Portsmouth's $10 million in tax credits will promote development

PORTSMOUTH

The city will receive $10 million in federal tax credits that will likely spur more development in the Midtown and Victory Crossing areas and help Portsmouth move ahead with other rehabilitation plans despite the financially challenged environment, officials said Monday.

The U.S. Treasury announced that it has awarded the tax credits to Southside Development Enterprises LLC, which is part of the city's housing authority. Southside was one of three groups in Virginia to receive the allocation, along with o rganizations in Christiansburg and Abingdon.

The allocation will allow Southside Development Enterprises to make tax credits available for new projects in qualified areas of the city, said Kathy Warren, Portsmouth Redevelopment and Housing Authority's director of development. Private investors can then buy the credits, which would provide capital for the projects, she said.

"In an economy like ours, having a tool like that to make a deal that much more attractive from a financing perspective is really welcome news," Councilman Doug Smith said.

The Treasury Department gave $3.5 billion to 70 organizations across the nation.

"New Markets Tax Credits are frequently the critical piece of financing needed to complete real estate developments and fund businesses in rural and urban low-income communities," Deputy Treasury Secretary Robert M. Kimmitt said in a news release.

In Portsmouth, the credits were allocated predominantly to spur retail real estate, according to the release.

Southside Development Enterprises LLC also received $21 million in credits in 2004.

Warren said those credits were used to help finance Old Dominion University's Virginia Modeling, Analysis and Simulation Center, which is on the border of Portsmouth and Suffolk, and the Holiday Inn that is currently being built at Port Centre.

"We showed with our original allocation that we can get our funding out on the streets and that there's a need here," Warren said.

Pastor Joe B. Fleming, chairman of the Portsmouth Redevelopment and Housing Authority's board of commissioners, said the board is excited the program will be used to help further the authority's redevelopment efforts.

"We've been quite fortunate over the years," Fleming said. "It appears as if Portsmouth is favored."

Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com