FCI SUPPORTS MADISON CHILDREN'S MUSEUM: Construction debt is refinanced with help of New Market Tax Credits (NMTC)

Madison Children’s Museum (MCM) recently refinanced its construction debt with the help of FCI. The project represented a unique collaboration between three banks, including Park Bank, which provided the permanent financing through the NMTC structure; U.S. Bank, which purchased the tax credits; and Johnson Bank, which provided the credits.  FCI facilitated and coordinated the transfer of NMTC to the project and provided assistance to MCM in structuring and utilizing the credits.

The $16.5 million museum project included an initial gift of $5 million from W. Jerome Frautschi to purchase the building. An additional $10 million was raised through a successful capital campaign, and $1.5 million was borrowed for building renovation, exhibit construction, and transitional operating costs. Because capital campaign pledges are generally paid off over five years, MCM took out a loan in 2009 to cover renovation and exhibit costs, and it is this loan that is being refinanced with NMTC.

Madison Children’s Museum’s new building represents a $16.5 million capital investment in downtown Madison. MCM pumps more than $3 million annually into the local economy through wages and procurement of services and supplies. Annually, MCM raises $225,000 to fund its Access for Everyone program which provides subsidized admission for families and school groups in need so that ALL community members have the opportunity to learn through play. MCM employs 68 individuals for a wide range of duties and helps those new to the workforce develop the critical skills needed to be successful in the workplace.

In its first year of operation, MCM drew nearly 270,000 visitors from all over the state and the nation, resulting in related spending at local restaurants and stores. It is common for the museum to admit 1,500 or more visitors per day during peak travel times. Anticipated to be the first LEED-certified museum in Wisconsin, MCM is a model of green renovation, exhibit design, and sustainable operations. Visitors tour the building specifically to study its creative use of recycled building materials and its four-season “park in the sky” green roof. The project created in excess of 100 jobs during construction, with an additional 30 artisans and technicians assigned to installation, design, and fabrication. Visit MCM at http://www.madisonchildrensmuseum.org.

About the New Markets Tax Credit program (NMTC): Created in 2000, the NMTC program is administered by the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund). The NMTC program serves as a catalyst to encourage investment of private capital in urban and rural low-income communities, allowing taxpaying investors to receive a credit against federal income taxes for making equity investments in designated projects. To date, the CDFI Fund has made awards totaling $21 billion in allocation authority. The Museum qualifies for the program because it is located in a redeveloping area of downtown Madison.

Pictured above right to left, Robert Ibanez, Program Manager, New Market Tax Credit Program, Ruth Shelly, Executive Director, Madison Children’s Museum, Donna Gambrell, Director, CDFI Fund, Dennis Nolan, Deputy Director, CDFI Fund