Tuesday, February 25, 2014
The "$50 million op-ed": The big story of how a little law clinic helped bring New Markets Tax Credit financing to its state
Last week, Idaho Law was fortunate to have Dave Glaser, president of the Montana Community Development Corporation, come to speak to my Economic Development Clinic in Boise and also to address a group of local developers, city officials, and attorneys.
Glaser's visit was the culmination of almost three years of effort, originating with my Economic Development Clinic, to bring New Markets Tax Credit financing to Idaho. To my mind, it's a great story about what law school clinics can do aided by a lot of smarts and, I'll admit, a little serendipity. Here's the story...
About three years ago, I wrote an op-ed in the Idaho Statesman based upon work conducted by my Clinic for a client seeking investment strategies in a low income urban area. In the op-ed, I noted that most other states around Idaho, and especially Montana, were using New Markets Tax Credits to lower financing costs for projects in low income census tracts. Download Miller op-ed.
A lot of Idaho qualified for NMTCs, including all of downtown Boise. I urged Idaho's leaders to hop on the NMTC bandwagon. I did not receive a welcome response. In fact, an e-mail chain--later forwarded to me--sent to most of the Idaho Legislature stated that my op-ed was "misleading." The e-mail continued:
”An NMTC project is incredibly complex and expensive to put together and administer for the life of the financing. Since we have gone almost 12 years since the program began without a CDE requesting or receiving a direct NMTC allocation for economic development in Idaho, probably indicates that it has not been feasible to do so.”
About the same time as that "no go" e-mail was forwarded to me, Glaser gave me a call out of the blue. He'd read my op-ed and, yeah, it didn't make sense that Idaho wasn't doing NMTCs either. Several more calls occurred and a lot of hard work by the Montana CDC ensued. Today, the Montana CDC has moved into Idaho and is substantially assisting low income communities here with some amazing projects that would not have happened otherwise.
As Glaser recently joked in a radio interview, my little 500-word article turned out to be "a $50 million op-ed." In the last three years, the Montana CDC has used NMTC financing for two hospital/clinic expansions in Rexburg and Coeur D’Alene totaling nearly $27 million and created hundreds of construction and permanent jobs. The Montana CDC will also be closing an additional manufacturing project in the spring in East Idaho that will nearly double that amount (around $24 million) and create nearly 300 permanent jobs in a very rural community. From what I hear, other Idaho NMTC projects are in the works, too!
The experience has been a great vindication of the effects of what a little law school clinic out on the prairie (well, in the sage-brush desert, really) can do. One little idea has, certainly, gone a long way in this instance.
You can hear the radio interview with Glaser below (reference to the Clinic's participation in minutes 6:00 - 9:00). Below is also a YouTube presentation Glaser did later in his visit in Boise. The Montana CDC does tremendous work and, to my mind, deserves to be better known than it is. They are well worth a look for those seeking rural models for sustainable economic development.
Stephen R. Miller