Developers recently secured financing for a $12 million priority project several years in the making that will accelerate a major revitalization effort in Twin Falls’ downtown core. The project involves the construction of a new, six-story, mixed-use building at 160 Main Avenue South that will provide commercial office space, retail space and 44 apartments that will be accessible to the local workforce. The building will be the first large-scale, mixed-use building in downtown Twin Falls and is expected to catalyze additional development. Financing came together through a combination of public funds, a loan from Mountain West Bank, private investment from Boise-based developer Galena Equity Partners and the federal New Markets Tax Credit (NMTC) program from MoFi. The project highlights the power of the NMTC program to attract private investment and create jobs in economically underserved communities. Construction, which began in fall 2020, is expected to be complete in spring 2022.
“This revitalization project in downtown Twin Falls is great news for growth in the Magic Valley,” said U.S. Senator Mike Crapo. “I have been a longtime supporter of the New Markets Tax Credit that helps make projects like this possible, and have had the opportunity to visit a number of the Idaho projects over the last few years. Congress successfully extended the NMTC for five years in December, which is the longest extension in the program’s history. The added certainty and stability will allow even more successful investments like this one to take place in Idaho.”
U.S. Congressman Mike Simpson, a longtime advocate of the New Markets Tax Credit program, has seen its positive impacts in projects throughout his district, though this will be MoFi’s first time using the program in Twin Falls. Congressman Simpson has also supported federal legislation to make the program, which is currently set to expire in 2025, a permanent part of the tax code.
“The New Market Tax Credit Program was designed for this very purpose,” said Congressman Simpson. “I am pleased to see this program being put to use in Twin Falls and I look forward to its completion.”
MoFi President Dave Glaser said this project aligns perfectly with the NMTC program’s goals. MoFi identifies NMTC projects based on factors including job creation, job quality, the provision of services in low-income communities and alignment with state and local economic development priorities. MoFi sells the tax credits to investors, typically banks, and puts the proceeds from the sale into the project, providing about 20% of the total costs. The projects that MoFi supports would not have been able to move forward without the tax credit. Mountain West Bank, based in Boise, has agreed to purchase the New Markets Tax Credits for the Twin Falls project and will provide the debt financing.
“We are delighted to work with MoFi and Bill Truax on this exciting project,” said Alison Gonsalves, Executive Vice President and Chief Credit Officer at Mountain West Bank. “The NMTC program is integral to bringing projects like this to market and energizing economic development.”
Building on significant efforts in recent years to revitalize the downtown core, city officials had prioritized the need for commercial office space and workforce housing. According to Twin Falls Economic Development Director Nathan Murray, the new 15,000-square-foot building at 160 Main Avenue South will do just that.
“We are excited for a project of this magnitude and to witness the impact on our downtown core,” said Murray. “We feel that the overall use and design is complementary to the recent infrastructure improvements completed along Main Avenue and the investments made by several existing businesses these past few years.”
The anchor tenant for the commercial space is Kickback Rewards, a growing Idaho company, which will expand its operations by adding 50 employees and occupying a portion of the first floor and the entire second floor of the building. The first floor will also have retail space for startup women entrepreneurs who are working with the Idaho Women’s Business Center and a 2,800-square-foot restaurant space. The upper four floors will contain 44 studio, one-bedroom and two-bedroom apartments, of which 20% will be rent restricted at HUD affordable rental rates and leased to households making 80% or less than the area median income.
Bill Truax, President and CEO of Galena Opportunity Inc., said this project represents the intersection of urban renewal, urban development and federal development tools like New Markets Tax Credits that attract investment in economically distressed areas. In addition, the firm brought equity to the project from its Galena Opportunity Fund. These, said Truax, are essential tools in places where capital availability is often the difference between being able to get a deal done and not.
“We’re extremely excited to see this project come together, because it so completely lines up with what the city is looking for and what we think are great urban redevelopment principles,” Truax said. “The city has invested time and resources to attract exactly this type of development, and the additional investment from the NMTC from MoFi provided the capital we needed to make the numbers make sense. Once complete, this market will have a comp that will allow for many more retail and residential developments to follow. We hope this development will be a key catalyst for future growth in Twin Falls.”
The NMTC program was enacted in 2000, as part of a bipartisan effort to spur private investment and economic growth in low-income and rural communities that lack access to the capital needed to support businesses, create jobs and sustain healthy economies. The credits are awarded annually through a competitive process; to date, MoFi has received nearly $631 million in New Markets Tax Credits.
The credit has remained thanks to incremental, short-term extensions. In December 2020, a COVID-19 relief package signed by President Donald Trump included a five-year extension of the program. Advocates of the program, including MoFi, would like to see it be made a permanent part of the federal tax code.
“Idaho is lucky to have such fierce advocates for the NMTC program in Senator Crapo and Congressman Simpson,” Glaser said. “We’re grateful for their longtime support, because it results in direct, positive impact on communities in Idaho by creating jobs and revitalizing Main Streets that might otherwise be overlooked for investment. This project kickstarts a new era for downtown Twin Falls, and we couldn’t be more excited to be a part of it.”
Since 2012, MoFi has financed 12 projects across Idaho with NMTC, totaling over $286 million in project costs, and creating and retaining 2,400 permanent jobs. Projects include an expansion of Premier Technology in Blackfoot, a manufacturing facility for Golden Valley Natural in Shelley, and new headquarters for Western States Caterpillar in Pocatello, and the Hemming Cedars mixed-use building in Rexburg.
MoFi is actively looking at projects for its most recent NMTC allocation, which will be invested in qualified areas of Idaho, Montana and Wyoming. Communities, businesses and nonprofits that have projects of at least $5 million with a gap in financing are encouraged to contact MoFi at 844-728-9234 or mofi.org to see if they qualify.
Photo via Pivot North Architecture.