MCDC board learns about New Market Tax Credits

With the announcement of a $6.4 million USDA Broadband grant to help Farmer’s Mutual Telephone Company of Stanton bring fiber optic internet to rural Montgomery County, the question is now being raised about having fiber optic internet available county-wide. If that goal is achieved, Montgomery County would be the first in the nation with county-wide fiber optic internet.

At the regular meeting of the Montgomery County Development Corporation Board of Directors on Dec. 12, the directors heard a presentation from Myriam Simmons, who shared details on the New Market Tax credit, as well as Joey Norris, whose committee served to oversee a county survey on residents’ current internet provider.

According to the details of the survey, more than 70 percent of the participants indicated they would change internet service providers if fiber optic internet were available. Norris said the committee recommended pursuing county-wide fiber optic internet coverage through FMTC, and that New Market Tax Credits were the best option for securing the necessary funding to go towards the multi-million dollar project for fiber in the City of Red Oak.

Simmons explained the details of the New Market Tax Credit and said it was a federal tax credit providing financing with a 1 to 2 percent interest only loan with forgivable loan aspects after seven years of compliance.

“If you’re looking at a $15 million project, and you have a $3 million gap, that covers the $3 million gap,” Simmons said.

To qualify, the project must be located in a qualified census tract, and based on the information provided, half of the project would qualify for the tax credit.

FMTC CEO and general manager Kevin Cabbage was in attendance at the meeting, and said the New Market Tax Credit was a great tool, but he had a few concerns.

“I have a concern about the commitment of that much cash. With what we’re doing, cash flow is premium here. The time frame for completion of the project is also a concern,” said Cabbage.

Norris said the New Market Tax Credit was simply one of the many pieces of the puzzle when it came to funding the project.

Director Bryant Amos said if FMTC decided to pursue the credit, it would be a major business decision, and they could reach out to the committee, which would do what it could to help.

Cabbage said as the county sought to attract companies that want high speed internet, an absolute requirement was to have fiber optics in the ground.

“The fiber optic backbone gives us the infrastructure to grow. The only limitation is the electronics that are put on the end,” said Cabbage.

MCDC director Shawnna Silvius said the county wouldn’t be in the position to be first in the nation for county-wide fiber if FMTC had not done the build-out and investment on their own prior to now.

“We have a huge opportunity. The challenge is how to fill the financial gap, and how to make sure FMTC has the staffing capacity and ability to do the build out given the model they have in this county, and others,” commented Silvius.