KINGSPORT - The city of Kingsport plans to apply to the federal government for up to $4 million in new market tax credits - money city officials would like to go toward the construction of the higher education center.
A committee of local educators, business and community leaders has been working behind the scenes for nearly three years on bringing a higher education center to downtown Kingsport.
The idea is for a $10 million to $12 million, 50,000-square-foot center to be located downtown. Northeast State Technical Community College would operate the facility and offer the first two years of core courses. Participating universities and colleges would then offer their bachelor's and master's programs, with degrees being in the name of the university offering the program.
In March, the higher education center proposal received an endorsement from the Board of Mayor and Aldermen, along with up to $2.5 million for architectural, engineering, planning services and any possible land acquisition.
Funding for the new center has been an issue among board members the past couple of months - where the money would come from and whether or not a portion of the regional sales tax could or should be used for the project.
Despite the debate, city officials are taking a step that could ultimately fund 30 percent to 40 percent of the center's construction.
Dave Light, assistant to the city manager, said Kingsport would be applying to the federal government for $2 million to $4 million in new market tax credits (NMTC).
The NMTC program is administered by the U.S. Treasury Department's Community Development Financial Institutions Fund and permits corporations and financial institutions to receive a credit against federal income taxes in exchange for providing funds to communities for redevelopment projects.
"There are limitations on their usage. You just can't go out here and build a multistory, 500-room hotel that's going to be a profit-making venture," Light said. "You can use them for brownfield redevelopment. The HOPE VI area is a very good use because it takes an area and brings it up. You can also use the credits for such things as educational opportunities for the betterment of the community."
And that's where Kingsport hopes to apply the money if it receives any - toward the construction of the higher education center.
Light said no more than 40 percent of the project could be funded with NMTC, thus the $4 million figure being mentioned. Kingsport plans to apply for the funds by midsummer and will expect to hear back from the federal government in September.
Light said all of the qualified investment of the funds would have to be done in a low-income census block track. The downtown area qualifies as such a track, Light said.
Though Kingsport has never received these tax credits in the past, Light said city officials feel good about the Model City's chances.
"I think we stand a very good chance. The center itself, using it in conjunction with HOPE VI to make those dollars go further, all dovetail nicely into the program criteria," Light said. "We feel very good. Is it a sure thing? No, it's not. But we feel very good about our chances."