of the multiple-family
properties in Village Square. Stanley has offered property owners $15 a
square foot for their lots whether or not there were buildings on them. 

Stanley's ultimate $100 million redevelopment plan for Village Square would
reduce the number of housing units from about 700 to around 350. The
mixed-income development would include some social service buildings, such
as a community medical center. 

Stanley said his initial efforts will focus on a small portion of Village
Square. He is discussing options with the nonprofit group currently
operating the St. Bernard Health Center in the parking lot of the Wal-Mart
Supercenter. That health center is seeking a permanent location elsewhere in
the parish. 

Once he completes the property acquisitions, Stanley said, he will ask the
parish for zoning changes so he can begin building a planned community that
hopefully will include the health center, as well as special-needs housing
for the elderly and disabled and market-rate housing for the general public.


Officials have lauded that effort, which is not costing the parish anything,
as a way to fix an area that has faced chronic blight. 

Councilman Mark Madary, a member of the commission, disputed Dean's
criticism that such government programs hurt free enterprise. 

"It is a long-standing practice (by government) to give tax credits to
seduce people to invest in certain areas, to help rebuild areas," Madary
said. "In this case, the tax code is doing one of its primary purposes, to
stimulate investment." 

. . . . . . . 

Karen Turni Bazile can be reached at kturni at timespicayune.com or (504)
826-3321.