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40–281 PDF 2007

FULL COMMITTEE FIELD HEARING ON

THE IMPACT OF NEW MARKET TAX CREDITS,

THE SBIC PROGRAM, AND 504 PROGRAM

ON URBAN COMMUNITIES

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF 

REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

APRIL 11, 2007

Serial Number 110-13

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

JUANITA MILLENDER-McDONALD, 

California 

WILLIAM JEFFERSON, Louisiana 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KEVIN FITZPATRICK, Minority Staff Director

STANDING SUBCOMMITTEES 

Subcommittee on Finance and Tax

MELISSA BEAN, Illinois, Chairwoman 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

DEAN HELLER, Nevada, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Contracting and Technology

BRUCE BRALEY, IOWA, Chairman 

WILLIAM JEFFERSON, Louisiana 

HENRY CUELLAR, Texas 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

JOE SESTAK, Pennsylvania 

DAVID DAVIS, Tennessee, Ranking 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma

(II) 

Subcommittee on Regulations, Health Care and Trade

CHARLES GONZA ́ LEZ, Texas, Chairman 

WILLIAM JEFFERSON, Louisiana 

RICK LARSEN, Washington 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

LYNN WESTMORELAND, Georgia, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

MARILYN MUSGRAVE, Colorado 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Urban and Rural Entrepreneurship

HEATH SHULER, North Carolina, Chairman 

RICK LARSEN, Washington 

MICHAEL MICHAUD, Maine 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JEFF FORTENBERRY, Nebraska, Ranking 

ROSCOE BARTLETT, Maryland 

MARILYN MUSGRAVE, Colorado 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee

Subcommittee on Investigations and Oversight

JASON ALTMIRE, PENNSYLVANIA, Chairman 

JUANITA MILLENDER-McDONALD, 

California 

CHARLIE GONZA ́ LEZ, Texas 

RAUL GRIJALVA, Arizona 

LOUIE GOHMERT, Texas, Ranking 

LYNN WESTMORELAND, Georgia

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1

Chabot, Hon. Steve .................................................................................................. 2

WITNESSES 

Muniz, Chad, 3CDC ................................................................................................. 4

Main, David K., Hamilton County Development Co., Inc. ................................... 7

Brown, Tony T., Uptown Consortium, Inc. ............................................................ 9

Oliver, Elizabeth, Shekinah Beauty Centers, Inc. ................................................ 13

Kirk, Guinette, DNK Architects ............................................................................. 14

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 28

Chabot, Hon. Steve .................................................................................................. 30

Main, David K., Hamilton County Development Co., Inc. ................................... 32

Brown, Tony T., Uptown Consortium, Inc. ............................................................ 36

Oliver, Elizabeth, Shekinah Beauty Centers, Inc. ................................................ 39

(V) 

(1)

FULL COMMITTEE FIELD HEARING ON 

THE IMPACT OF NEW MARKET TAX CREDITS, 

THE SBIC PROGRAM, AND 504 PROGRAM ON 

URBAN COMMUNITIES 

WEDNESDAY, APRIL 11, 2007

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Cincinnati, OH 

The Committee met, pursuant to call, at 10:12 a.m., at the 

Avondale Pride Center, 3520 Burnet Avenue, Cincinnati, Ohio, 

Hon. Nydia M. Vela ́zquez [Chairwoman of the Committee] presiding. 

Present: Representatives Vela ́zquez and Chabot. 

OPENING STATEMENT OF CHAIRWOMAN VELA ́ ZQUEZ 

Chairwoman VELA ́ ZQUEZ. The House Small Business Committee 

is called to order. First, I’m Congresswoman Nydia Vela ́zquez, 

Chair of the Small Business Committee. 

First, I want to thank each of you for being here today on a rainy 

day. For me, it has been quite a rewarding experience. This is the 

first time in four years that we do a Congressional field hearing. 

And I am very grateful to the ranking minority, Mr. Chabot, Congressman Steve Chabot, and his staff for putting this Congressional field hearing together. 

It is important for members of Congress to get out of the Beltway 

and come here and see how the legislation and the actions that we 

take in Washington have a direct impact in the lives of the community that we represent. 

And I am very impressed with what I have seen so far. There’s 

no question that it provides a different perspective. And as I said, 

I want to thank Mr. Chabot for this opportunity. 

Being from New York, I can certainly understand the challenges 

facing entrepreneurs in urban areas, like Cincinnati. Such obstacles, like the high cost of labor and advertising, skyrocketing energy costs, and competition, can all make it difficult for entrepreneurs to be successful. 

That being said, urban areas need a system when it comes to the 

growth and prosperity of small businesses. Creating incentives for 

people to invest in urban communities and enabling entrepreneurs 

to thrive is critical. 

While many areas may flourish when the country is experiencing 

economic growth, the truth is, not all communities benefit. For 

those places, the New Markets Tax Credit can be very helpful. 

2

The New Markets Tax Credit was created to make loans and 

capital investment opportunities in under-served areas. Most importantly, it provides an incentive for people to invest in urban 

markets, like Cincinnati, where urban revitalization is a top priority. This is not only benefit to small firms, but the community as 

a whole. 

While creating incentives for people to do business in urban markets is important, it is equally essential to ensure small businesses 

are receiving the financing tools they need. Entrepreneurs are the 

country’s economic drivers and job creators. However, accessing the 

capital they need to successfully grow a business is always challenging. 

This is where the Small Business Administration’s loan programs, such as the SBIC and the 504, step in to help small businesses and, therefore, communities. The Small Business Investment Company program was created to give small businesses access to the long-term capital required for growth. SBICs provide equity capital, long-term loans, debt equity investment, and management assistance to small businesses, particularly during their 

growth stage. 

The SBIC 504 program was also intended to spur economic 

growth in under-served areas. It provides long-term fixed rate financing to small businesses for land, buildings and machinery 

equipment. It has been known to stimulate small businesses, create 

jobs, and encourage investment in the community. 

With small firms creating three out of every four new jobs, and 

comprising over half of the nation’s gross domestic product, they 

can play a critical role in revitalizing urban communities. Clearly, 

the New Markets Tax Credit, SBIC, and the 504 Program can work 

to help in urban revitalization by stimulating job growth, investing 

in the community and entrepreneurs. 

Today we will hear from small business owners who have utilized this program, as well as local stakeholders. Again, I want to 

thank each one of you for coming to share your experiences with 

all these federal programs, and to Mr. Chabot and his staff for all 

the work that you put in putting this event together. So, thank 

you. And I now recognize Mr. Chabot for his opening statement 

and the introduction of the witnesses. 

OPENING STATEMENT OF MR. CHABOT 

Mr. CHABOT. Thank you, Madam Chairwoman. I want to, first of 

all, thank you—excuse me—for taking time out of your busy schedule in coming all the way from your district in New York to Cincinnati here to hold a field hearing of the Small Business Committee. I really do appreciate it. 

And I think we’re going to learn a lot this morning from some 

of the local folks that have been involved in small business programs and the loan programs with the New Markets Tax Credit 

and the 504 Program. So, the fact that you came all the way from 

your district here is most appreciated, not only by myself, but I 

think all the people of the First Congressional District in Cincinnati. 

I appreciate the opportunity, I think we all do, to show you at 

least a small part of how our community and how the New MarVerDate 0ct 09 2002 09:13 Jan 24, 2008 Jkt 033615 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40281.TXT LEANN
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kets Tax Credits and the Certified Development Company, the 504 

loan program that I referred to before, are helping these communities like Avondale and Over the Rhine, where we were just at 

earlier, and many other communities in Cincinnati. 

I also want to thank all our witnesses, not only for their testimony that they will be giving shortly, but for the important work 

that they are doing in our community, particularly in the Uptown 

and Over The Rhine areas. The New Markets Tax Credit, enacted 

as part of the community renewal Tax Relief Act of 2000, takes an 

innovative approach to address poverty by using the tax code to enlist the support of both, the public and private sector, making the 

program unique among federal economic development initiatives. 

The New Markets Tax Credit, a 39 percent credit against federal 

taxes over a seven-year period, has helped spur investment and 

economic development in under-served communities all over the 

country, and Cincinnati, as well. 

For example, the New Markets Tax Credit program is attracting 

a significant amount of private capital to the Uptown and Over The 

Rhine neighborhoods. 

All told, the New Markets Tax Credit is responsible for more than $100 million in private investments within the First Congressional District, and is providing momentum to spur redevelopment 

and job creation in some of Cincinnati’s most distressed neighbors. 

The New Markets program was extended for two more years last 

year, meaning the program will expire at the end of 2008, unless 

Congress takes action to renew it. And us being here is part of 

Congress seeing why we should renew that, because we’re seeing 

it here firsthand, how it’s helped Cincinnati. 

I happened to be a cosponsor of the legislation during the last 

Congress to renew the program for five more years. It’s my understanding that Representatives Ron Lewis of Kentucky and Charles 

Rangel from your area in New York, the chairman of the Ways and 

Means Committee, plan to introduce similar legislation in the near 

future. And I look forward to, once again, lending my support, and 

I’m sure that the chairwoman does, as well, to a bill to continue 

the New Markets program. And I’m hopeful that such a bill will 

become law. 

The New Markets Tax Credits are an important part of the community redevelopment and reinvestment, as is the Small Business 

Administration’s Certified Development Company program, also 

known as the 504 loan program. Certified Development Companies, 

or CDCs, such as David Main’s Horizon CDC, are invaluable resources for America’s small businesses. Every time a business 

owner receives a loan from a CDC, they are not only making a 

commitment to better their business, but also to improve their community by creating jobs and helping revitalize neighborhoods. 

This type of community investment is important, and it’s one of 

the reasons that renewing the CDC program is critical. As many 

of you may know, a number of us also co-authored legislation, 

along with the chairwoman and myself and Representative Melissa 

Bean, called the Small Business Lending Improvement Act of 2007. 

This important bipartisan bill would reauthorize and strengthen 

the CDC program to ensure that small business owners and communities around the country will continue to benefit from the abilVerDate 0ct 09 2002 09:13 Jan 24, 2008 Jkt 033615 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40281.TXT LEANN
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ity of small businesses to reinvest and grow their businesses. The 

Small Business Committee unanimously passed the Small Business 

Lending Improvement Act. I’m hopeful that the full House will consider it in the very near future. 

It’s important that small businesses take root in communities 

such as Avondale and Over The Rhine, and that small businesses—

after all, they’ve created 60 to 80 percent of American jobs over the 

last ten years. Think of that. 60 to 80 percent of the jobs created 

over the last ten years have been created by small businesses. And 

that’s something I think we should always recognize. They’re the 

backbone of our economy. 

We need to provide small business owners the opportunity to 

thrive in Avondale and Over The Rhine and throughout the country as a means to create jobs and strengthen communities and improve the local economy. 

I, again, want to thank the witnesses for taking their time that 

we’re going to be hearing from in the very near future here, and 

I want to thank you all for coming this morning. And, again, I 

want to thank the chairwoman for coming to Cincinnati and having 

this hearing this morning. I yield back my time. Thank you. With 

the chairwoman’s permission, I will now introduce—will introduce 

the panel, just the witness. And then he or she will testify. And 

then we’ll introduce the next one after they’ve testified. We’ll do 

them individually. 

We’ll start with Mr. Chad Munitz. Mr. Munitz joined the Cincinnati Center City Development Corporation, the 3CDC, in August 

2006, as the executive vice president for development, and manages 

3CDC’s development activities. Chad had previously led the City of 

Cincinnati’s Economic Development Department, serving as the 

primary point of contact with the city for developers and businesses 

promoting economic development projects. 

Prior to this role, Chad served as the assistant deputy director 

and the governor’s regional economic development representative 

at the Ohio Department of Development in Columbus, where he facilitated private sector expansion, retention, and relocation projects 

within Ohio. 

And before coming to Avondale for this hearing, the chairwoman 

and I had an opportunity, and some of our staff people, to meet 

with Chad and some of his people down in Over The Rhine, where 

he showed us some of the work that’s being done by 3CDC in the 

Over The Rhine area. And they are certainly doing some muchneeded work down there. So, Mr. Munitz, you’re recognized for five 

minutes, or approximately that. 

STATEMENT OF CHAD MUNITZ, EXECUTIVE VICE PRESIDENT 

FOR DEVELOPMENT, 3CDC 

Mr. MUNITZ. Thank you, Chairwoman and Congressman Chabot. 

Bear with us one second here. 

Mr. BROWN. I’ll blind you by the light. 

Mr. MUNITZ. While Tony is being gracious, thank you for helping 

me here get this focused a little bit, I’ll just start real quick with 

this first, just real quick to show you the background of 3CDC. 

3CDC, as the Congressman said, is the Cincinnati Center City 

Development Corporation. We’re a downtown development corporaVerDate 0ct 09 2002 09:13 Jan 24, 2008 Jkt 033615 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40281.TXT LEANN
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tion in Cincinnati that focuses on the neighborhoods: Over The 

Rhine, our central business district, and then also our riverfront. 

And we are truly led by our chairman, who is the President and 

CEO of Procter & Gamble, A.G. Lafley, but also the rest of the corporate community in the City of Cincinnati. 

Today I really want to talk about the effects that the New Markets Tax Credits have had on our development that we’ve been 

doing. Over The Rhine has been a historically disinvested community in the City of Cincinnati. It is only six blocks from the heart 

of our city, which is Fountain Square, in our central business district, where we have over 80,000 employees that work downtown 

every day. 

Over the last decade, there’s been disinvestment and the loss of 

over 40,000 residents in Over The Rhine. And over the last three 

years, since 3CDC has been formed, we’ve been acquiring parcels 

and property in Over The Rhine to look at doing reinvestment on 

a scale that actually has some momentum and starts to change the 

makeup of that community. 

We’ve only been able to do that thanks to the New Markets allocation that we received about four years ago. 3CDC was the recipient of a $50 million New Markets allocation. 

We have taken that directly to invest in property in Over The 

Rhine, but also to invest in our development efforts. 

What we toured this morning, I’m going to go through this real 

quickly here, we have about 93, just less than a hundred commercial—or condominium units that we have created in Over The 

Rhine in a four-block area, right at 12th and Vine, 22,000 square 

feet of commercial property. 

It’s really transformed that corner of 12th and Vine, something 

it hasn’t seen in decades. 

Just two years ago, before 3CDC started those efforts, there were 

over 270 police calls to that corner. And last year, since we have 

started construction, before the units had actually gone on-line, 

there’s only been four police calls to that neighborhood. So we’ve 

really turned this around, and it’s with the help of New Markets 

Tax Credits and small businesses. 

The four development teams that are developing this are all 

small business, and the actual contractors have all been small businesses who are doing these developments of the 93 units and the 

22,000 square feet of retail. But then, also, all the businesses that 

we’ve brought so far, we’ve sold about 40 percent of our commercial 

space, have also been young, small business entrepreneurs who are 

moving back into Over The Rhine. 

I really want to talk about, in a little bit more detail, the New 

Markets Tax Credit itself. We are one of the poorest rates of poverty—or highest rates of poverty anywhere in the country that has 

received the New Markets allocation. We have 68 percent poverty 

level in the census tracks that make up our allocation district, in 

the central business district and Over The Rhine. The median family income in that district is only 12 percent of the median family 

income of the entire City of Cincinnati, the metropolitan statistic 

area of Cincinnati. 

And Over The Rhine, for the last decade, has had less than a five 

percent home ownership rate, which is pretty hard to achieve. So 

6

we’re slowly doing that, and that’s why the bulk of our redevelopment has been focused on for-sale units. 

We really have, we feel, a unique New Markets program that we 

have set up here for the 3CDC. And what we’ve been able to do 

is, because of the investors in the program, we provide low-interest 

loans, we provide interest-free and interest-only periods. We really 

take most of the risk through our fund by having nonrecourse debt 

to our lenders, to the developers who are doing this. We do not require them to have any recourse. The only collateral on these buildings are the value of the buildings themselves, which are actually 

much less than the money we have loaned into them. 

That which—again, getting into that, a lower loan-to-value ratio 

that we lend out, and then being subordinated debt behind other 

debt that has come into this is really the flexibility of the New 

Markets program, and has allowed us to get out there and reinvest 

these at a much greater rate. And it’s also been an advantage for 

us to bring in the small businesses into the commercial section, but 

providing the tenant improvement allowance to them, and charging 

very low interest rates. 

3CDC is also taking advantage of the New Markets program by 

combining what we have of our staff of 3CDC and the Cincinnati 

Equity Fund to lower the administrative and overhead costs. So we 

pass very little cost on to the fund itself or to any of our borrowers. 

It also allows us to charge much lower than standard loan origination fees and consulting fees. 

And then, really quickly, which the Congress members saw this 

morning, but to show the rest of the audience here what we’re 

doing right at 12th and Vine with these new developments that 

we’re having, it’s about a $27 million development that’s had the 

$12.5 million in New Markets Tax Credits infused into that, the 

rest of the money coming from another loan fund that Cincinnati 

Center City Development Corporation has, and then also some 

grant funds from the City. 

As you can see, we’ve really taken some troubled properties and 

reformed them. This is right there on the corner where we have 

above it residential units for the art academy. There are dorm 

rooms above there. And below, which used to be the Bay Cafe, 

which was a very troubled carry-out, is now our sales center for the 

entire development. This is an actual unit that we walked through 

this morning. 

Most of these buildings that we have taken were vacant and really had squatters living in them. So we’ve taken these buildings, 

have had to clean them out and have had to remove all the lead 

and asbestos that was in those, and provide units for sale. 

Here, again, is just some more pictures of some of the dramatic 

changes from before and after that we’ve had in our units. 

That really concludes the bulk of our testimony. I just want to, 

once more, emphasize how important it is. People have been trying 

to redevelop Over The Rhine for decades in this city, and have really not been able to get the scale of development happening that 

changes communities and changes neighborhoods at a time. 

And if it was not for infusion of the New Markets Tax Credit, 

we would not be able to move forward with that, and, truly, the 

flexible terms of that, the generousness of the investors in the proVerDate 0ct 09 2002 09:13 Jan 24, 2008 Jkt 033615 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40281.TXT LEANN
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gram, that really just take the federal tax credit as a return on 

that investment. 

And, then, since I have the honor of being here in front of the 

committee, I would like to let you know, also, that we have a new 

allocation request in and we’re applying for another $75 million in 

tax-free allocations for this next round. So, thank you very much 

for allowing me to be here. 

Mr. CHABOT. Madam Chairwoman, I will introduce the next witness, if that’s okay. 

Chairwoman VELA ́ ZQUEZ. Fine. 

Mr. CHABOT. Thank you. Our next witness will be David Main, 

who is the President of Hamilton County Development Company, 

or Horizon Development. He actually started in 1983 at Hamilton 

County Development Company. 

While the SBA 504 loan program is HCDC’s flagship economic 

development lending activity, HCDC also administers the Ohio Regional 166 loan program, the Community Reinvestment Fund, the 

U.S.A. Loan Program, the Hamilton County Economic Development 

Office, and the Hamilton County Business Center, a 70,000-squarefoot incubator. 

Prior to joining HCDC, David served as a loan officer, staff attorney for Citywide Development Corporation in Dayton, Ohio; legal 

adviser for the Department of Community Development in Rockford, Illinois; and commenced his economic small business development career as the first economic development coordinator for the 

City of Xenia, Ohio. 

Earlier this year, David Main testified before the Small Business 

Committee in Washington, D.C., as he’s done, I believe, a few times 

prior to that. So, Mr. Main, you’re recognized for five minutes, also. 

STATEMENT OF DAVID K. MAIN, PRESIDENT/CEO, HAMILTON 

COUNTY DEVELOPMENT CO., INC. 

Mr. MAIN. Thank you. I would like to thank Chairperson 

Vela ́zquez and Ranking Member Chabot for providing me the opportunity to give remarks concerning the effects, role and positive 

benefits that the SBA 504 loan program plays in revitalizing urban 

communities. 

The 504 loan program is an economic development financing tool 

with the purpose of promoting small business capital investment as 

well as the creation of jobs and retention of jobs and employment 

opportunities. As such, it finances fixed assets, primarily real estate, though occasionally machinery and equipment, to facilitate 

the expansion of growing small businesses. 

One additional virtue of the 504 program is that it generates 

owner-occupied commercial real estate. Just as residential home 

ownership creates stakeholders who foster stability and commitment to local communities, business owner-occupied real estate 

also promotes, and perhaps on a greater role, stakeholder commitment and stability in such communities. 

HCDC has funded numerous projects located in urban core areas 

and inner-ring communities where small business concerns have 

acquired real estate through the 504 program, sometimes using our 

private lending partners and including New Markets Tax Credits, 

and investing, not only in the acquisition of real property, but more 

8

importantly in constructing improvements and renovations to this 

real estate, as well. In addition, these companies have added jobs 

and typically employed local residents from the community. The 

end result is an improved property with new commerce and business activity. 

There are some noteworthy examples within the City of Cincinnati and Hamilton County urban communities where small businesses, some formerly renters, have acquired and improved real estate through the 504 program. As a result, not only have their 

businesses flourished, but the surrounding areas have benefited, as 

well. 

One such example is Baba Budan Coffee House, owned by Tony 

Hamburg. Due to an urban renewal project that acquired the building he rented for his shop near the University of Cincinnati, Mr. 

Hamburg needed to find a new location for his business. HCDC, 

through the SBA 504 loan program, together with a local community-based private lender, helped Mr. Hamburg acquire and renovate a vacant former bar near the UC campus. As a result, not 

only has his business flourished with increased revenues, but also 

his investment has helped spawn additional redevelopment of and 

new private investment in the city block where Baba Budan is now 

located. 

In addition, HCDC, through the 504 loan program, also assisted 

the redevelopment of two brownfield sites, financed through the 

Clean Ohio Fund, within the inner-ring community of Lockland. 

These sites have not only been environmentally remediated, but 

more importantly returned to active productive commercial use as 

two more HCDC-financed 504 projects. Premier Food Management 

and Frederick’s Landscaping acquired these properties, constructed 

new buildings, and as a result, jobs and commerce have supplanted 

vacant brownfields. 

I would like to commend the committee leadership for getting HR 

1332, the Small Business Lending Improvement Act, approved and 

unanimously voted out of the Small Business Committee, particularly since there has not been a full program reauthorization for 

several years. I also look forward to working closely with the Senate to complete passage of this important legislation. 

HR 1332 represents one of the most far-reaching improvements 

for the SBA 504 loan program. However, there are certain changes 

which could improve 504’s impact on urban communities. One such 

change would be to reduce the required small business owner occupancy percentage requirement from 51 percent for existing buildings to 35 percent, and from 65 percent for new construction to 51 

percent within urban core communities. 

Within these urban areas, real estate frequently involves multistory facilities that may be too large a structure for many small 

business borrowers to occupy the 51 percent. Nevertheless, with 

ownership requirements reduced to at least 35 percent of the building, the balance could be rented out to other productive uses while 

the small business borrower would still serve as the owner-occupant anchor of the facility. 

From fiscal year 2001 through fiscal year 2006, HCDC increased 

its 504 loan approvals by 97 percent, going from 31 loans in 2001 

to 61 loans in 2006. Meanwhile, during the same period, the 504 

9

program nationally increased its loan approvals by 91 percent, 

going from 5,195 loans approved in 2001 to 9,942 loans approved 

during fiscal year 2006. Notwithstanding these increases, the SBA 

agency staff appears to have been cut to the point where its capacity to continue to effectively process 504 loans in future years, as 

the program continues to expand, is in jeopardy. 

One solution, in addition to adding additional personnel, would 

be for the SBA to establish a second 504 processing center, preferably in the eastern half of the United States, to handle this growing 504 loan processing activity. 

In addition to the HCDC 504 loan clients who are appearing 

today and the other above-mentioned 504 urban successes, there’s 

no doubt other examples of 504 loan activity throughout the country that provide tangible and lasting value regarding how the 504 

loan program assists small businesses to expand, invest, create 

jobs, and improve the overall quality of life in urban communities. 

Thank you for your support, and I would be willing to answer 

any questions. 

[The prepared statement of Mr. Main may be found in the Appendix, on page 32.]

Mr. CHABOT. Thank you very much, David. Our third witness 

here this morning will be Tony Brown. Tony has served as President and CEO of the Uptown Consortium since March of 2004, so 

about three years now. 

The Uptown Consortium is a nonprofit organization made up of 

uptown’s five largest employers: Cincinnati Children’s Hospital 

Medical Center, Cincinnati Zoo and Botanical Gardens, the Health 

Alliance of Greater Cincinnati, TriHealth, Inc., and the University 

of Cincinnati. 

Mr. Brown began his career in banking in 1982. From 2001 to 

March 2004, Mr. Brown served as the director of the Community 

Development Financial Institutions Fund, a government-owned corporation at the United States Department of Treasury, to which he 

was nominated by President Bush. 

Under his direction, the CDFI Fund made a significant contribution to creating jobs and stimulating economic growth in the nation’s low-income communities. Mr. Brown also successfully implemented the $15 billion New Markets Tax Credits program. And we 

welcome you here this morning, Mr. Brown. 

STATEMENT OF TONY T. BROWN, PRESIDENT/CEO, UPTOWN 

CONSORTIUM, INC. 

Mr. BROWN. Excuse me. I’m also coordinator of the AV equipment, too. 

Chairwoman Vela ́zquez, I would like to say welcome to Uptown 

Cincinnati. We are the premier cluster of neighborhoods in the 

First Congressional District of Ohio, and I’m sure Congressman 

Chabot would not challenge that. We’ll let him debate that on the 

west side. 

Mr. CHABOT. We love all the neighborhoods in our district. 

Mr. BROWN. Congressman Chabot, welcome home, and thank you 

for conducting an official U.S. Housing Small Business Committee 

field hearing to review economic development programs. As the inVerDate 0ct 09 2002 09:13 Jan 24, 2008 Jkt 033615 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40281.TXT LEANN
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troduction stated, I am Tony Brown. I’m president of the Uptown 

Consortium, and we appreciate the opportunity to testify before you 

today. 

Our organization is founded by four of the region’s top seven employers and the Cincinnati Zoo, which represents our region’s number one tourist attraction. The members of the Uptown Consortium 

employ over 50,000 people and provide an annual economic impact 

of $3 billion. 

The House Small Business Committee has chosen the perfect city 

to explore local efforts to revitalize neighborhoods using small business investment programs. As you have witnessed, our city, in just 

the First District of Ohio, have received over $100 million in New 

Markets Tax Credits that have provided the incentive for us to attract private capital to help revitalize economically distressed 

neighborhoods, as seen in Avondale and Over The Rhine. 

Similar to Chad, I would like to focus my comments around the 

New Markets Tax Credit program, as it has been the primary tool 

that we’re using to raise private capital. And, besides, it’s an economic development program that I know a little something about. 

As the Congressman indicated, in 2001, I was appointed by the 

president to direct the CDFI fund, and I served as director through 

February of 2003. During my tenure at the Fund, I personally supervised the regulations for the first $6 billion in New Markets Tax 

Credits allocated. 

