July 1, 2010
NDC Creates New Markets Tax Credit Package to Convert Steam Boiler to Biomass
SEATTLE, Wash. – NDC today announced the closing of a $32 million New Markets Tax Credit (NMTC) deal that will allow Seattle Steam, a privately-owned district heating utility, to convert its boiler from natural gas to biomass.
Through the NDC’s ties to the federal NMTC initiative, Seattle Steam secured the necessary private investment to move the project forward, enabling the utility to fully fund the waste wood-fired boiler conversion and access additional working capital.
”When our partner, the City of Seattle, contacted us about helping Seattle Steam obtain low-cost financing through the NMTC program, we were pleased that we could play a role in making this important renewable energy project happen,” said Chuck Depew, regional director for NDC’s northwest division. “New Markets Tax Credits are an important source of capital in these challenging economic times.”
NDC is one of the leading experts of the NMTC program in the nation, with extensive experience deploying over $346.0 million of its own NMTC allocation through its tax credit arm HEDC New Markets, Inc. NDC has also advised other entities with NMTC allocations in closing their transactions as well as assisted project borrowers in structuring NMTC transactions. As advisor to project borrower Seattle Steam, NDC worked with U.S. Bancorp Community Development Corporation (USBCDC), the project’s tax credit investor, to enlist the Community Reinvestment Fund USA, which contributed the NMTC allocation; NDC also worked with Washington Capital Management to negotiate various NMTC issues. NDC has created similar successful NMTC packages for other projects throughout Washington State, including the Pike Place Market redevelopment, Educare Early Learning Center, Seattle Children’s Hospital Research Institute, and most recently the LeMay Car Museum project in Tacoma, Wash.
“With their expertise in NMTCs and other financing tools, NDC plays a vital role in helping us move forward projects like Seattle Steam that are important to Seattle, said Steve Johnson, Acting Director of the City of Seattle’s Office of Economic Development. “The City of Seattle values NDC’s assistance in accessing private capital markets with financing that would not otherwise be available.”
“Participating in NMTC deals, like the Seattle Steam project, provides us with an invaluable opportunity to help the City of Seattle finance projects that move the city forward in a positive way,” said Maria Bustria-Glickman, Vice President of New Markets and Historic Tax Credit Investments with USBCDC. “Our long standing relationship with NDC has opened many doors to participate in these types of deals and we’re thrilled to add Seattle Steam to that list.”
The converted biomass boiler will provide a clean energy alternative by burning wood from pallets and crate materials, shredded wood waste from real estate development land clearing, sawdust and wood trimmings from cabinet shops and wood waste from saw mills. Defined by the State of Washington as a renewable resource, urban-wood waste burning offsets emissions and cuts costs for Seattle Steam customers.
“In 2009, Seattle Steam announced our plan to generate thermal energy from biomass by converting our boilers. Now, with the completion of this deal, we are able to complete the conversion on the first of four boilers, effectively converting one fifth of our steam operation over to biomass. It is a significant and important step for us,” said Stan Gent, CEO of Seattle Steam.
About Seattle Steam
Founded in 1893, Seattle Steam Company is a privately-owned district heating utility that provides heat to 200 buildings in Seattle’s central business district and First Hill neighborhoods. The company has two plants and five boilers in downtown Seattle with 26 employees. The thermal energy is currently produced by a mix of biomass (clean urban waste wood) and natural gas.
About Seattle’s Office of Economic Development (OED)
OED supports a healthy business environment and empowers companies to succeed and grow.
We provide services directly to businesses through advocacy, retention and expansion assistance, and workforce development. OED has several financing options for businesses, including options for small to medium to large businesses.
About U.S. Bancorp Community Development Corporation
With assets of over $6 billion, U.S. Bancorp Community Development Corporation (USBCDC) finances community development and affordable housing projects through the use of New Markets Tax Credits, Historic Tax Credits, Low-Income Housing Tax Credits, and Investment Tax Credits in Renewable Energy. USBCDC is a subsidiary of U.S. Bank, the 5th largest commercial bank in the United States, whose parent company is U.S. Bancorp (NYSE: USB). With $282 billion in assets, the company operates more than 3,000 banking offices and over 5,300 ATMs in 24 states, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions.