Craft3, a nonprofit community lender that helps finance projects in underserved communities, is planning to invest between $25 million and $30 million in the Inland Northwest following an $80 million New Markets Tax Credit allocation, says Steven Phan, senior vice president and new markets tax credit director at Craft3. 

Through the $80 million award, Craft3, a designated Community Development Entity headquartered in Portland, Oregon, plans to support four to five projects across the Pacific Northwest, including two potential developments in the Spokane region — an education project in the city of Spokane and a rural health care facility nearby, Phan says.

“The result really can be transformative when the investments are placed where they can provide the most benefit,” he says. “Craft3 only uses the program for education and health care, but you’ll see it for arts and culture, like theaters, you’ll see it for food banks, YMCA hotels, manufacturing firms, … it could be used for homeownership.”

The New Markets Tax Credit program encourages private investment in low-income communities by providing tax credits to investors who finance qualifying development projects, Phan says. Projects funded through the U.S. Department of the Treasury's program receive a minimum $10 million investment and are typically generational, long-lasting projects with the potential to support a community for a long time, he explains.

Although Phan declines to disclose which organizations could potentially receive funds, Craft3 expects to start disbursing awards in the next couple of months, he says. 

Steve MacDonald, director of community and economic development for the city of Spokane, has spent years educating the business community about the potential benefits of the NMTC program. 

Spokane County has not had a single project funded from the tax credit program since 2011, he says. NMTC deals are allocated a minimum of $10 million per project. He estimates Spokane County and surrounding counties may have missed out on roughly $500 million in private investment during that time.

“The New Markets Tax Credit program is the single best economic development program ever created by the federal government,” MacDonald contends. “It’s literally put billions and billions of dollars into low-income census tracts for years now. And it’s had just a tremendous impact on jobs and investment.”

In an article MacDonald contributed to the Journal in December 2025, he notes that banks that participate in the program receive a 39% tax credit over seven years in exchange for their investment in distressed areas.

“The result is below market, highly flexible, forgivable financing,” he writes. “Essentially free money for projects that create jobs or deliver essential services.”

In 2024, 350 NMTC projects were funded in 44 states, representing $4.8 billion in tax credits and creating 37,000 full-time jobs, he says.

Spokane is especially positioned to receive NMTC funds, MacDonald adds. To meet eligibility criteria, an area must have a poverty rate of 20% or higher, or a median income at or below 80% of the area median. In the city of Spokane, 58% of its 74 census tracts qualify for funding; eight tracts are deeply distressed and 20 are severely distressed, he says. 

The severity of these distressed tracts makes them highly desirable locations for NMTC projects. Community Development Entities are especially interested in selecting projects involving manufacturing, health care, education, social services, and housing. 

"We should be getting NMTC funding for a bare minimum of two projects per year — just within the city boundaries — let alone the region," MacDonald says. 

MacDonald says he believes the region stopped using NMTC primarily because no one locally was coordinating these types of deals. He suspects the previous person who worked to obtain NMTC funds may have retired and moved on, but once that happened, nobody replaced that informal coordinating role. In the last couple of years, MacDonald says he has taken on the role of a regional advocate and educator for the program.

While he’s received interest from many in the business community during presentations, Craft3’s recent allocation is a major opportunity for the region that will prompt more organizations to pursue NMTC financing, increase awareness among developers and lenders, and strengthen regional investment momentum, he says.

“The publicity around one or two of these upcoming closings will be really helpful,” he says. “It will make a difference in getting some people off the sidelines and interested to know how they can use this tool.”

The NMTC program is just one type of financing that Craft3 offers. 

Craft3, which opened a Spokane office in 2015, is a U.S. Treasury-designated Community Development Financial Institution that focuses on lending to borrowers who have difficulty accessing traditional bank financing, says Megan Hulsey, Spokane-based senior business lender at the nonprofit. Founded in 1994 in Ilwaco, Washington, Craft3 serves clients in Washington, Oregon, and North Idaho. 

Outside of NMTC financing, Craft3 also provides loans ranging from $500,000 to $4 million, Hulsey says.

The organization partners with banks to help clients who don’t meet conventional lending standards and helps them with flexible loan terms, business coaching and support, and bridge financing for growth opportunities. The organization's goal is to help businesses stabilize and grow, then transition them back to traditional bank financing within about five years.

“We have a focus on helping people who have been historically underserved,” Hulsey says. “That includes veterans, women, and people of color. But we will lend to any borrower who meets our qualifications and that we feel like (we) can work with to help them get their business up and running or growing in a way that is sustainable.”

Since 2015, Craft3 has invested about $20 million in Spokane County, including to startups, early-stage businesses, and companies seeking recapitalization for growth, she says. Some examples include Indaba Coffee, Method Juice Cafe, and Jupiter’s Eye Book Cafe.

Morgan Lynch, owner of Jupiter’s Eye Book Cafe, opened the downtown shop at 411 W. First, in January 2025, after about a decade of working in marketing and advertising as a graphic designer.

Before opening the shop, Lynch worked with a business adviser through the Washington Small Business Development Center, who helped her build a business plan, financial projections, and profit and loss estimates. Because Lynch didn’t have any history as a business owner, it was difficult for her to receive traditional bank financing. Her adviser knew she would face obstacles receiving traditional financing and connected her to Craft3.

“I didn’t have any real estate, collateral, things like that,” she says. “It’s just me and a dream and a business plan.”

Lynch met with Hulsey and the Craft3 team, who helped Lynch refine the financial structure of her business plan to make the project possible, she says. Since opening, Craft3 has remained a supportive partner, Lynch adds. Craft3 has helped the bookstore with unexpected construction expenses, adjusting financing when the landlord required additional work, and has allowed temporary pauses on loan payments to free up capital for inventory purchases during busy retail seasons, she says.

“There’s a lot of surprise barriers between someone having a vision and then that vision coming to light,” Lynch says. “So having someone on my team who was able to look at the larger picture of the vision and to be able to supply that capital and advice direction when needed is huge … it’s like, you have an idea, you have a dream — you go do the dream part, we’ll help you with how to get there.”

The bookstore’s niche focuses on genre fiction, including fantasy, science fiction, mystery, and horror, reflecting Lynch’s lifelong reading interests and aims of attracting a community of “like-minded weirdos,” she says.