Company pays forward tax credit to support Grand Rapids nonprofit

A Holland firm has found an innovative way to support the work of a Grand Rapids organization that serves the unhoused.

Coastal Container, a family-owned and operated packaging company, is using a portion of its New Markets Tax Credit to support Mel Trotter Ministries, a Grand Rapids organization dedicated to serving those homelessness. 

When the availability of the funds and Coastal Container’s expansion plans didn’t fully align, Brent Patterson, Coastal Container’s CEO, opted to pass along $550,000 in tax credits to Mel Trotter Ministries. 

The non-profit, which provides shelter, medical, and outreach services to families experiencing homelessness, is undergoing its own expansion project, and Coastal’s redirection of tax credits has helped reduce Mel Trotter Ministries’ Next Step project capital needs by $550,000.         

“This partnership reflects our commitment to building community and how much we value making and maintaining local connections,” Patterson says. “Our roots in West Michigan and our pride in being a local, family-owned company drive us to seek opportunities to support and collaborate with other local organizations.”

Targeting investment

Created by Congress in 2000, the New Markets Tax Credit (NMTC) program encourages investment of private capital for economic development in rural and urban low-income communities. Individuals and corporations receive a tax credit against federal income taxes for investing in certain low income properties or businesses when those investments are made through a certified “community development entity.” The program is designed to leverage private investment in low-income communities. 

Under the terms of the New Markets program, an investor making a seven-year investment receives credits equal to 39% of the total project cost over the investment period (5% in years 1-3 and 6% in years 4-7).

Typical projects involve the acquisition, rehabilitation or construction of commercial real estate developments, the purchase and installation of large equipment or machinery, or the expansion of operating businesses in low-income communities.

Nonprofit’s plans

Mel Trotter Ministries, founded as the City Rescue Mission in 1900 in Grand Rapids, has launched its Immeasurably More capital campaign, which supports those in the community seeking to move from homelessness to a more secure life. 

The non-profit’s Next Step project includes new construction and the rehabilitation of a vacant building in Grand Rapids. The space will be used for job skills training and employment, workforce development, and housing for program participants.

Coastal’s own expansion plans will add 65,000 square feet to its existing facility along with more than 60 jobs in the coming years. According to Nate Hoekstra, Coastal Container’s general manager, the partnership with Mel Trotter Ministries speaks to Coastal’s mission and values.

“We received a letter from Mel Trotter Ministries thanking us for our contribution to their efforts,” he said, “and the letter ended with, ‘Perhaps a Next Step graduate will one day be employed at Coastal Container.’ That would be a total realization of our belief in family-driven values and compassion for the community.”