The New Markets Tax Credits program was designed to stimulate investment and economic growth in low-income urban neighborhoods and rural communities by offering, as the Congressman 

highlighted, a seven-year 39 percent federal tax credit into investment vehicles known as Community Development Entities. These 

CDEs use capital derived from the tax credit to make loans to, or 

investments in, businesses and projects in low-income areas. So, for 

instance, a $1 million investment into a CDE would yield for that 

investor a federal tax credit of $390,000 over a seven-year period. 

The New Markets Tax Credit program was enacted in December 

of 2000 as part of the Community Renewal Tax Relief Act. The 

original authorizing legislation provided $15 billion in New Markets Tax Credits authority. As you know, 2008 is the last year that 

Congress has authorized New Markets Tax Credit authority. And 

legislation to reauthorize the program through 2013, I have been 

told, will actually be introduced next week in both, the House and 

the Senate. The House bill will be sponsored by Congressman Neal 

from Massachusetts, with additional support, as Congress Chabot 

said, from Ron Lewis from Kentucky. 

In Cincinnati alone, we know firsthand that this program works. 

We have been able to attract below-market sources of private capital as the patient source of funding we need to implement, in just 

the uptown area, a half a billion, $500 million redevelopment pipeline. If you simply look at the list of investors in the Uptown Partners Fund, we can attest that New Markets have met the purpose 

that Congress has intended it to be. It has attracted private capital 

in low-income communities. 

As you can also see from your tour, we have—we are just getting 

started. And to end this program now would have a devastating 

11

impact on our ability to raise capital in order to continue our efforts. 

Madam Chairwoman, Congressman Chabot, your field visit to 

conduct a bipartisan review of this program is commendable, and 

your efforts are to be applauded. Your presence here today clearly 

signals the importance of this program for the areas you represent. 

In Ohio, for instance, on a per capita basis, Ohio has truly benefited from this program as 14 Community Development Entities 

have been awarded in excess of $647 million. And in New York, 17 

Community Development Entities have been awarded well over 

$1.7 billion. The U.S. Department of Treasury reports that the New 

Markets Tax Credits program has accounted for an investment of 

nearly $8 billion in low-income communities to date. 

I’m going to take a moment here, again, similar to what Chad 

has done, to talk about how we’re using the New Markets Tax 

Credits program to stimulate the type of economic revitalization of 

Burnet Avenue. Again, we thank you for the tour. Our focus has 

been on Burnet Avenue, as well as a number of other communities, 

but we’re going to illustrate how we’re using New Markets Tax 

Credits to stimulate the revitalization of what has been an historic 

African-American business district. 

We started two and a half years ago working with the Avondale 

Community Council to come up with a vision for the new Burnet 

Avenue north of Erkenbrecher. And from that plan, the vision resulted in stimulating 330 new workforce housing units and being 

a catalyst to invest in over 300,000 square feet of office retail 

space. Clearly, that is not how Burnet Avenue looked today, but we 

welcome you back in five years, and we’re sure to show you that 

that’s what it will look like in the next decade. 

The New Markets Tax Credits program and the investors in the Uptown Partners Fund have allowed us to take $25 million to become the single-largest property owner on Burnet Avenue north of 

Erkenbrecher between Forest and Harvey Avenue. But for New 

Markets Tax Credits, we could not have assembled this land, which 

makes us, if you combine the efforts of 3CDC, clearly, the largest 

privately-funded urban renewal effort focusing on neighborhood development in the country. 

We are investing in the transformation of Burnet Avenue. Our 

first project is allowing an African-American-owned business to 

build and construct a 45,000 square-foot office building. The Cincinnati Herald is our region’s premier publication of African-American news and culture. Through the efforts of The Cincinnati Herald, several years ago, they went to Children’s Hospital and said, 

we need to clean up Burnet Avenue. Will you help us do a 5,000-

square-foot office building? Well, that 5,000-square-foot office building has turned into a 45,000-square-foot office building. 

Through the New Markets Tax Credits program, we are in partnership with the owners of Sesh Communications to construct and 

build the Cincinnati Herald building. The Uptown Cincinnati Development Fund is providing a mezzanine loan that has allowed 

the developer to get the senior loan in order to construct the $7 

million facility. 

Cincinnati Children’s Hospital is committed to expand and to 

bring more employees and pedestrians on the streets, and will 

12

build a parking garage to support the additional office space that’s 

needed to make this activity happen. The leadership of the 

Avondale community was quite clear. The revitalization of Burnet 

Avenue has to be more than providing expansion for the hospitals. 

The residents must benefit. 

Along with this plan and this whole new design of urbanism is 

to wrap the parking garage with new workforce housing. We have 

assembled the entire site to start the first phase of 60 units of new 

workforce housing, and equally proud, you will hear from another 

witness, from Guin, that the design team is an African-Americanowned business. 

And then, as we jump the blocks, the second phase is where you 

are now. As the community has indicated, this has to be about 

transformation and empowerment, that we need to restore the vitality of a business district that benefits African-American businesses. 

Steve Love, president of the African-American Chamber of Commerce, he and I just recently returned from a conference on smallbusiness incubators to learn more about how we can utilize smallbusiness incubators to be a catalyst to attract small businesses, minority businesses in this section of Burnet Avenue. 

If you look through those doors, you will see a red ribbon on the 

bus stop where a lady, innocently standing waiting for a bus, was 

shot by an errant bullet. The Cincinnati Police Department would 

consider this block to be one of its hot spots. We know that any revitalization must transform and create a vision for community accountability and wealth creation. 

As we look at the acquisition of the real estate, we know we have 

to come back with programs working in partnership with the 

Avondale Community Council, with the African-American Chamber 

of Commerce, with the Cincinnati Empowerment Corporation, to 

find ways to create small businesses, look at small-business incubators, increase the level of goods and services to the residents in this 

area, create an environment where the employees in our billion dollar institutions are welcome to stop and shop. And we’re going to 

do that in partnership with the Avondale Community Council, and 

then we’re going to do it in a way in working with our communities 

so that individuals who are now renters, can also be homeowners. 

Again, I would like to thank you for the opportunity to testify. 

The Uptown Consortium expresses our deepest appreciation for the 

leadership of the House Small Business Committee in making a bipartisan effort and exploring local efforts to revitalize neighborhoods using small-business investments. 

All indications are that the New Markets Tax Credits program 

is working. The program has been the catalyst to date of nearly $8 

billion in low-income communities. And over 200 CDEs across the 

country are using the credit to support a wide variety of community and economic development initiatives. We thank you for taking 

a firsthand look at this program and in aiding Cincinnati’s redevelopment. 

We know that you both are champions in supporting the growth 

of small and minority-owned businesses and ensuring economic opportunity for the working class and poor. As leaders in Congress, 

we hope you will succeed in getting other members to join you in 

13

passing a five-year extension of the New Markets Tax Credits program. Thank you. 

[The prepared statement of Mr. Brown may be found in the Appendix, on page 36.] 

Mr. CHABOT. Thank you very much, Mr. Brown. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Mr. CHABOT. Thank you. Our next witness, our fourth witness, 

will be Elizabeth Oliver, who is the owner of the—is it pronounced 

Shekinah. 

Ms. OLIVER. Shekinah. 

Mr. CHABOT. Shekinah. Shekinah Beauty Center, Inc. She’s a 

graduate of Moore University with a certificate in cosmetology in 

1982. She spent 15 years cultivating her skill sets so that she could 

catapult into a career as a salon owner. She opened her own salon 

in 1997, leasing space in Sycamore Township. 

Understanding the importance of real estate ownership, Elizabeth Oliver purchased her existing property in 2002. 

She is the owner/operator of the Shekinah Beauty Center, a fullservice salon and spa. She provides individualized consultation and 

spa services to individuals of all socioeconomic levels, and we’re 

happy to have you testify on how this has influenced your business 

and made it possible for you to prosper. You’re recognized. 

Ms. OLIVER. Good morning. 

Mr. CHABOT. Good morning. If you could speak up. I’m not sure 

if that mic is on. Yes, it is. 

STATEMENT OF ELIZABETH OLIVER, PRESIDENT, SHEKINAH 

BEAUTY CENTERS, INC. 

Ms. OLIVER. Good morning. My name is Elizabeth Oliver. I am 

the President of Shekinah Beauty Centers, Inc. I am here today to 

speak on behalf of the SBA 504 program. Being a small-business 

owner and being considered, at the time, as self-employed, most 

traditional lenders did not extend the opportunity with ease for 

ownership. I am very grateful for the program because it has proven to be designed for small businesses that are trying to build 

wealth in real estate. 

With the beauty industry being a multibillion dollar industry, 90 

percent of the business owners lease the space that their businesses are functioning out of. But I am pleased to be amongst the 

10 percent that have ownership. 

The SBA program has been excellent for me from the start to the 

finish. The loan officer, Angela Howard, was very knowledgeable 

with the program and assisted me with the SBA process, as well 

as getting a local bank to collaborate with us for the main portion 

of the loan. 

