Tax credit financing provided for 2 N.M. projects Funding Jumpstarts Building of New Electrical Subs

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ALBUQUERQUE, N.M. – Two high profile development projects in New Mexico that will benefit Native American communities recently received a substantial economic boost as U.S. Bancorp Community Development Corporation (USBCDC) and Travois New Markets, a Community Development Entity (CDE) dedicated to investments benefiting Native American communities, teamed up to provide more than $12.7 million in combined New Markets Tax Credit (NMTC) financing. The NMTC funding will be used to jump start the building of two electrical substations on the Navajo Nation Reservation in Shiprock and to complete the renovation of the ANDALUZ (formerly known as La Posada Hotel) in Albuquerque that, when operational, will employ at least 20 percent of its staff with Native Americans.

USBCDC and Travois New Markets worked to leverage an existing asset by The Navajo Tribal Utility Authority (NTUA), resulting in a $6.4 million investment to help finance the construction of two electrical substations on the Navajo Nation Reservation. The new substations will nearly double electrical capacity to the Shiprock region without raising residents’ electric rates and bring service to 400 families that currently do not have power. It will also catalyze $41 million of economic development that the Navajo Nation has yet to move forward on due to lack of adequate electrical service from the existing 40-year old substation and transformers.

The project is expected to be complete and generating power by late summer 2009. Once up and running, further building projects that have been on the back burner can begin, including the construction of a new home for the Navajo Housing Authority, a new school, apartments, adult treatment and behavioral centers, and a home for women and children.

“Safe, reliable electrical stations will bring service to many who are currently without. It will also serve as a conduit to good paying jobs both now, and in the future, for our growing community,” said Walter Haase, NTUA General Manager.

The Navajo Nation includes some of the poorest census tracts in the United States. Navajo records currently track the poverty rate on the reservation at more than 30%, unemployment exceeding 35% and the per capita income at less than $10,000. An estimated 30 construction jobs will be created to complete the substations. It is projected that up to 500 more jobs will be created on the reservation once other economic development projects get up and running.

USBCDC also teamed up with Travois New Markets to provide $6.3 million in NMTC financing for the $38 million renovation of ANDALUZ, a historic hotel at 125 2nd Street Northwest in Albuquerque. Efforts are well underway to turn the 1939 structure, which was originally built by Conrad Hilton, into a 107-room, LEED-certified boutique hotel that will serve as a premier venue for meeting planners and attendees. A cultural center on the mezzanine level will showcase artifacts and displays that educate, preserve and promote the great artistic, historical, cultural and ethnic treasures of the southwest and New Mexico. It is scheduled to open in mid-summer of 2009.

According to Phil Glynn, director of Travois New Markets, at least 200 jobs will be generated from the hotel’s revival, from 80 workers hired during its construction to 108 full-time and 26 part-time workers needed during its operation. ANDALUZ anticipates employing at least 75 percent of its staff locally.

The only surviving historic hotel in Albuquerque, it was placed on the National Register of Historic Places in 1984 and designated as an Official Landmark by the City of Albuquerque in 1990. Energy saving elements, including the installation of the state’s largest solar heating system, were incorporated during the renovation to reduce the hotel’s energy consumption by 21 percent. Age-old asbestos and lead were also removed from the structure, and environmentally-safe building materials were used such as low VOC paint and natural fiber carpeting.

ANDALUZ owner Gary Goodman said, “Besides being LEED certified, ANDALUZ will blend the architectural magnificence of the existing building with the very latest technology to give it both historic charm and modern conveniences right in the heart of our vital downtown.”

Marc Hirshman, USBCDC director of New Markets, Historic, and Renewable Energy Investment Tax Credits, explained that the NMTC Program is administered through the Community Development Financial Institutions Fund (CDFI Fund) by the U.S. Department of the Treasury. The NMTC Program serves as a catalyst to encourage investment of private equity capital into low-income communities and allows taxpayers to receive a credit against Federal income taxes for making equity investments in designated CDEs, such as Travois New Markets. Substantially all of the qualified equity investment must in term be used by the CDE to provide investments under favorable terms in low-income communities. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period.

About Travois New Markets

Travois New Markets, a nationally certified Community Development Entity (CDE), is dedicated exclusively to meeting the needs of Native Americans in low-income communities. Travois New Markets received a $30 million allocation of New Markets Tax Credits in 2007 from the Community Development Financial Institutions Fund of the U.S. Department of the Treasury. The Travois family of companies offers development assistance, compliance support, design services and comprehensive training to the nation’s Native American population with clients across the United States from Washington to Maine.

The 9th Annual Travois Indian Country Tax Credit Conference, created to provide information about Low Income Housing Tax Credits and New Markets Tax Credits, will be held Aug. 17-19, 2009, at the Hyatt Regency Tamaya Resort and Spa in Santa Ana Pueblo, N.M. For more information about Travois, please visit www.travois.com .

About U.S. Bancorp’s Community Development Corporation

With assets of over $5.5 billion, U.S. Bancorp Community Development Corporation (USBCDC) is the largest New Markets tax credit investor in the country, investing billions of dollars nationwide in hundreds of transactions. These equity investments have provided much needed revitalization and new resources to communities throughout the country. USBCDC finances community development and affordable housing projects through the use of New Markets, Historic, Low-Income Housing, and Renewable Energy tax credits. USBCDC is a subsidiary of U.S. Bank and U.S. Bancorp (NYSE: USB).

U.S. Bancorp, with $266 billion in assets, is the parent company of U.S. Bank, the 6th largest commercial bank in the United States. The company operates 2,791 banking offices and 5,164 ATMs in 24 states, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com.