County presents New Markets Tax Credit deal that would lower 10th East Senior Center cost by roughly $1.5 million

Staff (Greg, S2) presented a New Markets Tax Credit (NMTC) financing structure for the 10th East Senior Center in Salt Lake City and asked for the committee's informational review ahead of a council resolution that will seek approval in August. Under the proposed transaction, US Bank will serve as the equity investor, the county will make a loan into a compliance structure, and a community development entity (CDE) will help manage the credits and compliance obligations.

"This is a pretty standard and vanilla new market tax credit transaction," Greg said on the record, explaining that the structure lets the county realize roughly $1,500,000 in net equity from the investor, enabling an $8,000,000 project to proceed on about $6,500,000 of net county cost. Staff said the county has successfully unwound similar NMTC structures in the past and expects an option at year seven to transfer ownership back to the county once compliance obligations end.

Committee members noted the transaction has routinely been brought to the debt review committee as informational and that the committee could record no objection; staff said they will include the transaction for council consideration in August with supporting documentation.

Why it matters: NMTC structures can materially reduce up-front county capital costs for qualifying projects in low-income areas, but they also create compliance and long-term ownership considerations that the council and staff must document for voters and auditors.