About Pacesetter CDE, Inc.
Pacesetter CDE, Inc. (PCDE), a subsidiary of Sema4, Inc. (Semaphore, the Controlling Entity), was created to increase the total number and dollar amounts of investments in Low-Income Communities.
PCDE’s four previous New Markets Tax Credit Allocations have generated hundreds of jobs, revitalized distressed areas, provided low cost healthcare access to Low Income Communities (LICs), improved the local economies of the areas surrounding the businesses and improved educational and training opportunities. PCDE, under the guidance of its LIC Accountable Governing Board Members, has primarily focused its investments in urban and Non Metro areas of CDFI Fund target states – locations that have significant needs but that generally afford few opportunities for these types of projects.
PCDE will provide significantly better than market rate terms on equity–like financings (lower than market interest rates, longer than standard amortization periods and other terms that are more flexible than current market offerings). The proposed investments will allow PCDE and its Controlling Entity to improve their overall product offerings – more access to capital and better terms for qualified businesses.
PCDE has used its track record of successfully providing New Market Tax Credit products and services to build a pipeline of potential investments and financial structures similar to those it intends to use with the proceeds of additional allocation. This $200+ million pipeline has been fostered and carefully reviewed by PCDE’s Governing Board (6 out of 8 of which are LIC Accountable).
PCDE will utilize 100% of its New Market Tax Credit allocation to provide financing for Real Estate Activities where the real estate will be owned and principally occupied by an Operating Business. PCDE’s focus is on activities related to healthcare, education and opportunities that provide high quality employment for low-income persons and residents of Low-Income Communities. It will provide equity-like capital in the range of $2 to $10 MM to disadvantaged businesses in LICs throughout a national service area, with a focus on severely distressed areas in Texas, Georgia, Arkansas, Alabama, Florida and Tennessee. PCDE will target businesses that create significant job opportunities and provide their employees with additional employment benefits such as living wages, training, healthcare and retirement programs. PCDE will give priority to projects that produce lasting impact by creating permanent jobs and raising incomes in highly distressed LICs, consistent with PCDE’s extensive history of investing in distressed communities. PCDE will continue to invest in those opportunities that provide access to healthcare and educational opportunities for LIC residents.
The PCDE staff has significant expertise in working with various forms of public/private financing programs regulated by Federal and State government agencies. Under the New Market Tax Credit program, PCDE has built an infrastructure to support the various IRS/ New Market Tax Credit regulatory requirements, financial and compliance audits and CDFI Fund reporting. In addition, PCDE staff has a long history of working with the US Small Business Administration providing financings to minority and woman owned small businesses. The staff also maintains compliance and regulatory functions with CAPCO funds (tax credit sponsored business financings managed by state agencies). In addition, PCDE has recently been awarded four State New Market Tax Credit Allocations.
PCDE, its staff and its Governing Board have built the necessary systems, processes, procedures, LIC networks and industry contacts to source the most qualified opportunities, find appropriate investors and lenders and seek the best terms for the Qualified Active Low-Income Community Businesses (QALICBs). The team’s experience and efforts maintain compliance, monitor risk and appropriately manage PCDE’s assets. With its successful track record of quickly deploying better than market financing to qualified businesses in LICs, PCDE intends to accelerate its mission: investing in businesses that provide job opportunities, improved access to healthcare and education/training resources.