Truist, Dogwood Health Trust back Industrial Commons financing for Morganton Innovation Campus project

The Industrial Commons has closed on a financing package designed to advance construction of its Innovation Campus and secure long-term ownership of its headquarters on Hopewell Road, using a federal tax credit program that attracts private investment rather than a direct grant.

The Morganton-based nonprofit said it has finalized a New Markets Tax Credit transaction tied to a $37.25 million development project that includes building a new Innovation Campus and acquiring and rehabilitating its existing headquarters building at 647 Hopewell Road.

The New Markets Tax Credit program, administered by the U.S. Department of the Treasury, is designed to spur private investment in federally designated economically distressed areas by offering tax credits to investors. In this case, The Industrial Commons said Truist is purchasing the tax credits and serving as the tax credit investor.

Unlike many public announcements about economic development funding, the organization said this financing is not a check written to the nonprofit. Instead, it brings together multiple partners and funding sources to lower borrowing costs and support construction and pre-development expenses. The structure also allows the organization, after a required seven-year compliance period, to own the buildings outright.

“Truist’s participation represents a meaningful investment in Morganton, not as a donation, but as a long-term commitment to a project that is designed to deliver real economic and social returns,” Erin Kizer, senior director of infrastructure at The Industrial Commons, said in a statement.

A key component of the financing package is a $10 million program-related investment loan from Dogwood Health Trust, which The Industrial Commons said allowed it to complete its funding stack and proceed with the tax credit structure. The organization said the loan also made it possible to acquire the Hopewell Road headquarters building in late 2024.

The Industrial Commons said the Innovation Campus is intended to generate measurable benefits including job creation, workforce training and expanded local manufacturing capacity. The campus project involves redeveloping a former furniture factory property into a manufacturing and community hub.

The organization credited multiple partners and advisors for helping structure the transaction, including community development entities The Reinvestment Fund, Innovate Fund, Urban Research Park and Truist Community Development Enterprises; consultant SB Friedman Development Advisors; legal counsel Applegate & Thorne-Thomsen; and accounting firm CohnReznick.

The Industrial Commons said it will spend the next seven years delivering the project and reporting outcomes required under the federal tax credit program, with the goal of long-term community ownership and control of the facilities at the end of the compliance period.

— AVN