Rocky Mountain Innovation Initiative gets $1.8M from tax credit program

Rocky Mountain Innovation Initiative gets $1.8M from tax credit program

Funds will go toward new building

BY DAVID YOUNG • DavidYoung@coloradoan.com • January 23, 2010

To see the article - http://www.coloradoan.com/article/20100123/BUSINESS/1230325/1046/rss03

Rocky Mountain Innovation Initiative, or RMI2, is one step closer to making its new $7.3 million three-story building a reality thanks in part to some substantial federal funding from the New Markets Tax Credit, or NMTC, Program.

On Wednesday, RMI2 closed on $1.8 million in equity from NMTC, which is much like other tax credit programs except it is intended for economic development and job growth. RMI2's partner in the deal is U.S. Bank Community Development Corp.

NMTC permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities, or CDE. Substantially all of the qualified equity investments must in turn be used by the CDE to provide investments in low-income communities, according to the U.S. Department of Treasury.

Mark Forsyth, chief executive officer of RMI2, confirmed it is received the funding as a result of its new building being located in an Urban Renewal Authority, or URA, and a lower-income census tract.

With the federal funding in place, it took a lot of "risk" out of the project, both for the city and RMI2, Forsyth said.

With the equity, RMI2, a 501(c)3 nonprofit corporation that has helped such scientific and technology startup companies as Sprig Toys, ZeroHero and Eckstein Diagnostics, will break ground shortly on the new building at College Avenue and Vine Street, which will include a 3,000-square-foot wet lab. The move will double its space and allow the organization to consolidate its four facilities in Fort Collins into one.

Forsyth said the NMTC equity will enable them to offer new companies lease rates in the building at a below-market price, a key to RMI2 services, considering many startup companies don't have capital to spare when starting out.

"We think this is really a fundamental enabler for the services we want to offer," Forsyth said. "(For) entrepreneurs in the area ... it will help us offer subsidized below-market lease rates."

The city of Fort Collins is loaning an additional $5.3 million for the project and was a key partner in helping RMI2 work through the paperwork involved in getting the NMTC.

Josh Birks, city of Fort Collins economic adviser, has been working with Forsyth on the project since March 2009 and said it is great to see the project evolve from the planning stage to the building stage.

"It's nice to see your hard work come to fruition in a building," Birks said. "That will be cool."

RMI2 is tentatively planning an official groundbreaking in April, with work on the site expected to begin as early as next week.