New Markets Tax Credit Program Helps Bring Broadband Services to Rural Alaskan Residents
Kansas City, MO, February 13, 2013 --(PR.com
)-- Thousands more Alaskans will have access to terrestrial broadband services as GCI’s TERRA-NW project moves its way up the northwest coast, thanks in part to New Markets Tax Credit (NMTC) financing provided by Travois New Markets, a nationally certified Community Development Entity, and U.S. Bancorp Community Development Corporation, the community investment subsidiary of U.S. Bank.
NMTC funds will help finance TERRA-NW Phase 2 and Phase 3. Phase 2 will extend the network west to Nome, and Phase 3 will move the broadband network up the northern coast to Kotzebue.
GCI provides voice, video and data communication services to Alaska residential, commercial and government customers, and a previous phase of TERRA (Terrestrial for Every Rural Region of Alaska) has already added more than 400 miles of fiber optic cable and 13 new microwave towers to connect 65 communities in southwest Alaska. NMTC financing will now help GCI to extend the northwest broadband network to the surrounding distressed villages in these areas. This project will extend the network hundreds of additional miles and will add new microwave towers and associated facilities, some of which will be remote, prime-power relay sites.
“GCI is proud to add Nome and Kotzebue to the list of rural Alaskan villages that will benefit from the increased capabilities provided by the TERRA network,” GCI Vice President and General Manager Martin Cary said. “TERRA is good for business, but more importantly, TERRA is good for the future of rural Alaska.”
Rural Alaskan villages, where more than half of Alaska Natives live, are often not connected by roads; travel between them is possible only by air, snowmobile or riverboat, depending on the season. Kotzebue, for example, is located about 30 miles above the Arctic Circle, and 75 percent of its residents are Iñupiat Eskimos. The thousands of residents who will receive new services now rely on satellite connections that can be slow, expensive and unreliable. The improved connections will increase access to education, telemedicine and e-commerce. High definition video conferencing is widely used for medical care and class presentations, and the improved connections will improve the availability of services and reduce costs.
The project’s extremely remote location and harsh weather conditions and terrain create high construction and operating costs, and NMTCs were needed to help offset this burden. Financing includes $12 million of NMTC allocation authority from Travois, project sponsor equity, and more than $3.8 million of NMTC equity from U.S. Bancorp Community Development Corporation.
“GCI’s willingness to literally and figuratively ‘go the extra mile’ is helping to ensure that more Alaskans have access to broadband, no matter where they’re located,” said Matt Philpott, director of New Markets, Historic and Renewable Energy Tax Credit Investments for U.S. Bancorp Community Development Corporation. “We’re pleased that our partnership with Travois and the financial benefit of the New Markets Tax Credit Program is helping to make this project possible and improving social and economic interactions in the region.”
This is the second time Travois New Markets and USBCDC have partnered to provide NMTC financing to TERRA; both companies were involved in the first northwest phase that closed financing in August 2011. Alaska Growth Capitol (AGC) acted as a consultant on the project.
“Community leaders in rural Alaska believe infrastructure is crucial for economic development,” said Vice President of Economic Development Phil Glynn of Travois New Markets. “That is why we saw this as a perfect opportunity to invest for impact.”
This phase of the project will create 80 construction jobs and 95 full-time jobs and will retrain 95 full-time jobs. Construction on the next two phases is expected to be completed by the end of 2014.
About the New Markets Tax Credit program
The New Markets Tax Credit program is administered by the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of the Treasury. Enacted by Congress in 2000, the program encourages the investment of private equity capital into low income communities and, in exchange, allows investors to receive federal tax credits equaling 39 percent of the investment over a seven-year period. These investments are made to spur community and economic revitalization. The NMTC statue requires that investments be located in census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median. NMTC investments of $15.5 billion have generated a total of $50 billion in capital that has been invested in some of the nation’s most underserved communities. For more information, visit www.cdfifund.gov.
About U.S. Bancorp Community Development Corporation
For information, visit USBCDC on the web at www.usbank.com/cdc.
Visit www.travois.com for information about Travois.