With lower down payments and fixed interest rates, that I could 

not have found in traditional lending, the alternative funding of the 

SBA 504 program has enabled me to expand my business and create a vineyard for other small businesses to operate within our 

business while maintaining their own business identity. I don’t 

think this would have been possible without the assistance of the 

SBA program. 

My husband and I have another business venture operating 

within the same building, and we hope to expand both businesses, 

14

and pray that we’ll have the opportunity to use the SBA program 

once again. Thank you. 

[The prepared statement of Ms. Oliver may be found in the Appendix, on page 39.] 

Mr. CHABOT. Thank you very much. I appreciate your testimony 

here this morning. And our fifth and final witness here this morning on the panel is Guinette Kirk, Vice President of Business Development, DNK Architects. Guinette Kirk received her undergraduate degree from Howard University in 1978, majoring in psychology. She received her M.B.A. in 1980 from Ohio State University. She has worked previously for Shillito’s, Federated, as an assistant buyer from 1981 to ’82; the Drackett Company, as assistant 

product manager, from ’84 to ’90; and Totes, as product manager, 

in 1994. 

Guinette assumed the position of vice president and business development officer with DNK Architects in 1994. 

DNK was formed by Ms. Kirk’s husband, David, in 1986. The 

company provides architectural and building code consulting services to clients and design professionals, and we welcome you here 

this morning, Ms. Kirk, and thank you for your testimony. 

STATEMENT OF GUINETTE KIRK, VICE PRESIDENT OF 

BUSINESS DEVELOPMENT, DNK ARCHITECTS 

Ms. KIRK. Thank you. Good morning. As was stated previously, 

I’m Guinette Kirk, and I’m Vice President of Business Development 

for DNK Architects. As you already know, we are a Cincinnatibased firm specializing in architecture, interior urban and landscape design. We’ve been practicing since 1986, and we have 18 

employees servicing the Tri-State area. 

We provide services to the public and private sectors, and our clients include such companies as the Health Alliance, Procter & 

Gamble, the Uptown Consortium, Children’s Hospital—Cincinnati 

Children’s Hospital Medical Center, Cincinnati Public Schools, the 

Dayton Public Schools, and the General Services Administration. 

A few of our completed local projects include the Lincoln Court 

Senior Citizens building, which was part of the Hope 6 project; the 

new Lindner YMCA in the West End; Gateway Condominiums in 

downtown. This was one of the projects that was previously shared 

with you through the PowerPoint with Mr. Munitz. Woodlawn Elementary School in the Princeton School District; the Hamilton 

County Community Action Agency headquarters; and we also provided all the modifications to the old Cinergy stadium that were required before the new Reds ballpark was built. In addition, we 

were the master architects in association with URS for the Cincinnati Public Schools $1 billion rebuilding program. 

Currently, we are working with the Uptown Consortium here in 

the Avondale area, and you recently toured that site. We’re working on revitalizing the Burnet Avenue area. Our work with the 

Consortium, Tony Brown and his staff includes improvements in 

the right-of-ways, site developments, housing, offices, and new retail. 

Approximately six years ago, we were introduced to the SBA 504 

loan program by Angela Howard, a loan officer of Horizon Certified 

Development Company, which was formerly the HCDC. She knew 

15

that we were looking to—for a new office space for our business. 

By using the 504 program, we were able to purchase a 6,400-

square-foot building, renovate it, and relocate our business to the 

Clifton Heights area in 2001. 

The 504 loan program afforded us a fixed rate of interest, lower 

capital outlay, and a longer loan term. All of these factors contributed to us being able to control both, our initial capital outlay and 

our ongoing expenses. 

We were also able to increase staff and thus add to the City of 

Cincinnati’s tax base. 

In summary, we would highly recommend this loan program to 

other, not just minority, but other business owners here in Cincinnati. And I would like to thank you, Congressman Chabot and 

Congresswoman Vela ́zquez, for this opportunity to provide our testimony. 

Mr. CHABOT. Thank you very much. 

Chairwoman VELA ́ ZQUEZ. All right. Thank you very much. This 

has been quite—not only informative, but for me to come here and 

see, firsthand, the impact. And I wish that I was here many years 

ago, but I know that from this point on, I could come here, back 

here five years from now, and see the positive impact that these 

federal programs are having in our communities. 

The fact of the matter is that the ranking member and myself, 

and the Small Business Committee members, the Small Business 

Committee, will be working on revamping and retooling some of 

the programs on their SBA. And we’re going to be working on the 

revitalization of the statute of the Small Business Administration. 

So, this provides a great wealth of information that we can use. 

Let me address my first question to Mr. Brown and Mr. Munitz. 

One of the obstacles to getting more investment as part of the New 

Markets Tax Credit program has been the complexity of the program. In a recent General Accounting Office report, it discussed 

how investors are concerned about the structure in which the tax 

credit is awarded. The investor also wants more flexibility in the 

ways they can make investments in these CDEs. Has this complexity discouraged you or other potential investors from using the 

New Markets Tax Credit program? 

Mr. BROWN. As I look back at our banking community, clearly, 

this is a very complicated program. It’s a tax credit program, and 

there are conflicting regulations. There is the community development impact that Congress intended for the program to have, and 

yet there are 45D rules under the IRS statute that governs tax 

shelter types of rules to make sure that the benefit of the program 

benefits the public, they have a public policy benefit, and that it 

just doesn’t enrich the investors. 

We have found, in the way in which we’ve used our New Markets 

Tax Credit program, that we’ve had to get legal opinions and get 

our bank partners comfortable in utilizing New Markets Tax Credits to do land banking. And when you’re doing land banking in a 

manner that doesn’t provide an immediate source of repayment, 

then you can’t just accrue that interest and repayment for year in/

year out. 

And I could go into a lot more examples, but in summary, the 

New Markets Tax Credit Coalition, as well as other industry assoVerDate 0ct 09 2002 09:13 Jan 24, 2008 Jkt 033615 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40281.TXT LEANN
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ciations, are working with the IRS and members of Congress to try 

to simplify in instances where conflicting tax codes impact how the 

program is used and its appetite for the investment community. 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. Munitz. 

Mr. MUNITZ. Madam Chairwoman, I really echo a lot of what 

Tony has said. We were blessed a little bit differently than most, 

the majority of our investors in our fund, or for-profit corporations, 

but our banking investors are experiencing a lot of the similar 

problems with the complexity of the codes for the actual New Markets Tax Credits and then the IRS codes to claim the credits themselves. So, from that standpoint, it does get very complex. 

I think on the other side that you mentioned briefly, what kind 

of projects you can invest the funds in, I think those are doing very 

well for us. And from 3CDC’s standpoint, we wouldn’t want to see 

much change in that. It helps, we feel, keep us competitive, that 

we’re truly investing these funds in the neighborhoods and the 

projects that need them the most in this country, and not some 

other things that could just benefit from additional return from the 

federal government. 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. Brown, some critics of 

the program point out that the New Markets Tax Credit doesn’t do 

enough to attract new investment. They argue that it simply shifts 

investment. I was wondering if anyone could speak to the issue of 

how the program has encouraged investors to put money into these 

CDEs, that they may not have invested if the New Markets Tax 

Credit did not exist. 

Mr. BROWN. And I think that’s an excellent question. 

The Uptown Partners Fund is a tremendous example. I mean, 

you have five nonprofit employers who are investing in the New 

Markets Tax Credit program: The University of Cincinnati, Cincinnati Children’s Hospital, Health Alliance, and the Cincinnati 

Zoo, I better not forget TriHealth. And it is uncommon for 3CDC, 

Procter & Gamble, Federated, it is sort of uncommon for these corporate entities to invest in community development programs. 

Because of the Community Reinvestment Act, it is not uncommon for our financial institutions to do it. I think that the program 

has attracted new investors. It has attracted investment bankers 

who do not have to comply with the New Markets Tax Credit program. It has attracted insurance companies who don’t have to comply with the Community Reinvestment Act. I’m sorry. And so it has 

attracted other nontraditional community development investors. 

At the Fund, before I left, the administration allowed me to invest in what’s called the Community Investment Impact System, 

CIIS. So now the CFI Fund has the ability to attract and to report 

to members of Congress: Who are the investors? Are they uncommon? And even heretofore, the inquiry I used to get when I testified before members of Congress, the Fund could not tell you in 

which census tracts investments were being made. 

Now with CIIS, and the GAO has reported they have the capability to slice and dice the information the way in which the members of Congress want to see it. So I think you will find, if you pose 

this question to the U.S. Department of Treasury, they have the capability to answer it. 

17

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. Main, the 504 program 

is unique in its focus on local economic development and relies on 

CDCs to carry out this mission. How does the program focus on the 

local community, and in particular the CDC’s role benefit business. 

Mr. MAIN. As economic development agencies, and I can speak 

primarily to HCDC, we do more than just package loans. We try 

to give back to the community. We took—we developed a business 

incubator. When we lost a General Motors assembly plant back in 

the mid-’80s, rather than—we felt that the rational response was 

through developing entrepreneurs, and we developed the business 

incubator. 

What the 504 program has provided us, though, is somewhat of 

a culture, where we have to get projects completed. We have to get 

loans approved, we have to get them funded, and they have to 

repay. So that’s kind of developed a culture, as such. 

