Travois New Markets recently helped the Pascua Yaqui Tribe secure New Markets Tax Credit (NMTC) financing for its new $7.8 million education center that broke ground in December 2011. Wells Fargo provided $2.4 million in New Markets Tax Credit equity for the project, which will help fund a nearly 40,000-square-foot two-story education center.
“Education is very important to our tribe. Being able to build an education center is exciting and long overdue,” said Francisco Valencia, tribal council secretary. “As a tribal council member, it’s important to look for ways to help grow and build our tribe. Because of NMTCs, we have been able to allocate our savings of over $2 million on this project toward other services or programs the tribe needs. With all of our success utilizing NMTCs, we hope to use them again in future projects.”
The tribe saw a great need for a state-of-the-art education center as it continued to see its students lag behind their counterparts in other ethnic groups in literacy and math but had been unable to begin building the center because of a financing gap that remained after grants and tribal funds were raised. With NMTC allocation and equity from Wells Fargo, the Pascua Yaqui Education Center will provide instruction for multiple generations, including secondary, General Education Development (GED) and adult continuing education students, who will flourish under one roof and receive culturally appropriate education. Highlights of the center include an extensive Library and Resource Center, the technology-based education program called Tech Ania (Yaqui word meaning “world”) and a cultural preservation center. The education center will also host community engagements.
“Wells Fargo is proud to be part of the Pascua Yaqui Education Center which will undoubtedly deliver positive community impacts to this Native American community,” said Tracy Ericson of Wells Fargo Community, Lending and Investment.
Travois New Markets connected the tribe to Wells Fargo’s allocation and facilitated the closing of the NMTC transaction, and Travois Environmental Services conducted the required Phase I Environmental Site Assessment and an American Land Title Association (ALTA) survey to help the project get under construction.
“The Pascua Yaqui Education Center creates jobs and is a great example of why the New Markets Tax Credit program should be extended,” said Phil Glynn, Travois vice president of economic development. “New construction and permanent jobs will result from the development and opening from the center. Perhaps more importantly, the educational opportunities the center provides will help generations of Tribal members fill and create the new jobs of the 21st century.”
The project is expected to create 40 construction jobs and retain 60 permanent jobs. It will open and begin serving tribal members in early 2013.
About the NMTC program
The NMTC program was created in December 2000 and is administered through the Community Development Financial Institutions Fund (CDFI Fund) by the U.S. Department of the Treasury. The NMTC program serves as a catalyst to encourage investment of private equity capital into low income communities and allows taxpayers, such as Wells Fargo, to receive a credit against federal income taxes for making equity investments in designated CDEs. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period. The CDE provides a qualified equity investment under favorable terms, such as a below-market interest rate and a longer-than-standard period of interest-only payments, to the qualified active low income community business.
For more information about the 12th Annual Travois Indian Country Tax Credit Conference, to be held Sept. 10-13 at the Casino Del Sol in Tucson, Ariz., click here.