One of Louisville’s most anticipated real estate development projects has drawn significant attention and support from prominent national investors. A collection of financial leaders has awarded Passport Health Plan – a nonprofit, Kentucky-based Medicaid managed care organization – millions of dollars in special tax credit financing to help bring the company’s new headquarters and Health and Well-Being Campus to reality in downtown Louisville.
Three Community Development Entities (CDEs) are combining to provide $24.35 million in New Markets Tax Credit financing to Passport, bringing $8.55 million in subsidy to assist the project. The CDEs are the National Development Council, Reinvestment Fund, and Telesis Corporation. SB Friedman Development Advisors acted as consultants for this project. PNC Bank will serve as the investor for the $8.55M in tax credit equity.
“The Passport Health and Well-Being Campus will further allow us to meet our shared goal with the Kentucky Department for Medicaid Services (DMS) to help our members develop job skills, acquire education, and ultimately become employed and have access to private insurance,” said Passport CEO Mark Carter.
“Through our collaboration with community partners focused on healthy food, affordable and safe housing, and other services, we will reduce the overall cost of Kentucky’s Medicaid program in the future.”
The New Markets Tax Credit (NMTC) was established in 2000 to provide incentives for investment in low-income communities, according to the Tax Policy Center. Congress authorizes the amount of credit authority, which is then allocated to qualified applications by the Treasury Department. According to the NMTC Coalition, $42 billion in direct NMTC investments were made between 2003 and 2015, leveraging nearly $80 billion in total capital investment to businesses and revitalization projects in communities with high rates of poverty and unemployment.
“The Passport Health and Well-Being Campus is organized around social determinants of health, which are conditions in the environments in which people are born, learn, work, play, worship, and live that affect a wide range of health and quality-of-life outcomes,” Carter said. “Along with the Passport headquarters – which will see more than 300 new jobs from participating partners over the coming years – there will be strong retail and service-based opportunities available on the campus, along with housing, retail, and community-gathering opportunities available.”
The 21-acre Passport Health and Well-Being Campus qualified for an NMTC because it is central to the revitalization of West Louisville, which is in turn the most critical neighborhood development priority for the Metro Louisville region. According to the 2011-2015 American Community Survey, the Census tract where the project will be situated has a poverty rate of 56.6 percent, a median family income equal to about 35% of the Area Median Income (AMI), and an unemployment rate of 19.1 percent (more than twice the national average).
“Every community deserves access to good healthcare and wellness information,” said Daniel Marsh, President of the National Development Council. “The West Louisville community will have much greater access to both with the development of the Passport Health and Well-Being Campus. The National Development Council is proud to support this project with New Markets Tax Credits. It will have a major impact downtown and serve many more people beyond the immediate area.”
“Passport Health Plan’s long-term vision for West Louisville is very much aligned with Reinvestment Fund’s own commitment to use our resources to build strong, healthy, and more equitable communities,” said Nancy Wagner-Hislip, Chief Investment Officer at Reinvestment Fund. “We are pleased to finance this transformative project that is bringing jobs and will promote health and wellness in this community.”
“Telesis CDE is very pleased to have contributed to the financing of the Passport Health and Well-being Campus, an important development that will bring health, housing and livelihoods to the Russell neighborhood and West Louisville,” said Marilyn Melkonian, President of Telesis. “Telesis has been a part of growth, stability and preservation of affordable housing in Russell for more than two decades. We welcome our new neighbor and the opportunities it will bring to residents of City View Park, Russell and beyond.”