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LONGVIEW, Texas, Dec. 17, 2019 /PRNewswire/ -- Los Angeles-based National New Markets Fund, LLC has closed $23 million in New Markets Tax Credit (NMTC) allocation to expand the AAON Coil Products Inc. plant in Longview, Texas (about 130 miles east of Dallas).
The new $30 million, 195,000 square foot heating, ventilation and air conditioning manufacturing facility will create 155 full-time jobs. It will be built adjacent to AAON's existing 263,000 square foot manufacturing and warehouse facility, which already has a workforce of approximately 400.
The project qualified for the federal NMTC program because it is located in a highly distressed, low-income census tract. The local poverty rate is 36.6 percent (three times the current national average) while the unemployment rate is 18.9 percent (more than five times the current national average).
"The $23 million tax credit allocation from National New Markets Fund will enable us to create high-quality jobs and bring new opportunity to the citizens of Longview," said AAON Coil Products Inc. President Gary Fields. "This project is a great example of how NMTCs can facilitate positive change in a community hit hard by poverty."
The new jobs will provide good wages and extensive benefits, with average annual employee compensation of approximately $45,000. AAON will also offer job training opportunities that include working with local workforce development agencies and Kilgore College-Longview to raise skill levels.
"This project will help Longview create a better, more prosperous future," said National New Markets Fund President Deborah La Franchi. "It embodies everything we work so hard to accomplish with each of our NMTC allocations."
The $23 million in New Markets Tax Credits will be used to purchase equipment for the new facility focused on multiple product lines, including AAON's new SA packaged geothermal heat pump unit. The funding will also help upgrade equipment at the existing Longview plant.
National New Markets Fund is the sole community development entity (CDE) for the project. U.S. Bank serves as the tax credit investor providing tax credit equity financing of $7.5 million.
"U.S. Bank is proud to help AAON Coil Products grow in Longview," said Ashley Gebhard, a NMTC project manager with U.S. Bancorp Community Development Corporation, the tax credit and community investment subsidiary of U.S. Bank. "Investing in projects that create skilled, well-paying jobs – especially in rural areas – boosts economic development, helps individuals achieve financial stability and benefits the entire community."
With the new AAON project, National New Markets Fund has invested in seven projects across Texas totaling $116.7 million in NMTC allocation. In addition, its sister American South Real Estate Fund (ASREF) has invested equity capital in two projects in the state (The Park Village multifamily project in Houston and the Lancaster Road office project in South Dallas). ASREF provides equity capital for projects in low and moderate-income areas throughout a 10-state southern region. Together, the two funds managed by parent company Strategic Development Solutions have made a strong impact by facilitating transformative projects in the Lone Star State.
"We have a long track record of success in Texas and across the Southern U.S.," added La Franchi. "We look forward to continuing to grow our investment portfolio with projects that revitalize communities and improve lives."
About the U.S. Treasury Department's New Markets Tax Credit (NMTC) Program
New Markets Tax Credits (NMTCs) were established by Congress in 2000 to stimulate investment and economic growth in designated low-income communities. They raise investor capital and leverage public and private funding to provide borrowers with financing in the form of favorable rates and flexible below-market terms. The NMTC Program is administered by the U.S. Treasury Department's Community Development Financial Institutions Fund (CDFI Fund).
About AAON Coil Products, Inc.
AAON Coil Products, Inc. is a subsidiary of AAON, Inc. Founded in 1988, AAON, Inc. (NASDAQ: AAON) is engaged in the engineering, manufacturing, marketing and sale of HVAC (heating, ventilation and air conditioning) equipment for commercial use. For more information, please visit www.AAON.com.
About National New Markets Fund
National New Markets Fund, LLC invests in projects that foster job creation and overall economic/social development in targeted low-income communities nationwide. To date, it has received $542 million in New Markets Tax Credit (NMTC) allocation from the U.S. Treasury's CDFI (Community Development Financial Institutions) Fund. It was launched in 2005 as a partnership between Los Angeles-based Strategic Development Solutions (SDS) and Boston-based Economic Development International. More information about National New Markets Fund is available at http://www.sdsgroup.com/funds/national-new-markets-fund. Information about its sister American South Real Estate Fund is available at https://asref.com/.
About U.S. Bancorp Community Development Corporation
With $31.1 billion in managed assets as of September 30, 2019, U.S. Bancorp Community Development Corporation -- a subsidiary of U.S. Bank -- provides innovative financing solutions for community development projects across the country using state and federally sponsored tax credit programs. USBCDC's commitments provide capital investment to areas that need it the most and contribute to the creation of new jobs, the rehabilitation of historic buildings, the construction of needed affordable and market-rate homes, the development of renewable energy facilities, and the generation of commercial economic activity in underserved communities. Visit USBCDC on the web at www.usbank.com/cdc.
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SOURCE National New Markets Fund, LLC