February 20, 2020
National New Markets Fund Closes $23 Million in NMTC Financing to Develop Westervelt Wood Milling Facility in Southwest Alabama
State-of-the-Art Mill Will Bring More Than 125 Permanent Full-Time Jobs to Community with 21.8 Percent Unemployment Rate
Thomasville, Alabama – January __, 2020 – Los Angeles-based National New Markets Fund, LLC has closed $23 million in New Markets Tax Credit (NMTC) allocation for The Westervelt Company to develop a state-of-the-art wood milling facility near rural Thomasville, Alabama (in Clarke County, about 125 miles southwest of Birmingham).
The $191.6 million facility will produce approximately 250 million board feet of pine lumber annually, taking advantage of the company’s nearby timberland and other facilities, as well as its existing customer base.
Expected to be completed and fully operational in 2021, the new mill will also create an estimated 125 permanent full-time jobs in a census tract where the unemployment rate is 21.8 percent and the poverty rate is 20.5 percent. Workers at the mill will earn an average of $59,014 per year (plus comprehensive benefits), which is over 267% greater than the Clarke County average annual living wage of $22,090. Clark County and neighboring Wilcox County are among the most economically distressed counties in Alabama.
“NMTC financing provides an important part of the overall capitalization for construction, infrastructure and equipment, as well as workforce development and job training,” said The Westervelt Company President and CEO Brian Luoma. “Without NMTC support, the site would not have been chosen, nor project proceed, leaving the distressed community in and around Clarke County without critical new jobs and economic growth.”
The Project is funded with a $150 million investment from The Westervelt Company and $56 million in NMTC allocation from four Community Development Entities (CDEs): National New Markets Fund ($23 million), Dakota’s America ($17 million), Rural Development Partners ($9.5 million) and SunTrust Community Development Enterprises ($6.5 million). SunTrust (now Truist) serves as the tax credit investor. Line of credit banks include Wells Fargo Bank, Truist Financial Corporation and Regions Bank.
“This project demonstrates how we can use NMTCs to bring economic opportunity to a severely underserved community,” said National New Markets Fund President Deborah La Franchi. “Clarke County and neighboring Wilcox County are among the most economically distressed counties in Alabama. We look forward to working with The Westervelt Company to help create better lives for people across the region.”
The Project is In-line with the state’s Accelerate Alabama 2.0 strategic economic development plan, which focuses on business recruitment, retention and renewal through job creation, innovation, R&D and commercialization.
Alabama Governor Kay Ivey has said, “The Westervelt Company has long played a prominent role in Alabama’s booming lumber industry and has done so while promoting good environmental stewardship. I’m very excited to see that Westervelt is thriving and that they are building their second mill in rural Clarke County. This manufacturing facility is going to have a major impact on the area.”
Since it was founded in 2005, National New Markets Fund has focused much of its investment portfolio in the South. This focus is consistent with the Fund’s mission to invest in projects that help revitalize distressed communities, including those hit especially hard by the loss of manufacturing jobs, natural disasters and other macroeconomic factors.
About the U.S. Treasury Department’s New Markets Tax Credit (NMTC) Program
New Markets Tax Credits (NMTCs) were established by Congress in 2000 to stimulate investment and economic growth in designated low-income communities. They raise investor capital and leverage public and private funding to provide borrowers with financing in the form of favorable rates and flexible below-market terms. The NMTC Program is administered by the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund).
About National New Markets Fund
National New Markets Fund, LLC invests in projects that foster job creation and overall economic/social development in targeted low-income communities nationwide. To date, it has received $542 million in New Markets Tax Credit (NMTC) allocation from the U.S. Treasury’s CDFI (Community Development Financial Institutions) Fund. It was launched in 2005 as a partnership between Los Angeles-based Strategic Development Solutions (SDS) and Boston-based Economic Development International. More information about National New Markets Fund is available at https://www.sdsgroup.com/funds/national-new-markets-fund. Information about its sister American South Real Estate Fund is available at https://asref.com/.
About Dakotas America LLC
Since 2006, Dakotas America LLC has received six New Markets Tax Credit (NMTC) allocation awards by the U.S. Department of Treasury CDFI Fund to stimulate economic investment in low-income communities. Dakotas America has $400MM in NMTC allocation under management and invests in predominantly rural projects that promote workforce development, quality jobs, and long-term economic sustainability. Dakotas America was formed in 2005 by two rural economic development non-profits – Dakota Resources and Rural Development Finance Corp. For more information, visit dakotasamerica.com.
About The Westervelt Company
The Westervelt Company, a privately held company headquartered in Tuscaloosa, Ala., was founded in 1884 and is currently under the fourth generation of family leadership. Westervelt is an industry leader in land management, wood products manufacturing and environmental mitigation. The company is recognized for excellence in sustainable forest management, responsibly sourced forest products and services, natural resource stewardship and ecosystem conservation. With more than half a million acres of land under management, Westervelt’s diverse businesses all work together to ensure the sustainable stewardship of natural resources today, tomorrow and for many generations to come. For more information, visit www.westervelt.com.
About Rural Development Partners
Rural Development Partners (RDP) is a CDE with a national service area, focused on growing access to quality jobs in distressed areas of rural America. RDP invests in businesses and industries that create catalytic job growth. Beyond providing jobs, RDP forges public-private partnerships to support local workforce development initiatives that make jobs more accessible and induce additional private investment. The company also supports rural job access and job success by investing in businesses and non-profits that increase rural access to healthy foods. From 2004 through 2019, RDP won eight NMTC awards from the U.S. Treasury totaling $541.7 million. For more information, visit www.rdpimpact.com.
Truist Financial Corporation (NYSE: TFC) is a purpose-driven company dedicated to building a better future for its clients, teammates and communities. With 275 years of combined BB&T and SunTrust history, Truist is one of the nation’s largest financial services holding companies offering a wide range of services including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending and wealth management. Headquartered in Charlotte, North Carolina, Truist serves approximately 10 million households with leading market share in many high-growth markets in the country. Truist Bank, Member FDIC. Learn more at Truist.com.