By James McNair
The Cincinnati Enquirer

Thirteen Greater Cincinnati corporations have committed $85.2 million toward an urban renewal proposal that, if approved for federal investment tax credits, could spur business and residential development downtown and in surrounding low-income neighborhoods

Two private-sector groups - the Cincinnati Center City Development Corp. and the Cincinnati Equity Fund - teamed up to beat Tuesday's application deadline for the government's so-called New Markets Tax Credits program. Created by Congress in 2000 to stimulate economic growth in low-income areas, the program will approve $3.5 billion in the latest round of tax credits.

"It's designed to encourage a broad range of investment in low-income communities - from real estate projects to operating businesses," said Craig Greenberg, a Frost Brown Todd lawyer in Louisville who helped prepare the application.

Those prepared to invest in the program - and receive tax credits of 39 percent - include Procter & Gamble, U.S. Bank, Western & Southern Financial Group, Fifth Third Bank, General Electric, E.W. Scripps Co., Convergys and Kroger, said Charlotte Otto, a P&G executive who helped spearhead the funding effort.

She said the group hopes to raise investor commitments to $90 million. The group originally hoped to raise $50 million from the private sector.

"This is huge good news to raise more than $80 million in commitments in 30 days," Otto said. "It is such a strong signal in the business community to move our city forward. It's going to help create some of the great places where Cincinnatians will want to work, live, shop and play."

The tax credits are far from being a cinch, however. Otto said only 10 percent of the credits sought last year were approved, and the competition is expected to be tougher.

"If we're successful in our application, this will jumpstart (the development corporation's) projects," she said. "We have a competitive application, but it's a very competitive program."

The federal program is administered by the Community Development Financial Institutions Fund, part of the Treasury Department. It offers no grant money, only tax credits to investors, whose money will be invested or loaned as part of the financing for private-sector proposals.

"The benefit to the business would be that this fund would provide below-market-rate loans to businesses or make equity investments," Greenberg said. "The majority will primarily be invested in real estate projects."

In Cincinnati, the area eligible for tax credit projects begins at Fifth Street and stretches through Over-the-Rhine into the city's many low-income neighborhoods. Retail, commercial, office, restaurant, hotel, residential and mixed-use projects qualify for the program.

Greenberg said 18 proposals are being considered for funding if the investment tax credits are approved.

Otto said she was joined in the fund-raising effort by Robert Castellini, chairman of Castellini Co., and John Barrett, chief executive of Western & Southern Financial. The nonprofit development corporation is run by a 23-person board headed by P&G CEO A.G. Lafley.

E-mail jmcnair@enquirer.com