Blast Cleaning Technologies, Inc. (“BCT” or the “Sponsor”) received a New Markets Tax Credit (“NMTC”) allocation of $13 million from FIRE for the acquisition of equipment and expansion of BCT’s operations. The expansion will support the growth of machine operations and the production of cast products, which will support the overall growth of BCT. The NMTC financing will allow BCT to expand its product line, control supplier costs, reduce inventory levels, increase quality, and ensure the availability of parts for customers (the “Project”). Additionally, BCT Cast Products, LLC, a new company owned by BCT will be created to support the new operations.
The Sponsor has indicated that the Project will be Phase 1 of the expansion and encompass the relocating of machining operations, casting quality inspection, and casting warehousing. Currently, the Sponsor’s primary facility does not have the capability or capacity to support the addition of the new cast products operations. Machinery, inventory, and quality operations will be relocated to a newly acquired manufacturing plant that is located nearby BCT’s current operations. This will allow for more space at the current facility for the shipping and assembly teams and allow for adequate space for the cast products operations. It is anticipated that operations of the newly acquired site will begin in Q4 of 2023 and is expected to operate with two shifts. Upon completion of the Project, BCT will have the capacity to meet all customer’s needs with their expanded product range.
Overall, the Project will allow BCT to remain competitive within its industry and create and retain quality and accessible jobs in a severely distressed community. The Project is seeking a total New Market Tax Credit allocation of $13 million, which will provide the necessary subsidy needed for this Project to move forward.
Project CDE Alignment
The Project is in alignment with FIRE’s 2020 and 2021 NMTC allocations in that it supports an operating business that focuses on shot blast equipment manufacturing that will create and retain accessible job opportunities in a severely distressed census tract within Milwaukee, WI. The area is characterized by an income of 68% of the area median, the site being a brownfield, and being in a TIF district. Lastly, 29 jobs will be created because of the Project.
Direct, Permanent Jobs Created and Retained at Facility
Based on Lightcast economic software, it is estimated that 29 new full-time direct positions will be created as a result of the Project. Based on Lightcast economic software, project operations are anticipated to create 21 indirect jobs.
Temporary Job Creation
Based on information provided Lightcast economic modeling software, it is estimated that the construction of the Project will create 44 full-time temporary construction jobs. Of the 44 temporary construction jobs, 70%, or 31 positions, are anticipated to be accessible to LIP’s. Based on Lightcast economic impact modeling software, the Project will create 36 indirect construction jobs.
Quality Job Creation
FIRE identifies a “quality job” as one that offers a “living wage” within a community and, at minimum, health insurance, retirement benefits, job advancement, and training. FIRE’s living wage calculation is based on the Massachusetts Institute of Technology’s (“MIT”) Living Wage Calculator, a nationally recognized source for living wages, utilizing a base of 1 working adult (consistent with the allocation application which requests data on quality jobs for individuals).
According to the MIT Living Wage Calculator, the living wage for an individual in Milwaukee, WI MSA is $16.63 per hour or $34,590 annually based on a 2,080 hour work year.
Jobs Accessible to Low Income Persons and/or Low-Income Community Residents
For the purpose of this analysis, a “low-income person accessible job” is defined as a job that an individual who possesses a high school education or less could access, and whose median household income is at or below 80 percent of the area median income. Based on the information provided by the Sponsor, of the newly created positions, it is estimated that 86%, or 25 jobs, will be accessible to low-income persons.
Additionally, using the demographic software Esri, and a 22.3-minute average commute time reflects an anticipated 38% Low-Income Community Resident penetration rate at the subject site.
Total Project Costs $14,477,500
FIRE NMTC Allocation $13,000,000
NMTC Investor US Bank
Closing Date May 2023
FIRE welcomes requests for NMTC’s throughout the year as we work to maintain an active pipeline of viable and potential projects throughout the region.