Millions of dollars in federal tax credits could be the missing piece that helps revitalize a key block in the heart of downtown Lancaster.

Lancaster-based Community First Fund announced this week it has received $45 million in New Markets Tax Credits, which help nonprofit lenders fund projects in economically distressed communities.

Those tax credits may give a boost to the much-anticipated redevelopment of the vacant Bulova Building at North Queen and East Orange streets and renovations of Hotel Lancaster on East Chestnut Street.

The developers behind both of those projects told LNP they are interested in obtaining the tax credits for the upcoming ventures.

“We’d like to be considered,” said Lancaster Hotel developer John Meeder, who used the tax credits in financing the Historic East Side Suites redevelopment in the 100 block of East King Street.

He has proposed overhauling the hotel at 26 E. Chestnut St. — currently 60 percent of its rooms are in service — and a nearby annex.

The hotel already has a financing deal with the City Revitalization & Improvement Zone authority.

Similarly, Zamagias Properties President Dave Martens confirmed his Pittsburgh-based company is seeking New Markets Tax Credits for the Bulova Building redevelopment at 101 N. Queen St. Zamagias previously used them in financing the renovation of the Keppel Building, which is ongoing, and Steeple View Lofts.

Martens has said his company envisions transforming the vacant Bulova Building into a mixed-use retail and residential complex.

Community First Fund President Dan Betancourt declined to say which projects might receive the tax credits, or if the fund is considering the Bulova or Hotel Lancaster projects.

However, he said the nonprofit has seven to 10 projects in the works that would be eligible, and hopes to issue at least three approvals in the next 30 days.

New Markets Tax Credits are used to attract private developers to projects. Developers receive them in return for investing, and can use them to offset their tax liability.

The allocation of tax credits is the Community First Fund’s third — it received $15 million in 2013 and $30 million in 2015.

The organization likes to allocate the tax credits as quickly as possible so it can apply to the U.S. Treasury-run program for the next round of funding, Betancourt said.

Other New Markets Tax Credit recipients in Lancaster County include Tec Centro and Conestoga Plaza, both projects of the Spanish American Civic Association’s development arm.

Community First Fund was one of 120 organizations nationwide to receive the tax credits, out of 238 applicants, and was one of five in Pennsylvania.

The total allocation, $7 billion, is the largest single round in the program’s history, according to the U.S. Treasury, which administers it.

Read the full article on LancasterOnline.