Dakota Business Lending Allocates $7.5 Million in NMTC Financing for Tecton Products Expansion
Apr 7, 2022
Dakota Business Lending is excited to announce that they have closed an allocation of $7,500,000 in New Markets Tax Credit (NMTC) allocation to support Tecton Products, LLC and the expansion of their manufacturing facility in Fargo.
The new 150,000 square facility is being constructed on the site of Tecton Product’s existing Fargo location. It will allow Tecton Products to increase their product line capacities, upgrade and expand their tool and die equipment, add office space, and create a total of 140 full-time jobs in addition to their existing 250 employee workforce over the next seven years.
The $30+ million expansion project qualified for NMTC financing because it is located in a qualifying, highly distressed, low-income area in North Dakota. It will also bring high quality jobs for low income and minority populations that include a full benefit package, strong quality wages, and training and educational opportunities.
Tecton Products’ expansion project would not be possible without the $7.5 million NMTC financing from Dakota Business Lending, which helps close a funding gap and ensure that Tecton Products can meet the current demand for their products. The funding from the NMTC program allows the company to move forward immediately with their expansion efforts and begin job creation opportunities without delay. “The New Markets Tax Credit program helps businesses like Tecton Products to continue to grow and invest in our community,” said Tom Gohdes, Director of Operations at Tecton Products. “The program brings value to our community by helping companies like us create good paying jobs that provide people careers in manufacturing.”
President and CEO of Dakota Business Lending, Steve Dusek, added: “Dakota Business Lending is proud to provide this financing opportunity for Tecton Products and other areas throughout the state. Expansion projects like these not only create quality jobs but boost economic development within our communities.”
Dakota Business Lending’s NMTC allocation for this project was monetized by selling the tax credits to an investor in exchange for 7 years of income tax credits as provided by the program. The actual investment from the allocation into the project ends up around 17-20% after selling the tax credits and cost of financing. Tecton Products also partnered with several other financing and economic development entities to make this expansion possible, including: The Greater Fargo Moorhead Economic Development Corp (GFMEDC), City of Fargo, Cass County, and West Fargo Public Schools.
Dakota Business Lending was awarded a total of $30 million in NMTC allocation in September of 2021 and is working to invest the remaining $22.5 million into other qualifying expansion projects throughout the state. “The NMTC program will have a significant impact on many families, businesses, state, and local economies,” added Dusek. “We are proud to be among the first to use this program to help revitalize communities throughout North Dakota.”
About Tecton Products
A member of the Marvin family of companies, Tecton Products was founded in 1992 and became a wholly owned subsidiary in 2008. They are the leading designer and manufacturer of quality custom fiberglass pultrusions, primarily used for Marvin products such as window and door casings, as well as products for other industry sectors including agriculture, HVAC, and refrigeration. The manufacturing company currently has over 350 employees across their three U.S. locations, including Fargo, ND.
About the New Markets Tax Credits (NMTC) Program
Created in 2000 through the Community Renewal Tax Relief Act, NMTC is run and administered through the U.S. Department of Treasury. In 2021, the program allocated a total of $5 billion to Community Development Entities (CDEs) throughout the nation through a competitive and challenging application process, who will then use their allocations to further the mission of the program: to encourage and jumpstart investment in low-income census tracts to create jobs, bring new opportunities to qualifying areas, and fill a financing gap for transformative projects.