SPARTANBURG, S.C. — Los Angeles-based National New Markets Fund, LLC, a SDS Capital Group product, has closed $18 million in New Markets Tax Credit allocation to expand the Highland Baking Company plant in Spartanburg.
The NMTC program incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities."
The new $36.4 million production line will create an estimated 95 new full-time jobs. Financing will be used to build a third production line at the Spartanburg, SC plant. Highland Banking Company currently has 183 employees. The project received $32.5 million in New Market Tax Credits, or $31.8 million in Qualified Low-Income Community Investments (QLICIs), which Highland Baking Company will use for the purchase and installation of new equipment for the facility's expansion. Highland Baking provided an additional $4.5 million contribution to complete project financing.
"The $32.5 million tax credit investment will enable Highland Baking Company to expand our production facility and bring high-quality jobs to South Carolina," said Stuart Rosen, CEO, Highland Baking Company. "NMTCs were key to helping us close the financing gap to help make the expansion of our operation a reality."
Highland Baking Company bakes, fresh freezes and ships bread products such as hamburger buns, pan breads, subs, table breads and dinner rolls. The new production line will allow for the production of a line of lower cost breads, expanding the Company's offerings from current mid-tier breads.
"This investment will bring much-needed revitalization to this South Carolina community," said Deborah La Franchi, president, National New Markets Fund. "This new production line at Highland Baking Company will create quality jobs that will bolster the local economy. NNMF is driven to make meaningful impact investments that can help transform communities. We look forward to the day we get to sample bread from the new line of baked goods."
The project qualified for the federal NMTC program because it is located in a Severely Distressed census tract. The local poverty rate is 47 percent (over four times the current national average) while the unemployment rate is 17.4 percent (twice the national average).
In addition to National New Markets Fund's $18 million in NMTCs, three other community development entities provided NMTCs to Highland Baking Company: $7 million from Urban Action Community Development, $5.5 million from New Markets Support Company, and $2 million from Chase. Chase served as the tax credit investor, providing $9.5 million in tax credit equity.
"It has been a pleasure to work with our long-time partner, Highland Baking Company to support the expansion of its Spartanburg facility through our New Markets Tax Credit equity investment," said Olivia Pipitone, Executive Director of Community Development Banking for Chase. "At Chase, we remain committed to supporting continued investment and economic development in projects like this that create skilled, well-paying jobs that stimulate the local economy and benefit the entire community."