In the last two awards cycles, HRV won a total of $100 million in New Markets Tax Credits designed to spur investment in distressed or severely distressed areas that otherwise would not attract capital. It has not invested in a Norfolk project since 2008. It has backed only four projects in Norfolk, including a boat hotel near East Beach, a hotel near Old Dominion University, a medical plaza across from the Sentara Norfolk General complex, and the refinancing of the Attucks Theatre. HRV has funded projects worth hundreds of millions of dollars benefiting cities and rural areas in at least 15 states, including Idaho, Texas, and Nebraska. It could be as much as $10 million, more if it sought permission to exceed the 30 percent threshold.
How much it has available to spend on a Norfolk project would be based upon the amount of the $100 million that has already been allocated to urban areas. In short, HRV could invest anywhere in any qualifying project without endangering its eligibility for more tax credits awards. The pandemic exception permits community development entities like HRV to invest up to 30 percent of their allocations outside their usual business strategies without receiving approval from the Treasury Department (it could exceed 30 percent with approval). It is unclear whether Jackson knew of the available tax credits and the exception. Doing so, they added, might endanger future awards of tax credits and threaten the profits that have trickled to the housing authority. In a letter to council, Jackson said HRV had become a “rural” community development entity focusing on three business strategies - health care facilities, healthy food, and manufacturing - and it would be difficult to invest in Norfolk. Ronald Jackson, NRHA’s executive director, and Alphonso Albert, HRV’s board chair, did not mention the exception or the available allocations during a presentation where some City Council members prodded the community development entity to invest in Norfolk. When asked about the exception in an email two days earlier from Jared Chalk, the city’s director of development, Jennifer Donohue, HRV’s chief executive officer, portrayed it as being more difficult to use than outlined in federal regulations. She did not respond to a question about whether there was an opening to include a Norfolk project in HRV’s present allocations. She added that Norfolk businesses interested in the tax program could complete HRV’s intake form or contact the economic development department.
In an email the day after NRHA and HRV representatives met with City Council, Delphine Carnes wrote that she was familiar with the pandemic exception.
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Those exchanges followed a series of stories by The Virginia Mercury that detailed how Hampton Roads Ventures has won $360 million of New Markets Tax Credits, but invested only a fraction of that in Norfolk. But they failed to disclose the available allocations during extensive email exchanges with the City Attorney’s office and the Department of Economic Development.
Representatives of Hampton Roads Ventures have said they were willing to consider including a Norfolk project in their next application for tax credits in early 2023. Hampton Roads Ventures, the subsidiary of Norfolk’s housing authority, has $43 million in tax credits that have not been assigned to projects, according to a federal report.Ī pandemic exception to the program’s stringent investment regulations means some of that money could go to a qualified Norfolk project, bypassing the hurdles to backing local projects that HRV representatives have detailed to city officials in recent months.