Atlanta gets $75M in federal funds for revitalization projects

The U.S. Department of the Treasury recently awarded $75 million to the city of Atlanta for development projects in historically underserved communities, a record for the city. But it comes with a new twist to meet policies of the Trump administration.

In awarding the New Markets Tax Credit program funding, the Treasury Department said it would modify the funds’ permitted uses and monitor spending to comply with President Donald Trump’s executive orders combating diversity, equity and inclusion, and environmental, social and governance initiatives.

Over the summer the city of Atlanta lost tens of millions in federal airport grants after leadership refused to disavow the city’s DEI programs. Since then, Atlanta quietly rebranded its diversity office to comply with the federal orders, but has not changed its minority contracting thresholds. Mayor Andre Dickens has compared the Trump administration’s anti-DEI efforts to the biblical tale of David and Goliath.

The New Markets Tax Credit award is Atlanta’s largest to date under the program, which has invested almost $500 million in the city since 2007, said Stephen McRae, president of Atlanta Emerging Markets Inc., which receives the funding on the city’s behalf. AEMI is a subsidiary of Invest Atlanta, the city’s economic development arm.

In announcing a “double round” of New Markets Tax Credit awards nationwide, the Treasury Department said former President Joe Biden’s administration had used the program for “woke” DEI and ESG initiatives “at the expense of the program’s statutory community revitalization purpose.”

In Atlanta, this round of funding will be more focused on job creation, but health care, youth and child care projects are still eligible, McRae said.

“We’re going to stay true to our mission,” he said. “We are still focused on serving historically underinvested neighborhoods with basic services.”

The money comes to the city in the form of tax credits, which AEMI sells to private investors — typically national banks. The city then uses the money from the sales to incentivize developers for qualifying projects.

Atlanta last received a New Markets Tax Credit award in 2022 for $55 million, McRae said.

About $12 million of the prior tax credits were invested to help fund the expansion of the Russell Innovation Center for Entrepreneurs in Castleberry Hill, in a deal that closed just last week, McRae said. Of that, $10 million in New Markets Tax Credits came from the Florida-based Black Business Investment Fund.

About $15 million of Atlanta’s credits were invested in the Salvation Army’s Red Shield Shelter and $12.5 million supported the new headquarters and distribution facility for Open Hand Atlanta, he said.

The tax credits are also helping renovate the Phillis Wheatley Westside YWCA to add child care, skills training and health services, McRae said.

To qualify for revenue from the tax credits, projects must cost at least $5 million and be located in distressed neighborhoods as designated by the U.S. Census. Organizations can layer them with contributions from the city’s tax allocation districts, where new property tax revenue is funneled into redevelopment funds.

Dickens is pushing to extend the life of the eight tax allocation districts in a proposal that has generated debate among the City Council.

Of the 142 financing entities that received awards, only Atlanta and 13 others served local areas such as cities or counties, according to the Treasury Department. The others had statewide, multistate or national footprints.

“It’s a really incredible opportunity to continue to reinforce the work that Mayor Dickens and Invest Atlanta have done around supporting neighborhoods and making sure all neighborhoods have access to opportunity,” McRae said.

Dickens also chairs the Invest Atlanta board.