10/29/2019 | Press release | Distributed by Public on 10/29/2019 09:52
Harrisburg, PA - Governor Tom Wolf today announced that Commonwealth Cornerstone Group (CCG) has completed a New Markets Tax Credit (NMTC) transaction of up to $8 million to rehabilitate a former automotive dealership site into a mixed-use retail shopping center in Reading.
'This large, vacant parcel of land was having a negative effect on nearby neighborhoods, discouraging investment and reducing home values,' said Gov. Wolf. 'Bringing life back to this property through the variety of retail shops planned for the site will be of benefit to people in that area and should attract additional economic development.'
The 45,288-square-foot structure along Lancaster Avenue was formerly known as the A.W. Cadillac Building and has been vacant for several years. Once rehabilitated, the building will house a number of tenants including an El Gallito Grocery, a nail salon, a smoothie shop, a pharmacy, a restaurant, a beauty and barber school, and a daycare center. The supermarket, which would be the anchor store in the shopping center, is especially welcome in that part of Reading, which has a shortage of healthy food offerings for people living nearby.
With six prospective tenants from the surrounding low-income community planning to occupy the shopping center, it's crucial that these businesses are able to pay rents that keep the project financially viable. With a total project cost of $8.6 million, the NMTC allocation will enable Shuman Development Group (SDG), the project sponsor, to close the financing gap, renovate the existing building, and offer tenants below-market rents.
'This planned shopping center will be less than two blocks from Oakbrook Homes, the largest low-income housing development in Berks County, with more than 4,000 low-income residents,' said PHFA Executive Director and CEO Brian A. Hudson Sr. 'The supermarket, pharmacy, daycare center, and other shops should be a welcome addition to the neighborhood.'
In addition to the supermarket, the daycare center planned for the shopping center is expected to benefit local families. It's anticipated that the daycare center will serve about 55 children a day, with most coming from low-income families.
This project is expected to create 24 temporary, full-time construction jobs. Following the rehabilitation and conversion of the building into a shopping center, the project is expected to support 200 employees at an average wage of $12.39 an hour. The MIT living wage for Berks County is $12.36 an hour. It's estimated that 98 percent of these jobs will be accessible to low-income people. It's also predicted that the operation of the new shopping center will support 40 indirect jobs with $2.5 million in added wages.
About Shuman Development Group
As the only commercial real estate development company founded, headquartered, and primarily focused within the city of Reading, Shuman Development Group is Reading's leading developer. SDG has redeveloped, sold, or leased more than 2 million square feet and more than $100 million of commercial property in downtown Reading. This project will be SDG's third shopping center in the city of Reading.
About Commonwealth Cornerstone Group
The goal of CCG, through its administration of New Markets Tax Credits, is to fund projects in key areas of communities that have historic or cultural value and offer opportunities to spark economic revitalization. CCG utilizes NMTCs to provide loans and equity investments for business expansion, mixed-use development, and community facilities across Pennsylvania. Examples of past developments that have benefited from CCG's investment of tax credits include Bakery Square in Pittsburgh, the Coal Street Community Facility in Wilkes-Barre, and Schmucker Hall in Gettysburg. Learn more at: www.commonwealthcornerstone.org/.
About the New Markets Tax Credit Program
The New Markets Tax Credit Program was established by Congress in 2000 to spur new or increased investments in operating businesses and real estate projects located in low-income communities. The NMTC Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments in specialized financial institutions called community development entities, such as Commonwealth Cornerstone Group. The program is administered by the U.S. Department of the Treasury.