New Markets Tax Credit Allocation Case Study for Jones Lumber Gloster, LLC
Jones Lumber Gloster, LLC acquired an underutilized 200,000 square foot graded lumber mill located in the non-metropolitan area of Natchez, Mississippi with a plan to renovate and expand the facility. The renovation and expansion will include the construction of a new 50,000 square foot building to be used as a warehouse and dry kiln facility, acquisition of a 75,000 square foot new mill and warehouse facility, and the purchase of significant equipment that will allow the mill to double production and operate 24 hours per day.
In addition to the $10.5MM of Federal and $7.1MM of Mississippi state NMTC Allocation from Renaissance Community Loan Fund, project financing included $8MM of Federal and $2.8MM of state NMTC allocation provided by investor Hancock Whitney Bank’s CDE, Hancock Whitney New Markets Fund, as well as owner equity.
The combined investment supports 93 direct jobs (85 new or retained and 8 construction jobs) in severely distressed, non-metropolitan Natchez, Mississippi where the census tract poverty rate is 30.8% and the unemployment rate is 15.10% (1.82 times the national unemployment). The skill level for new FTE jobs created will range from basic laborers to advanced inspectors/ operators. Annual compensation provided at the facility for entry-level positions ranges from $36,000 (averaging $19.78/hour) to $40,000 (averaging $21.97/hour) for retained and new jobs, exceeding the MIT Living Wage of $10.68 for Adams County by over 85%.
Locally, the quality jobs with higher-than-average compensation provided to employees needed to run this mill will provide a significant boost to businesses and the Natchez economy. Upon completion of the expansion and upgrades to the two manufacturing lines, a significant number of employees will be hired and required to operate the facility. Jones Companies is planning to collaborate with the Natchez WIN Job Center, City of Natchez and other local organizations to identify local employees and expects every job to be filled from the community. Jones Companies is estimating that greater than 70% of all jobs will be filled by LIPs. Once fully staffed, the facility will be responsible for the direct or indirect employment of nearly 1% of the population of Natchez.