Federal Economic Development Funds
Community Enterprise Clinic Helps Client Compete for $40 million in Federal Economic Development Funds
Duke Law School's Community Enterprise Clinic (CEC) is working to ensure that the South gets its fair share of federal economic development funds. Collaborating with Nixon Peabody LLP, the CEC helped the North Carolina Community Development Initiative Capital, Inc. (“Initiative Capital”), a non-profit lender, apply for a $40 million allocation from the New Markets Tax Credit (NMTC) program. The NMTC program, enacted in 2000, is the largest new federal community development program in several years, and it will finance more than $15 billion in new commercial activity in low-income communities throughout the country by the end of the decade.
“To this point, states in the Southeast and the South have been underrprepresented in the program,” explains CEC director and Associate Clinical Professor of Law Andrew Foster. “By representing Initiative Capital in this matter, we are trying to reverse that trend.”
Initiative Capital has provided more than $12 million in loans over the past five years to grassroots community development organizations in North Carolina. If awarded an NTMC allocation, it will expand its lending activities to provide critically needed gap financing for real estate projects and operating businesses throughout the region.
“The capital raised through the NMTC program will allow Initiative Capital to have significant and positive impacts on persistently poor communities throughout the South,” said C. Everett Wallace, president of Initiative Capital. “Because this was such an important opportunity for us, it was critical that we submit the best application possible. Working with the Duke Law Clinic and Nixon Peabody let us achieve this objective.”
Lauren DeSantis '06 and Foster helped Wallace and his staff plan and draft the application. “Representing Initiative Capital in this matter gave me a great opportunity, as a law student, to do what lawyers active in community development finance do on a daily basis,” said DeSantis. “I was able to draw on what I've learned in the classroom to help a real client. It has been a great experience and a fantastic part of my legal education.”
Merrill Hoopengardner '04, an associate in Nixon Peabody's Washington, D. C. office, represents a number of clients in the NMTC industry in her practice, and provided guidance and feedback to the CEC throughout the process. “As a former student in the Clinic and a graduate of the Law School, it was wonderful to be able to work closely with a current student on such an important project,” said Hoopengardner. “Lauren and the rest of the team did a terrific job and, in the end, Initiative Capital submitted a very compelling application that we think has a good chance of getting an allocation.”
It is expected that the U.S. Treasury Department will award 2006 NMTC allocations in spring 2006.
