The president and chief executive officer of the East Baton Rouge Redevelopment Authority said the agency’s recent failure to secure federal new markets tax credits for the second straight year is a disappointment that reinforces the RDA’s need to find a permanent source of funding.
“We’re severely disappointed obviously,” said Walter Monsour after addressing the Rotary Club on Wednesday. “We thought we had written a great application and had some great projects.”
Monsour said the RDA plans to go over its application with the U.S. Treasury Department, which allocates the credits, to get some feedback on how the RDA could do better in later rounds.
The federal credits are granted to public and private entities that use them to provide key funding for qualifying development projects in low-income areas. The revenue ultimately comes from the sale of the credits to businesses and individuals who use them to offset some or all of the taxes they owe.
The RDA distributed all of the $60 million in credits it got in 2009, helping to fund senior apartments, two YMCAs, a center to treat autism and other communication disorders, and a downtown hotel. But it failed to get any allocations last year and again this year when they were announced last week.
Monsour said the unnamed projects that were part of its application should still get a chance to use new markets tax credits, even if it’s not through the RDA.
“Several of our projects should be of interest to other (community development entities) across the country and we’ve already reached out to several of them to see if they have any interest in using some of their allocation for these projects here,” he said.
The RDA was funded initially by money from the East Baton Rouge Mortgage Finance Authority and other sources. It is running on fees generated by that first round of credits, which Monsour said will be sufficient for another couple of years.
But Monsour said that regardless of whether the RDA got any new markets tax credits last week — or gets any in subsequent rounds — permanent, dedicated funding will have to be found.
“The fees are not enough to sustain us long-term,” he said. “Permanent funding is going to have to be permanent funding. It is going to have to be a reliable income stream that ensures us that we can grow.”
He said the redevelopment authorities that the RDA has modeled itself after have dedicated revenue streams they can leverage to fund growth and new projects.
Monsour said he has no new details on what form that funding will take. He once again said he’s averse to any new taxes, though he said being part of a larger bond issue with specific projects identified could be possible. He said diverting existing tax revenue is also a possibility, though he would leave it up to Mayor-President Kip Holden and the council to identify those sources.
Monsour said he continues to give presentations like the one he gave at Rotary and work behind the scenes to convince Metro Council members and city officials that the work the RDA does is worthy of permanent funding.