We’ve also been able to take that as economic development, financiers, and put it in other projects. We, in addition to the 504s, 

as I mentioned, we have the state Regional 166, but what’s more 

importantly, we also have a program through what’s called CRF 

USA, which has New Markets Tax Credits, and it goes beyond 504. 

We cannot do non-profits with CRF USA. We can finance non-profits. We have financed some condominiums in Over The Rhine with 

non-profits, primarily commercial. We are just one example. 

There’s other CDCs, Certified Development Companies, throughout 

the country that provide other types of community benefits and 

support. 

Chairwoman VELA ́ ZQUEZ. The 504 loans are fixed rate and tend 

to be longer term than other financing alternatives. Is it these 

characteristics that have made the 504 program more attractive to 

local communities or local businesses. 

Mr. MAIN. I think it’s a couple things. One is the fixed rate. Currently, we have rates at 6.29 percent, so it is below market. It’s the 

fixed rate, it’s the low down payment. As a rule, it can be as little 

as 10 percent down. 

I think the other thing, and it was mentioned by several of the 

witnesses, it’s also the loan officers will work with entrepreneurs 

in, not only the 504 piece, but also putting them in touch with a 

bank and working them through the process. So I think, in addition to the fixed rate, the low down payment, I think it’s also the—

and not just here, but other CDCs, they work with the businesses 

in getting the financing through. 

Chairwoman VELA ́ ZQUEZ. Okay. Mr. Munitz, Mr. Brown, can you 

talk to me about how—or have you had any type of mechanisms 

that will prevent commercial gentrification or tenant gentrification? 

And so far, have you seen any of these trends happening. 

Mr. MUNITZ. Madam Chairwoman, it’s something that we’ve 

taken very seriously at 3CDC as we’re working in Over The Rhine. 

What we have been doing is partnering with some of the social 

service agencies, the community agencies in Over The Rhine, to ensure that that doesn’t happen. 

One of the things that has been nice about what we’ve been 

doing is there have been such an enormous amount of vacant buildings and properties, that we are not actually pushing anybody out 

of buildings as we go in to redevelop them. 

18

The other thing, as we’re moving along and trying to do this, is 

we showed our goal is to put 100 for-sale condominiums on the 

market each year for the next five years. We’re also working with 

some of the low-income housing providers and the social service 

agencies to make sure that they keep pace with this, because this 

year we developed 93 for-sale condominiums. There’s also been 80 

affordable units that have come on-line that are new to the community. 

So, we want to try to bring both up together. And the only way 

that these investments are going to make it in the long run is to 

keep the heritage in Over The Rhine, which is a true mixed-use, 

mixed-income neighborhood. 

Mr. BROWN. Madam Chair, you hit on what is a critical issue for 

us in our town. I think the issue of commercial gentrification—I’ll 

address it from the standpoint, in the Uptown area, as you witnessed, you have four of the region’s—actually three of the region’s 

top employers sharing the same headquarter blocks. The issues 

that we’ve had historically in the Uptown area has been how our 

institutions have expanded into the neighborhoods. And, historically, they have not done it very smart. 

And so the Uptown Consortium was formed by them to do landuse planning in a better way. I think the Burnet Avenue revitalization plan is a way in which we can be transparent about the need 

to expand the campus for Children’s Hospital, for instance, to provide parking and to provide offices, but to utilize new urbanism 

techniques that it can also be the catalyst for neighborhood revitalization. 

The University of Cincinnati, if we were doing this hearing in 

Clifton Heights, would be an example of how they were able to 

transform the campus and create Varsity Village and give their 

nonprofit partners air rights on top of their parking garage in order 

to stimulate the Clifton Heights business district. 

So, commercial gentrification, particularly in the Uptown area, 

and I probably shouldn’t use the word ′′gentrification,′′ but I would 

say land-use planning in the Uptown area, how this city balances 

its job base and the need to grow that job base without having an 

adverse impact in the neighborhoods, is something that we have to 

balance, it has to be comprehensive, and we have to plan for it. 

The issue of the residential impact is the same thing. I think our 

planning has to be done in a way that provides a balanced mix of 

housing. This city, second to Detroit, has lost more population than 

any other city in America. And so what we do together to provide 

the housing stock, the quality of life in our neighborhoods in a way 

that make it attractive for folks to want to live and play. 

I mentioned the consortium has 50,000 employees. Less than five 

percent live in the uptown neighborhood. So, though we have a captive audience, as we’ve surveyed those employees, we know what 

the negative attributes are as it deals with safety and the quality 

of public education. So, those are other factors that deal with, how 

do we create a quality of life that makes our neighborhoods communities of choice, and not areas where you avoid. 

Chairwoman VELA ́ ZQUEZ. Thank you. I will now recognize Ranking Member, Mr. Steve Chabot, for his questions. 

19

Mr. CHABOT. Thank you, Madam Chair. Let me, again, thank 

you for holding this hearing here. And I want to thank all the witnesses for their excellent testimony. 

And because of time constraints, we obviously have to limit our 

number of witnesses in a hearing such as this, we would do the 

same thing if we were in Washington now, to a relatively small 

number of people. 

But we have quite a few people here who have an interest in 

small business or who have an expertise, a whole range of people. 

And I recognize an awful lot of people out there that really could 

very easily have been one of the people who would be testifying 

here, and might have things to contribute. 

So, what I would suggest is, if there are things which we didn’t 

have an opportunity to cover this morning, or ideas that people 

might have, if you want to contact our office, if you can do it in 

writing, that would be the best thing, or e-mail us or something, 

I can make sure that I provide a copy to the chairwoman and to 

other members of the committee when we get back to Washington. 

We have staff, as well. 

So, if you have questions or comments or suggestions, please feel 

free to contact us. We can follow up with you and have a back-andforth, and maybe—or perhaps we have some small-business folks 

here who are thinking about, you know, applying for a particular 

loan. If you get in touch with us, we can get in touch with the SBA 

local folks here, as well. They are also ably represented today. So, 

I just wanted to start off by saying that. 

My first question is: Back in February of 2007, there was a GAO, 

General—the Government Accounting Office report that came out, 

and it was released, and it said that substantial investments were 

made in low-income communities that would not have occurred 

without the New Markets Tax Credits. And, in fact, 88 percent of 

investors said that they would not have made their investment 

without the New Markets Tax Credit. 

I wanted to ask these three gentlemen, first of all, and especially 

with respect to Over The Rhine and Avondale, is that what you 

have found to be the case here? Is this, the improvements that we 

either have already seen, for example, in Over The Rhine, or the 

ones that we see on the horizon, especially here in Avondale, are 

these things that wouldn’t have happened without the New Markets Tax Credits. 

And, obviously, the information that we take back are things 

that we’re talking about reauthorizing this program for years to 

come, but it’s something that we will take into consideration. So, 

what’s been your experience here? 

Mr. MUNITZ. Madam Chairwoman, Congressman Chabot, I 

couldn’t agree with you more. It’s been, really, from 3CDC’s standpoint, the single most important thing to allow us to move forward 

in redeveloping Over The Rhine. It’s a neighborhood that people 

have had many starts and stops over the last several decades to 

try to get redevelopment to occur. 

And the way that the New Markets Tax Credit program is set 

up, and our investors, who would never invest that money were it 

not for the credit that the government is giving them, and allowing 

them to keep their equity invested for seven years during that 

20

term, until the product can perform on its own, to come out with 

a conventional lender to finance that, it’s been—I can’t even begin 

to state how valuable that has been. 

Also, allowing us to be flexible to create terms that bring those 

investments in, where we’re really taking, as I said, low loan-tovalue ratios of our loans, very low collateral that we take, allowing 

the developers to go in without any risk, no direct security from the 

developers. 

So, if it were not for this program, we would not be able to move 

forward in the scale that you need to to make true urban redevelopment in this day in these communities. 

Mr. BROWN. And I just would echo what Chad has said. I think, 

simply put, what the New Markets Tax Credit Program has done 

is, it has allowed your corporate partner that would have looked at 

making a contribution for a community development activity, and 

to know that it’s limited because it has an impact on the income 

statement, to take a look at its balance sheet. 

Because the tax credit, you know, 39 percent over five years 

sounds like it’s a huge tax credit, but what it does for the investor, 

it’s about a five percent return. So, it allows Chad to talk to Procter 

& Gamble or it allows us to talk to our investors to say, instead 

of putting that money into a U.S. Treasury or money market, invest in this tax credit program and then we can give you community impact. 

So, whether or not there is an economic return on the investment, the tax credit return itself, and the social impact provides a 

tremendous opportunity to bring private capital to work in low-income communities. So, if you look at it from that standpoint, that 

is what’s been the stimulus of being able to attract this, these private dollars. 

Mr. CHABOT. Thank you. Could you discuss briefly, when you 

have investments like we’ve been talking about here this morning, 

the types of jobs that can be available to folks that actually live in 

the communities. 

What types of jobs are we talking about? What impact on the 

community? That’s my first question. 

