The Phoenix IDA, as outlined in the IDA Act, the state law that created it more than four decades ago, promotes community and economic development. Through innovative financing, the Phoenix IDA helps attract private capital that boosts economic development in the Greater Phoenix area.
Additionally, as administrators of the Phoenix Community Development & Investment Corporation (PCDIC), a nonprofit created by the City of Phoenix in 2002, the Phoenix IDA continues to expand investments in areas such as healthcare and affordable housing due to multimillion-dollar federal awards for New Markets Tax Credit financing, which benefits local projects in under-resourced areas.
Providing Innovative Public Finance Options
The Phoenix IDA collaborates with organizations to provide innovative public finance options, including bonds, investments and loans, to projects that benefit the overall health and sustainability of underserved communities. Projects are focused in the areas of housing, healthcare, education, and community and economic development.
As an example, the Phoenix IDA financed $8 million in private activity bonds for Soluna Apartments, the first of a five-phase undertaking that represents the single largest public housing redevelopment effort in Arizona history, according to project developer Gorman & Company. The 177 new affordable housing units opened in late 2022 at 19th Street and Roosevelt in Phoenix and represent a prime example of the City of Phoenix’s Housing Phoenix Plan, which has the goal of creating and preserving 50,000 affordable-housing units by 2030, according to Titus Mathew, City of Phoenix housing department director and PCDIC board member.
“Ensuring affordable housing options for all who call our city home is a top priority for me,” says Phoenix Mayor Kate Gallego. “One of the greatest challenges our residents face is simply housing availability, and 177 new units here at Soluna Apartments is a great step forward in addressing that.”
Over the past decade-plus, the Phoenix IDA has closed more than $3.1 billion in bond transactions, which have greatly enhanced communities, particularly in the areas of healthcare and affordable housing.
Leveraging Federal Funds via the New Markets Tax Credit
Under PCDIC’s umbrella, the organization has been awarded $135 million in federal New Markets Tax Credit (NMTC) allocations over the past three years alone. These funds, provided by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund, stimulate private investment in projects that create substantial community impacts in distressed communities. The program boasts that for every $1 invested by the federal government, the NMTC program generates more than $8 of private investment.
Recently, the Mesa-based nonprofit Child Crisis Arizona received $15 million in NMTC financing from PCDIC to acquire 2.4 acres of land and build a new, 38,000-square-foot Center for Child & Family Wellness. This investment enables the organization to increase the capacity of its foster care and family education programs by serving an additional 2,700 individuals annually.
Late last year, PCDIC also deployed $12.5 million in NMTC financing to VillageMD, a national provider of value-based primary healthcare services. The funding supported build-out of seven full-service Village Medical at Walgreens primary care practices, strategically located in low-income and medically underserved areas of Phoenix and Mesa.
“Access to quality medical care is a challenge for many residents in our district,” says Phoenix Councilwoman Betty Guardado, who was an early advocate of the financing. “Not all residents have transportation, and these practices are located right near the homes of our community members, which gives them the opportunity to get care from experienced, trusting physicians and advanced practice providers.”
Giving Back via Community Development Funds
At the heart of the missions of both the Phoenix IDA and PCDIC is a commitment to invest back into under-resourced communities in Phoenix and Maricopa county. Revenue generated from innovative financing has enabled the organizations to reinvest nearly $3 million into 61 nonprofits last year alone.
The Phoenix IDA and PCDIC each maintain a Community Development Fund and, with out-of-state bond transaction fees and other revenues, both organizations award grants to local nonprofits in the areas of affordable housing, health innovation, youth and family development, as well as economic and community development.
Since 2011, both Community Development funds have allocated more than $10 million to local nonprofits.
With a long history of innovative financing experience at both the Phoenix IDA and PCDIC, we will continue to invest in underserved markets for years to come.
Juan Salgado is the CEO of the Phoenix IDA and the Phoenix Community Development & Investment Corporation (PCDIC). These two organizations work to provide innovative public financing options to organizations that will improve the quality of life for individuals who live and work in underserved areas.
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