The federal New Markets Tax Credit (NMTC) program is allowing companies in underserved communities—both rural and urban—to expand and compete globally. For the past 16 years, this federal financing program has helped thousands of companies across the country build new locations, finance expansions, introduce new technologies, and free up working capital. When businesses use this capital to solve their own funding challenges, it leads to an economic revitalization and exciting new employment opportunities in local communities. Three companies—Darlington Veneer in South Carolina, Viracon in Minnesota, and Premium Peanut in Georgia—have seen the benefits of the NMTC program first-hand in recent years. Though each company operates in a different community and exists in a different industry, they had similar needs for funding, and similar desires to expand. Darlington Veneer Founded in 1918, Darlington Veneer—a quality hardwood and plywood manufacturer—has stood strong through tough times over the years. But following the building industry’s decline during the Great Recession, the company struggled.
The NMTC program allowed Darlington Veneer to not have to worry about their working capital, and instead, focus on creating a more sustainable organization and employing their assets more efficiently. They were able to open up the dormant DV Timber timberlands for harvesting, which preserved 228 jobs and created new logging, mill, and warehouse positions.
“The New Markets Tax Credit program empowered Darlington Veneer to not only sustain itself financially but to also expand and add incremental new jobs,” said Kennedy Breeden, CFO of Darlington Veneer. “The company has not looked back, financially or operationally, since then.”
As cities across the country continue to expand upwards, the demand for specially manufactured architectural glass continues to broaden. Viracon, Inc., a subsidiary of Apogee Enterprises, manufactures high-performance glass, and boasts a diverse project portfolio, having contributed glass to One World Trade Center in New York City, the U.S. Bank Stadium in Minneapolis, and the International Jetport in Portland, ME.
However, as global competition intensified and demand specifications narrowed, Viracon faced manufacturing limitations, and, in order to remain competitive, needed to upgrade their capability to manufacture oversized glass panels.
The NMTC program helped Viracon with their expansion. Their facility in Owatonna, MN—which had operated since 1970—will now house new specialty manufacturing equipment. With 1,300 employees, Viracon is already one of the top employers in its rural community. The expansion will not only preserve these jobs, but it is expected to generate between 80 and 100 new jobs with full benefits.
Peanut farming is a large industry in southern Georgia. Yet the nature of farming in this region can be quite fickle for peanut farmers. Contracts with growers and processors are often short-term and vary widely in availability and pricing. Because of the uncertain revenue streams, farmers struggle to plan crop rotations and capital. Premium Peanut has a different idea. A newly formed organization, Premium Peanut built the nation’s largest single shelling facility in Douglas, GA through a cooperative arrangement with 225 member farms. The biggest roadblocks facing this new organization were financing and an extremely compressed production schedule.
“We were a very different financing project,” said Karl Zimmer, president and CEO of Premium Peanut. “We went from zero to 100 overnight.”
Regardless of how different they might be, Premium Peanut proved to be a perfect fit for the NMTC program. Nearly 29% of the local population has an income below the poverty line, and Douglas had an approximate 9% unemployment rate. The new shelling plant came online in early 2016 and was projected to create 100 direct jobs, and create roughly 30 new jobs indirectly, primarily to truckers.