HOUSTON, TX -- (Marketwired) -- 01/30/14 -- Aker BioMarine Manufacturing (AKBM Manufacturing) has secured $28 million in New Markets Tax Credit (NMTC) allocation from National New Markets Fund, LLC, Texas Mezzanine Fund and Chase New Markets Corporation to transform a vacant former Dreyer's Grand Ice Cream plant into a fully operational krill manufacturing facility.
The redeveloped facility will extract omega-3 fatty acids from krill to produce supplements designed to promote physical and mental health. Krill, a small ocean crustacean that congregates in swarms, is one of the most abundant biomasses on the planet. Krill supplied to the new AKBM Manufacturing plant will be harvested with a sustainable method in order to prevent unintentional fish capture and minimize ecological impacts.
The existing 144,800 square foot facility is situated on more than nine acres in a highly-distressed census tract of Houston with a 14.2% unemployment rate and 19.2% poverty rate. Dreyer's Grand Ice Cream previously owned the plant and ceased operations in 2010, affecting 168 manufacturing and distribution employees.
AKBM Manufacturing recently executed an agreement to purchase the facility and restore 50 manufacturing jobs within its first three years of operation. The facility has the ability to double its capacity and create an additional 50 jobs through future growth.
The $28 million allocation of federal New Markets Tax Credits (NMTCs) includes $12 million from National New Markets Fund, $14 million from Texas Mezzanine Fund and $2 million from Chase, which also served as the tax credit investor.
"The New Markets Tax Credit program was critical in making this project a reality," said Gaetan Sourceau, CFO of AKBM Manufacturing. "Our expansion to Houston might not have happened without NMTC financing, and the resulting benefits -- including the jobs that will be created -- might have been lost."
President and CEO of Texas Mezzanine Fund Victor Elmore added, "The federal New Markets Tax Credit program creates economic opportunity and combats poverty. By helping Aker BioMarine Manufacturing finance its expansion, these credits will have a profound and positive impact on our state."
The NMTC program was established by Congress in 2000 to stimulate investment and economic growth in designated low-income communities. It raises investor capital and leverages public and private funding to provide borrowers, like AKBM Manufacturing, with financing in the form of favorable rates and flexible below-market terms. NMTCs fill financing gaps when other public and private funding sources are insufficient or unavailable. They help borrowers achieve their mission -- in this case, providing new employment opportunities and economic development to a low-income neighborhood in Houston.
"This project has the potential to transform a severely distressed community," said National New Markets Fund President Deborah La Franchi. "Our NMTC investment will help bring back high-wage, high-quality manufacturing jobs to Houston that were lost due to the closure of the Dreyer's Grand Ice Cream plant."
National New Markets Fund CEO Belden Hull Daniels added, "We are proud to play a role in developing the Aker BioMarine Manufacturing project not only for the jobs it will create, but also for the potential health benefits and sustainable harvesting methods of its products."
The project is located within a Texas Enterprise Zone, which means it is part of a program focused on creating jobs and reducing poverty in economically distressed areas of the state. It is estimated that the project will generate more than $65 million annually through direct, indirect and induced economic output.