The city of Spokane Community and Economic Development Division will host an event this month to spread awareness about the federal New Markets Tax Credit program.

“I think there’s not a lot of people who know about the program here,” says Steve MacDonald, city of Spokane community and economic development director. “The New Markets Tax Credit program can be utilized for a variety of different things.”

The event, titled Bridging the Investment Gap: Flexible, Forgivable Capital for Spokane, will take place 10 a.m.-noon Feb. 28, at the Spokane Convention Center, 334 W. Spokane Falls Blvd., Room 201. Tickets to attend the event are free.

The tax credit program was established by Congress in 2000 and was designed to increase the flow of private-sector capital to businesses, nonprofits, community facilities, and other projects in America’s poorest communities, according to the New Markets Tax Credit Coalition website.

Investment into low-income communities is designed to create jobs, alleviate poverty, and provide goods and services that might not exist or are in limited supply in an area, explains MacDonald.

The tax credits are applied for by groups called community development entities. A CDE is usually a nonprofit loan fund, community development organization, or a private financial institution, according to the coalition's website.

“We don’t have one of those (CDEs) here in Spokane,” says MacDonald.

When a CDE wins a tax credit allocation, it raises private investments, which are then used for projects and businesses in low-income communities, the coalition information explains. In return for an equity investment in a CDE, a private investor receives a 39% credit against federal income taxes, spread out over seven years.

“It benefits projects and helps them get done because it provides very flexible financing,” says MacDonald. “When you boil it down, it provides about a 20% subsidy to qualified projects in qualified census tracts.”

Since the creation of the program in 2000, it's been used to provide funds for only five Spokane projects, with the most recent deal closing in 2011, MacDonald says.

The construction of the central Spokane YMCA facility was among the projects here to benefit from the program.

In Spokane, 34 of the city's 74 census tracts qualify for New Markets Tax Credit financing, city data shows.

“We have all these eligible census tracts, and we’re not taking advantage of that,” says MacDonald. “At the same time that we’re not taking advantage of it, cities across the country are using New Markets Tax Credits to draw investment into their communities.”

While the program won’t work for every project, MacDonald hopes many will benefit from it in the future.

“Why not take advantage of a program that provides basically a 20% subsidy on the cost of the project?” he asks.

The city's event will feature several guest speakers, including MacDonald and Spokane Mayor Lisa Brown.