And the second question, you mentioned, in the one slide, that 

there was a random shooting relatively close to here. And as we all 

know, Cincinnati had its highest homicide rate last year in the 

city’s history. What type—you know, if we’re successful in redeveloping some of Cincinnati’s most disadvantaged communities over 

the next number of years, what impact should that have on crime, 

you know, connected with the job development? And to some degree, it’s a chicken-and-egg thing because, you know, if you’re able 

to have more development and more jobs for people, one would 

think it reasonable that crime would come down. 

Now, the other side of that is, if it’s a high-crime area, people 

don’t necessarily want to invest in that neighborhood, because 

they’re afraid that they won’t get a return on their dollar. It may 

not be safe for their customers or their employees or themselves. 

So, if you could address that relationship, as well. 

Mr. BROWN. The allocatee for the Uptown Partners Fund is the 

Cincinnati Development Fund, and one of the nation’s best community development financial institutions. And I can say that with auVerDate 0ct 09 2002 09:13 Jan 24, 2008 Jkt 033615 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40281.TXT LEANN
21

thority, having managed them or invested in them all. And, quite 

frankly, but for the Cincinnati Development Fund, I don’t think we 

would have been successful in the uptown area, because we wrote 

their track record. 

As a result, they have an obligation to report to the U.S. Department of Treasury the types of jobs that are created from their investments. And we know, through the allocation agreement, that 

we’ll have to report the types of jobs created from the construction 

activity, and in this case, the types of real estate. 

In our case, we’re investing in office and retail types of jobs. You 

have seen on Burnet Avenue, if you had been here just six months 

ago, a lot of vacant commercial space. 

If we’re successful in constructing 300,000 square foot of office retail, we estimate that that should create and retain nearly 2,000 

jobs. 

The issue of—now, how does tax credits get allocated in areas 

that need it most? In our allocation, we said we’re only going to 

focus in low-income areas that, by federal definition, meets the criteria of being economically distressed. And so there are low-income 

communities, as you know, across the country that are in vibrant 

central business districts that qualify for the program. 

But, as you can see, in the uptown area and in Over The Rhine, 

low rates of home ownership, high rates of poverty, and we are trying very hard to make sure that our program has a neighborhood 

benefit, that it benefits our neighborhood business districts, and 

that our focus is that it increase the rate of home ownership. Cincinnati has a very low home ownership rate. In the uptown area 

alone, we only have a 20 percent home ownership rate. 

So, as we use the programs to buy real estate—and as I said on 

the walking tour, it can’t be a small plan. It has to be bold, and 

that we know that we have to deal with the perception of our market, whether crime is real or perceived in their mind. A lot of it 

is perceived. And we’re doing everything we can in working with 

the Cincinnati Police Department, in the types of investments we 

make and the way that we deploy the New Markets Tax Credits, 

to create a new environment that then makes it attractive for folks 

who want to live and buy. And it’s a challenge, but it’s one in 

which we prioritize how we deploy our dollars. 

Mr. CHABOT. Does that pretty much cover it, Chad. 

Mr. MUNITZ. It does. Just to add, it’s a very important thing, and 

I think both of our organizations are committed to this. It starts 

from the beginning of using—it’s not just at the end. Once the development happens, in having those new residents and the people 

working there be from low and moderate income, but also the work 

to create the development, we’re both very committed to using 

small minority businesses to get that. So, from the very beginning, 

the investment occurs, we’re helping out those areas. 

Mr. CHABOT. Thank you. Madam Chair, do I have time for one 

more question. 

Chairwoman VELA ́ ZQUEZ. Oh, sure. 

Mr. CHABOT. Okay. Thank you. If I could address the question 

to Ms. Oliver and Ms. Kirk and David, you, as well. Now, you all 

have benefited from the loan program in order to either start up 

22

or expand your business thus far. And, David, you kind of oversee 

that type of thing. 

Are there any things that you’ve seen in the program that would 

make it more user-friendly or easier for those that are starting up 

a small business or trying to grow it, any kind of roadblocks or 

things that you think should be a bit easier than it is, that makes 

it difficult, any changes that you would suggest in the program. 

Ms. KIRK. I’ll go first. We started in 2001, as I said. And, honestly, our process went so smooth, and I credit a lot of that to Angela Howard. 

Mr. CHABOT. Good job, Ms. Howard. 

Ms. KIRK. Because she—we developed a relationship with Angela 

from the previous banking relationship, and then she knew us, and 

knew that this was something that would help us. So, I would say 

just that relationship building, but honestly, we didn’t have one 

hiccup, not one. 

Mr. CHABOT. Ms. Oliver. 

Ms. OLIVER. Yes, I’ll echo that, because Angela, she was so—she 

was just excellent. She was very knowledgeable of the program. 

And anything that I had a question about, she was readily available. And she—the process was just complete. So, there’s nothing 

that I can think of. 

Mr. CHABOT. Excellent. Thank you. David, having dealt with 

probably many different—I’m very happy that these two are very 

satisfied. I’m glad it went well. 

Mr. MAIN. So am I. 

Mr. CHABOT. Are there—you know, we’ve discussed this in the 

past. Are there any suggestions that you would make or that could 

improve or make it a little easier or more user-friendly. 

Mr. MAIN. I think I mentioned it in the testimony. One of the 

issues has been, the agency has been pretty much cut to the bone, 

to the point where I don’t know how much more they can cut as 

far as staffing. They need to update the SOP. 

We were quite satisfied when we ran local processing through 

the Cincinnati office and Ron Carlson in Columbus. While I understand the need for improvement in that, there are times where we 

have found that Sacramento has not been as user-friendly. There 

have been issues as far as appraisals, there’s been—one of the biggest issues is land contracts. 

Now, it’s not an issue out in the western part of the country. But 

for years in the Midwest, in Ohio, in Michigan, in Minnesota, if you 

have a land contract, someone comes in, they’re not creditworthy 

for whatever reason, they cannot get conventional financing, they 

purchase property on a land contract. Equity title doesn’t transfer. 

And we have taken out land contracts with 504 programs. 

Well, as it turns out, for some reason, Sacramento is telling us 

no. There is no real rationale behind it other than saying, well, we 

don’t think it should apply. I think, with additional staffing, they 

could update the SOP. If we know the rules of the game, we can 

play them, but that’s just one example. 

And as I mentioned, perhaps an eastern processing center for 

504 loans. I’m concerned that the next great quake comes out in 

California, or they lose power, what happens to the process? Because this is one area. Whereas if we had a second one—Cincinnati 

23

would be a great place for an eastern 504 processing center, I’m 

sure New York would be, just as well—that we could balance 

things. But I—and I think, with updating the SOP and looking at 

some issues on appraisals and that, that could improve the program. 

Mr. CHABOT. Thank you very much. I yield back my time. 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. Main, if the 504 program did not serve the Cincinnati community, where would local 

businesses turn for long-term financing, low-cost financing? 

Mr. MAIN. It doesn’t exist. 

Chairwoman VELA ́ ZQUEZ. And can you tell me if there are more 

and more businesses turning to the 504 program. 

Mr. MAIN. We’ve seen our volume increase over the last six 

years. We approved 31 loans back in 2001. We approved 61 last 

year. Hopefully, we’re on track to do more this year. And it’s a matter—the economy has somewhat slowed down in Ohio, and I noticed in Michigan, as well, but we seem to be pretty much holding 

our own. 

There is really no other alternative. The banks, typically, they 

may take a longer-term amortization, maybe about 20 or 25 years, 

but they are going to have maybe a five-year balloon or they’re 

going to have—they’re going to want to adjust the interest rate 

after five years. The 504 program, as far as I’m aware of, is the 

only commercial loan program that will have a fixed rate which 

provides predictability for going out 20 years with a reasonable 

down payment. 

Chairwoman VELA ́ ZQUEZ. Mr. Brown, you mentioned in your testimony some changes and recommendations that you would make 

to the New Markets Tax Credit. Would you mind repeating them 

or adding to what you just said in your testimony. 

Mr. BROWN. Yes. Madam Chairwoman, what I indicated is that 

there’s an association, the New Markets Tax Credit Coalition, documented the issues and the complexity of the program and some of 

the other changes of where there needs to be regulatory fixes 

versus statutory fixes. As a board member on the New Markets 

Tax Credit Coalition, we were faced with the challenge of, do we 

focus on trying to keep the program simple without addressing 

meeting major reforms, and just ask members of Congress to go 

forward with the simple bill to extend the program? 

And those of us in the industry have concluded that we should 

go and ask members of Congress to do a very simple extension, because if you look at the time frame of when allocations have been 

awarded, it usually takes six months to a year to do the allocation 

agreement, and then another period of time before the dollars are 

actually deployed. 

As Congressman Chabot shared the GAO report, the allocations, 

those dollars are just now getting in the streets. So, out of the total 

amount allocated, about 59 percent is now deployed in low-income 

communities. And the issue is, it’s not been deployed or percolated 

long enough so that we can report to you the quantitative impact 

that the program has had. 

So, we have documented the statutory issues, things that the 

IRS—because of the tax shelter regulations, dealing with true debt 

analysis and making sure that a loan is a loan and it’s not a grant, 

24

because those are things that, because of supporters like you and 

Mr. Chabot, we felt that it was best to go forward with a simple 

extension of the program and work with the IRS, members of Congress, to then come back later with the statutory reforms that 

would deal with all the technical glitches. 

