Nashua City officials partnered with Mascoma Bank to accept New Markets Tax Credit (NMTC) federal money, providing tax credits to private businesses to provide additional funding to construct our Performing Arts Center.
The mayor and legal office engaged in deceptive practices, commingling taxpayer money with federal money, eliminating the public’s rights to track spending, understand the true costs of the facility, and burden citizens with heavy fees and long-term debt.
Taxpayers funded $21 million in bonds to construct the City-owned Art Center. Ten months later, city leaders amended the bond to accept NMTC funds. The city had committed to raising $4 million in private donations but could not get private donors to commit to the project. So, the city made up the shortfall using federal funds.
The Mayor and Attorneys never disclosed they were entering into a public-private partnership (PPP). Eight months later, the city formed two nonprofit public corporations under state law that are, by law, city-controlled and managed. However, when they were incorporated, the Attorney wrote the bylaw as if the corporations were private and shut out the public.
Eighteen months after these corporations were formed, City leaders presented an “omnibus” resolution that knit 25 pieces of legislation together to enact this federal scheme. Three weeks before approval, in extreme disregard for the public’s money and the public’s right to know, a city-hired attorney secretly incorporated a for-profit private corporation with the state. Disclosure of this secret company did not happen until the night of the “special” meeting, which was approved by the Board within an hour.
The city legislation never named the for-profit corporation that had formed NPAC Corp; it did, however, name the public nonprofit corporations formed. This omission appears deliberate. The legislation was written as if all three corporations were public.
A new deal diagram presented the night of the meeting was described as a “nuance tweak.” This nuanced tweak took away the public’s right to understand the spending on this project. The cost of Nashua’s Art Center is unknown.
Taxpayers were forced to guarantee a $9.55M Bank loan, turn $7.1M of our bond money into a loan, pay for insurance on a facility we no longer owned, and pay rent for an art center we constructed with our bond money.
This federal scheme is dripping with deception. An attorney in the omnibus hearing posed the question, “Why the devil is this so complicated? Because this federal tax credit scheme was inappropriate for a municipality to engage in. Municipalities cannot accept tax credits, and private corporations are formed without identifying the relationship in the PPP.
Please exercise caution when thrusting your municipality into a PPP tax credit scheme. Honor public transparency.
The issue regarding public records in the private company set up by Nashua is on appeal to the New Hampshire Supreme Court in case #2024-0181. See www.good-gov.org for the citizen’s white paper on this federal scheme.
