New Investment Fund Aims to Boost Health Care and Jobs in Rural Areas

A new initiative is making waves in the endeavor to uplift rural and tribal communities across the United States. The Morgan Stanley Rural NMTC Fund, which has secured a $45 million investment, is set to channel this funding into vital projects that focus on health care services, affordable energy, and job creation. This pioneering fund utilizes federal New Markets Tax Credits (NMTCs) to facilitate its goals, collaborating closely with Broadstreet Impact Services for effective implementation.

This investment strategy is not just about numbers; it reflects a comprehensive approach to economic development aimed at the heart of communities affected by poverty. The fund intends to address the pressing challenges faced by these areas, particularly in nonmetropolitan census tracts where unemployment rates are high and median incomes remain low. Joy Hoffmann, Managing Director at Morgan Stanley, emphasizes that the fund is designed to enhance economic opportunity and well-being in regions that often struggle to access necessary capital.

Projects that qualify for funding include initiatives centered on health care needs, electrification—be it through solar energy or other sustainable solutions—as well as community services and workforce development programs. This is a unique fund in that it specifically prioritizes jobs that offer living wages and benefits, ensuring that the positions created are accessible to a broad spectrum of workers. In particular, this includes those facing employment barriers like disabilities, lack of higher education, or histories of long-term unemployment.

As the fund gears up for its first investments, the implications are promising. The initial funding has already gone toward two new health facilities located in Colusa, California. This community, with a population exceeding 6,400 residents and located an hour from Sacramento, is set to benefit significantly from an $8 million investment allocated to refurbish an existing local structure into a comprehensive health facility, along with the development of a new pediatric health clinic.

Led by the Colusa Indian Community Council (CICC), these new health centers are projected to support over 28,000 patient visits a year. In an area where people often have to travel up to 60 miles to receive medical care, such investments are not just beneficial; they are essential. Furthermore, because the funding comes with NMTC backing, the capital costs are considerably lower than traditional loans, leading to substantial savings, approximately $500,000 in annual debt service for CICC. The secured savings enable the council to enhance salaries for low-wage employees and improve compensation for health providers—crucial to attracting talent and ensuring the health service’s sustainability.

Brent Kuennen, Senior Vice President of Fund Management at Broadstreet, notes, "By blending low-cost capital from the fund with conventional debt sources, this project is able to move forward. Without the NMTC financing, it would not be possible."

The overarching goal of this fund is ambitious yet crucial: to nurture the economic infrastructure within rural settings, concurrently enhancing the lives of their inhabitants. Hospitals, often viewed as the economic linchpins for these communities, exemplify the kind of investment needed; for every dollar spent on healthcare, an estimated $2.30 is generated in supplementary economic activity. However, many rural hospitals face closure, which in turn strips communities of good jobs and local monetary flow.

Morgan Stanley, a prominent player in global financial services, lends its expertise by aligning with Broadstreet Impact Services to establish this impactful initiative. Broadstreet specializes in providing fund administration and advisory services focused on effecting social, environmental, and economic change. The aim of their partnership in this fund is to instigate significant change in underserved rural regions across the country.

In summary, the launch of the Morgan Stanley Rural NMTC Fund highlights a tailored approach to investment, capitalizing on federal resources to directly confront the systemic issues faced by marginalized communities. Through essential investments in health and infrastructure, the fund doesn’t just aim to change individual lives; it seeks to revitalize entire communities, bringing hope and opportunity where it’s needed most.