Chairwoman VELA ́ ZQUEZ. I’m seeing the incredible and positive 

impact that the New Markets Tax Credit is producing here in Cincinnati. We should be committed, not only to extending the date of 

2008, but to fully fund the program, because as we can see, the impact that it is having here, we have so many other communities 

across the country that would benefit from such a program. 

So, I hope that when you talk to other members of Congress, that 

you share the positive experience and encourage them to not only 

extend the program, but to fully fund the program, to make it really workable. And, Mr. Chabot, if you have any other questions. 

Mr. CHABOT. I have one question and one comment. A question 

for Ms. Oliver and Ms. Kirk. This is a little beyond the scope of 

this immediate hearing, but being small-business owners, when I 

talk to small-business people, they seem to bring up, when I ask 

them what their greatest challenge is—and we’ve heard this in 

hearings in Washington for years now. One of the greatest challenges that small-business owners have is providing health care for 

their employees. And I’m just wondering, is that something that 

you all, as small-business owners, are concerned about? And do you 

find that a challenging issue to deal with? 

Ms. KIRK. I’ll go first. Insurance, insurance, insurance. That’s all 

I will say. It’s not only health care, but it’s just insurance rates, 

period. Roughly 25 percent of our monthly overhead goes to insurance premiums, which is outrageous, totally outrageous. 

Fortunately, for health care, we are able to participate in a relatively good insurance program, but we look at increases annually, 

and more out-of-pocket expenses, as well, which makes it difficult 

to attract good employees. You know, it’s requiring for the nation 

a new mind-set of what health care coverage is—should be for us, 

and that we, as individuals, have to participate. 

But it does make it extremely difficult because, you know, you’re 

an employee, you want to look at your total compensation package. 

And the more out of pocket that you have to participate in your 

own coverage impacts what you have available to cover your expenses and your lifestyle. 

Mr. CHABOT. Thank you. 

Ms. KIRK. One other thing that I would like to add, which you 

didn’t ask me, but I would just like to state, that the fact that we 

purchased our building and were able to participate in a 504 program, I don’t want it to go by that a true trickle-down effect is possible, because we’re able, now that we own our building and 

we’ve—not only just the renovation, the types of businesses, African-American and minority businesses, that we used to help with 

that, but in terms of our ongoing maintenance, helps to provide, 

you know, a source of income for businesses that, say, a traditional 

large corporation would not ordinarily hire. 

And thus, those businesses, you know, are employing people that 

live in this targeted area. So, there is a true line item effect and 

25

a true trace that you can have as to the benefits of the tax credits 

and 504 program and minority businesses and on and on. 

Mr. CHABOT. Thank you. Ms. Oliver. 

Ms. OLIVER. Basically, because of the health insurance issues, I 

tend to get independent contractors that I do not have to provide 

health care for. And I just thank God that I have it through my 

husband, because when I was doing it myself, it was, like, very expensive, just per month, for one person, up to like $600. So, for 

that reason, I do have independent contractors in my business. 

Mr. CHABOT. Your insurance, then, is provided through your husband’s employment with another company, job. 

Ms. OLIVER. Correct. 

Mr. CHABOT. It’s one of the—as the chairwoman knows, it’s an 

issue that we, as a nation, are struggling with. And, certainly, 

we’ve been dealing with this in the Small Business Committee, and 

there are various proposals that have been put forward. And we 

are considering those things now. 

We had a bill that we proposed in the past couple of Congresses, 

called the Health Care Affordability Act, which would allow every 

individual and every small-business owner to fully deduct all the 

health care premiums from their taxes, which large companies can 

do now, but a lot of small companies can’t. Individuals certainly 

can’t. 

We’re looking at the high cost of lawsuits and, you know, medical 

malpractice lawsuits, and things of that nature, looking at what’s 

the best way to handle that, because that causes premiums to go 

up. 

And also allowing small-business owners to pool their resources, 

association health plans, where a number of barbers, for example, 

or a number of beauticians, or other businesses, could join together 

and have greater ability to negotiate with the insurance company 

for lower rates for their employees, various things that we’re looking at. But I didn’t want to get too far afield of the hearing. 

Chairwoman VELA ́ ZQUEZ. That would be a topic for another hearing, but let me add to that. First, that I was one of the lead sponsors of the association health plans with all the members. It was 

bipartisan legislation to allow for small businesses to band together 

and leverage to provide insurance. 

On the Democratic leadership, I have to tell you that I’ve been 

telling the democratic leadership that this is an important issue, 

and that we cannot address the issue of lack of health insurance 

in our nation without addressing the issue of lack of insurance for 

small businesses. 

Out of 44 million Americans who do not have any access to 

health insurance, 60 percent of them are either small business or 

their employees. It is an important issue for this committee, we’ve 

already held hearings. 

We, the Democrats, also—I took—I put together a round table. 

So, it is a priority for our work committee. And, hopefully, we will 

be able to come up with a bipartisan legislation that we can all afford to have. But this is a real challenge. And it is the right thing 

to do on behalf of small business. Mr. Brown, you wanted to add 

something. 

26

Mr. BROWN. I was just going to clarify an answer to a question 

that you posed, and it was a very important one, about how we approach Congress in extending the program versus regulatory 

changes versus statutory. And I really wanted to just, because of 

our bank investors in the community, to really present the program 

from their risk. 

And the whole issue, and the clarity of the program, from our 

standpoint, is that the investors are trying to manage against recapture risk, and so they have to rely on the tax opinion from the 

counsel to note that the investment or the loan would meet the IRS 

definition and guidelines. 

And so what happens, the community development mission and 

our ability to use the tax credit to subsidize projects, which will 

allow us to forgive a loan or forgive an investment, we can’t structure the deal that way, because it could not meet the—get the legal 

opinion and thus be a tax credit shelter definition and cause recapture to the investor. 

So, those are the issues for champions like you who know we 

need this private capital to be done in a flexible way to close the 

gap, that there are other public policy objectives. You have to make 

sure that investors aren’t enriching their pockets. And that, in the 

most simple way I can put it, is the difficulty of the complexity of 

this program. 

Chairwoman VELA ́ ZQUEZ. Mr. Main. 

Mr. MAIN. I just wanted to mention briefly on the health insurance issue, HCDC is a small business. We have experienced between 12 and 20 percent increases in our health insurance we provide to our 20 employees. As far as the association, we have roughly 47 companies in our incubator. There’s about 200 employees, 

that if we could pool that into an association, we could—I understand we would see lower premiums because we would have that 

critical mass of the 180 to 200 employees as opposed to having 

right now a unit of 20. 

Mr. CHABOT. Madam Chair, just one brief concluding comment, 

if I could. You know, oftentimes I think that the image or the view 

that people get from what goes on in Washington is Democrats and 

Republicans are always fighting with each other and trying to take 

political advantage and taking shots. 

Chairwoman VELA ́ ZQUEZ. We’re friends. 

Mr. CHABOT. And I think that’s one thing that is—it’s true, and 

that there are those that do work in a bipartisan fashion. And I 

think that’s the way the committees ought to work, and some do. 

And the Small Business Committee, I think especially now—that 

did have problems in the past, there’s no question about that, but 

the Chair—as the Chair and myself, as a ranking member, have 

worked very hard, and our staffs have, to work as much as possible 

in a bipartisan fashion. We’re not going to agree on everything. 

There are philosophical disagreements that we have, but you can 

disagree and not necessarily be disagreeable. And when you work 

together, I think you can accomplish great things for communities, 

and you can also accomplish great things for our country. 

So, I want to thank you, again, for coming to our district, and 

thank you for continuing to work in a bipartisan fashion, even 

though your party is in the majority and mine in the minority. I 

27

would like to see that change someday. That’s one of the things we 

disagree on, probably. But, let’s continue to work together. Thank 

you for—

Chairwoman VELA ́ ZQUEZ. Well, let me just say thank you, Steve. 

First, this is the first field hearing that we have conducted in four 

years. And as I said, there is no way that we can know if the 

things that we are doing in Washington really are working back in 

our communities if we don’t come and listen to you here, and if we 

don’t come into your district and see the positive developments that 

are taking place. 

But, when it comes to the Small Business Committee, and I’ve 

been serving on this committee for 15 years now, and given the political climate in Washington, my comment and my opinion have always been that this is the committee that should be run in a bipartisan way, because there should not be a Republican or Democratic 

approach when it comes to small businesses. 

And as Chair now, I will recognize the right of the minority to 

deliberate, to participate, to fully participate in the legislative process. If I deny that right, I will then call for a partisan reaction and 

response, and I would understand that. But, hopefully, we will continue to work in a bipartisan way so that small businesses in this 

country will benefit from the work that we do in the capitol and 

in DC, in the House of Representatives. 

It has been a great pleasure for me. Thank you very much for 

all the witnesses. And we will take all this wealth of information 

back to the capitol, to the House of Representatives, to our committee, and we will review and see how can we improve the 504, 

the New Markets Tax Credit, to make sure that they are, not only 

reauthorized, but fully funded. 

Thank you very much, And this committee is adjourned. 

[Whereupon, at 11:40 a.m., the committee was adjourned.]

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