Help for an Economically Depressed Area

The Port Orchard City Council and Kitsap County Consolidated Housing Authority will work together to help local businesses get low interest loans through a federal tax incentive program.
The council on Monday approved an agreement with the housing authority allowing it to process loan applications on behalf of the city for business owners who want to stay or relocate in downtown Port Orchard. The loans are made available through the federal New Market Tax Credit program, designed to stimulate business in economically depressed areas.

The program, administered by a subsidiary of the housing authority, allows local lenders to support local businesses and receive 39 percent tax credits over seven years.
The housing authority has been providing support to businesses and other entities in the City of Bremerton for the past two years. Port Orchard Mayor Kim Abel, a member of the housing authority board, said she was impressed with what the program did for Bremerton and proposed to the city council that they get on board.
“The intent of this program is to help businesses either remain or come to Port Orchard,” Abel said. “This program has been successful in Bremerton, Tacoma and Seattle, and we want to add it to our toolbox of incentives for businesses to move and stay in Port Orchard.”
In 2004, the subsidiary group, Kitsap County New Market Tax Credit Facilitators, qualified to receive $40 million worth of tax credits from the U.S. Treasury Department, which was the second largest award on the West Coast, said Sarah Lee public affairs director for the housing authority.
Through the program, local banks can receive tax credits for making money available to local businesses at lower than prime lending rates. Money from the program has already benefitted parts of Bremerton, including the downtown area and the Westpark housing complex. The housing authority, using census data, has also identified other areas of Bremerton and Port Orchard as being in need.
Investors receive tax credits in the amount of 39 percent of their investments. They can take the tax credits at a rate of 5 percent for each of the first three years of the investment and 6 percent for the next four years. The housing authority manages the investments and administers the loans.
Local banks taking part in the program include American Marine Bank, Bank of America, Key Bank, Kitsap Bank, Kitsap Financial Services, Westsound Bank and U.S Bank.