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Semaphore’s Pacesetter CDE Wins Award

Local firm runs $90 Million in New Markets Tax Credits.

Semaphore is pleased to announce that it has been awarded $30 Million in New Markets Tax Credits (NMTC) in the latest allocation from the U.S. Treasury Department's Community Development Financial Institution (CDFI) Fund. The recently revealed NMTC program awards work to stimulate equity investment from the private sector in low-income communities by providing a substantial tax credit to investors over a period of 7 years. Semaphore has been operating the NMTC allocatee, Pacesetter CDE, for the past three years and last fall entered into agreement with its majority shareholders, Wells Fargo and Bank of America, to acquire 100% of the firm.

Pacesetter CDE was one of only 85 Community Development Entities (CDEs) nationwide that received an award this spring. It had previously invested and currently monitors $60 Million in tax credits in two earlier allocations.

 “We are excited to own and run this fund and look forward to the prospect of deploying future tax credits prudently and efficiently in appropriate businesses and projects throughout the country and in the Merrimack Valley.  We have an incredible pipeline of opportunities and we will begin working on new high-impact projects immediately,” said Mark S. DiSalvo, President and Chairman of Pacesetter CDE who is also founder and CEO of Semaphore, headquartered in Methuen.  Previous allocations were limited to investment in Texas and adjoining states. Since Semaphore’s purchase of the fund, DiSalvo has expanded the program to allow investment nationally.

Pacesetter CDE’s first award of $30 Million was deployed in less than 18 months and again last year it was awarded another $30 Million. “In our first year we led the establishment of a Doctoral-level School of Optometry, the redevelopment of a Katrina flood-damaged office building into a first class hotel in New Orleans, and the creation of a retail fuel depot with total private investments of $60 Million.  PCDE’s investments in its initial allocation created over 400 direct jobs, services to thousands of individuals monthly and total local and state tax revenues is expected to be over $2,000,000 annually. The total economic impact for that one allocation over the next 10 years is projected to be greater than $300 million.  “Most of the additional benefits will be felt in local communities with the creation of much needed jobs and support for education, health care and municipal services,” said DiSalvo, who also serves as the Town Moderator in North Andover.  

Last year, Pacesetter CDE completed its most recent NMTC allocation for hard to find operating business financing, providing equity investments and/or senior debt. Approximately one-fourth of the allocation was dedicated to investment in distressed rural communities. In its second$30 Million allocation it:

  • Financed, as a lead catalyst, the revitalization of West Liberty, Kentucky whose downtown area was devastated by a series of category E3 tornadoes in March 2012. Health/Wellness and other facilities will create and retain nearly 500 permanent jobs while also supporting a medically underserved area.
  • Created a major health care facility and eye care clinic establishing a 30,000 square foot building with 35 full examination rooms, lecture halls, 24 staff, and 98 clinical interns. It is sited at and affiliated with the School of Optometry at UIW in San Antonio for which Pacesetter CDE earlier financed its creation.
  • Worked with the Boy Scouts of America to provide a meaningfully improved outdoor experience at a wilderness camp for several thousand participants including those in the ScoutReach program targeting disadvantaged youth.
  • Led development of a new five story, 120,000 square foot hospital building expansion bringing care personnel from two non-NMTC qualified locations to the inner-city.

 “The tax credits awarded in past years have gone toward preserving hundreds of thousands of jobs and bringing community facilities and new businesses into neighborhoods that desperately needed them,” stated Treasury Assistant Secretary for Financial Institutions Cyrus Amir-Mokri in announcing the new award.

"Semaphore and Pacesetter CDE are thrilled to extend our participation and expertise in helping to revitalize these communities while continuing to create jobs and opportunity throughout America,” said DiSalvo.  “Our partnership with investors and dedication to searching out qualified projects in low-income communities that will have real and demonstrable economic impact continues in earnest," he proudly added.

Semaphore (www.sema4usa.com) is a leading global professional services provider of Private Equity and Venture Capital funds-under-management and diligence services. Semaphore currently holds fiduciary obligations as General Partner for six Private Equity and Venture Capital funds, is a New Markets Tax Credit provider and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

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