$7.5 Million Commercial Building Project Continues Revitalization of Helena’s Historic Last Chance Gulch Area

New major building project on Helena’s Pioneer Block gets underway through local business partnership and federal tax credit financing from Montana Community Development Corporation http://www.mtcdc.org .

Helena’s historic downtown neighborhood will soon have a new four-story building to add to its growing list of revitalization projects. The 30,694 square foot building will house new offices for the Browning, Kaleczyc, Berry, and Hoven, P.C. law firm (BKBH) and will provide additional commercial lease space.

The new building site at 800 Last Chance Gulch sits in Helena’s "Gateway Neighborhood" which has been designated as a key component of Helena’s downtown revitalization efforts. Over the past five years, the area has seen five new buildings, one building renovation, and one parking structure added to the Gateway Neighborhood.

The project came together with $7.5 million of New Markets Tax Credit financing from the Montana Community Development Corporation (MCDC) in partnership with Pioneer Block, LLC, (the project owner consisting of BKBH partners), Valley Bank of Helena and two of Valley Bank’s affiliate banks. The new building is styled to fit with historic downtown Helena, but with a contemporary flair and is expected to achieve LEED certification. CTA architects

designed the building. Dick Anderson Construction is the general contractor. The construction is expected to create 30 temporary jobs. Construction on the new building is expected to be completed by May of 2012. Kim Beatty, BKBH and Pioneer Block Partner, is excited to see the project take place. "We are very excited about this project. The Pioneer Block partners are delighted to have had the opportunity to put together a project that allows a long-time Helena business, the law firm of Browning, Kaleczyc, Berry & Hoven, to remain in the downtown area. This new building not only provides for the future growth of the law firm, but is a catalyst for continued growth and development of Helena’s downtown.

Without the New Markets program, this project would not have been possible," says Beatty. This is Helena’s second New Markets Tax Credit project, the only Montana city to have more than one New Markets Tax Credit project. The other Helena tax credit project is the Capital City Health building project located on Helena Avenue in the old Smith Grocery building. Valley Bank of Helena was involved in both projects. "Valley Bank is pleased to partner with other Helena businesses, MCDC and our affiliate banks to help create these important community assets and new jobs" said Ross Duncan, Executive Vice President, Valley Bank of Helena.

The BKBH building is a key project in further stimulating growth in the Business Improvement District by utilizing one of the vacant lots on the south side of downtown along Last Chance Gulch. Dave Glaser, President of MCDC, recognizes the importance of continuing the revitalization momentum in downtown Helena. "With financing tools like the New Markets Tax Credit program and great local bank partners like Valley Bank of Helena, MCDC can help local businesses make a real impact in their communities. MCDC is pleased to use this financing tool for Helena’s historic downtown." Economic modeling shows an estimated $12.3 million of economic activity will stem from the construction phase through ten years of operations when direct, indirect and induced activity is included. Wages created from the project account for $4 million of that total. The ability of this project to stimulate additional economic activity in the area made it eligible for the tax credits. The New Markets Tax Credit program is a federal tax credit tool that provides incentives for private investment in projects that help revitalize

low-income areas. Prior to 2008, the program had been used primarily in larger urban areas. Due to changes in the program, spearheaded by U.S. Senator Max Baucus in 2007, a portion of the tax credits were required to be invested in rural states. "We need jobs now more than ever. This project will help provide dozens of folks with work in the short term while enhancing economic development opportunities for the future in the Last Chance Gulch Area," said Baucus, Chairman of the powerful Senate Finance Committee. "From the beginning, I knew Montana communities deserved a shot at the New Market Tax Credits program. I’m so pleased to see folks working together to use this program to create good-paying jobs, enhance our communities and revitalize an historic part of Helena."

The tax credits are sold to investors for development projects that drive community impacts including job creation, urban revitalization, green buildings and affordable office and retail space. The federal tax credit proceeds bring down the total financing costs, which makes projects and developments more feasible.

Each New Markets Tax Credit project requires the participation of equity investors for the project. For this project, Valley Bank was joined by First Bank of Wyoming and First Bank of Montana, both of which were equity investors. U.S. Senator Jon Tester, who has sponsored Senate legislation to extend and expand the New Markets Tax Credits (S. 996), said today’s announcement is a win for Montana. "Smart investment that creates jobs and lays the groundwork for positive growth strengthens Montana’s economy," Tester said. "The Montana Community Development Corporation has a proven record of successfully investing in valuable and ambitious projects like this one, which will give a big boost to historic downtown Helena."

About New Markets Tax Credit

The New Markets Tax Credit program is a tool for job-creation and economic revitalization in areas that struggle to attract investment because of poverty, unemployment and a lack of opportunity. The tax credits can be used towards a variety of community revitalization efforts in designated low- income areas. Financing can be applied toward construction costs, working capital, machinery and equipment, fixed assets and certain development of commercial, industrial and mixed commercial and housing real estate.

The NMTC program works by allowing equity investors in local business development projects to receive credits against federal income taxes for their investments into qualified community development projects. Entities such as MCDC help organize and manage the financing aspects of the project by matching the equity investors with local banks to provide additional project funds. While investors receive a 39% tax credit on their funds, realized over seven years, the overall impact to the financing package is that the project is infused with investment capital that would not be in play without the tax credits.

The tax credits are attractive to investors looking for new business opportunities with enhanced returns and are attractive to debt providers, such as local banks, which earn traditional returns while broadening their market. The end result for communities is infusion of capital for worthwhile projects that create economic opportunities for people and places that need it most.

About Montana Community Development Corporation:
MCDC works with business owners, local development agencies, and banks throughout Montana. MCDC’s mission is to provide business financing that can transform the lives of individuals and strengthen community prosperity. Since 1989, MCDC has served thousands of entrepreneurs with loans, consulting, and training. MCDC has lent more than $25 million to over 400 businesses, and has now funded $47.5 million in New Markets Tax Credit projects in low-income areas of Montana.

For more information on the New Markets Tax Credit Program or other business financing options in Montana, contact:
David Glaser, MCDC President, 406-728-9234, ext. 211, or visit MCDC’s website at: http://www.mtcdc.org