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Pawnee County in northern Oklahoma grapples with a 20% mental illness rate, with patients facing a five-week wait time for appointments as existing facilities struggle to keep up with staffing, necessary treatments and responses. 

That’s a problem that urgently needed to be addressed, says Brian Kirk, executive affairs director for the Pawnee Nation of Oklahoma. So the tribe proposed a new 22,000-square-foot facility on tribal land that would provide both necessary treatment options and ongoing economic development opportunities to create new jobs in the area.

The solution, though, faced a different problem: a large gap in funding, despite a $1 million grant through the Department of Agriculture’s Rural Development program, and a $3 million grant from the Commerce Department’s Economic Development Agency. 

Enter Clearinghouse Community Development Financial Institution (CDFI), a Lake Forest, Calif.-based direct lender with a history of financing projects in Indian Country.  

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Clearinghouse worked with the Pawnee Nation to apply for an allocation through the multi-billion dollar New Markets Tax Credit program, which aims to spark rural development and investment by providing tax credits on investments in low-income, disadvantaged communities, including many Native communities.

In partnership with Denver-based Native American Bank, Clearinghouse secured a $14 million New Market Tax Credit allocation to Pawnee Nation Behavioral Health Center to close the gap. 

“It's going to make a huge impact on the community,” Kirk told Tribal Business News. “We have a medical facility that does a lot, but with mental health, it was a big gap.  And then looking at the economic development side of it, there are going to be some great jobs promoting the health care industry. It was a win-win for us.” 

The development of the Pawnee Nation Behavioral Health Center serves a historically underserved population in a medically underserved area and will create 47 construction jobs and 53 permanent jobs, according to a Clearinghouse CDFI statement. All jobs will provide benefits and training opportunities and be paid a living wage.

Clearinghouse Chief Investment Officer Jay Harrison said his organization was “proud” to be a part of building Pawnee Nation’s financial backing for the deal. 

“I think it’s a really neat project,” Harrison said. “As a community development institution, if we can be a part of the solution to problems like mental illness and substance abuse, we’re very proud to do so - so we’re proud of the impact that Pawnee Nation expects this project to achieve.”

Stacking Capital

The behavioral health facility has been five years in the making, Kirk said. The tribe spent much of that time assembling a capital stack, the prioritized mix of capital — debt or equity — used to purchase, build or develop a piece of real estate. That’s when a consultant pointed the tribe toward the New Markets Tax Credit system, which seemed like a viable way to secure the multi-million dollar fragment still missing from the stack, Kirk said.

“It was new to us, we’d never done it before. We tried to talk to a few folks, but they hadn’t done anything with it, either. Everyone knows about it, no one has dabbled in it,” Kirk said. “We had to work with a consultant of ours that's done NMTC in other realms, and they kind of helped us walk through it, and that helped us know what we needed to do.”

It took roughly nine months to compile the appropriate paperwork and approvals for what Kirk estimated to be an 18-page checklist provided by Clearinghouse CDFI. The checklist involved everything from an economic feasibility study to where the tribe would get the land for the project. 

Despite the burden on staff, the tribe was glad to find a way across a major gap in their funding, Kirk said. The fact that the project in question was a healthcare center in rural America played to the NMTC program’s strengths, which was bolstering economic growth in distressed areas, a priority that was amplified even once COVID-19 began sweeping across the country in 2020.

“It was time consuming, but it wasn’t too complex,” Kirk said. “[Clearinghouse] was excited to know we were coming to them about the NMT program, because CDFIs have been trying to get this information out to tribes. They aren’t used much and I’m not sure what the barrier is, or what side it’s on.”

Market data says tribes haven’t had the same access to NMTCs as other demographics, per a report by the US Treasury as described in a previous Tribal Business News story. Some of the issues center on simple outreach, as Native intermediaries aren’t receiving the same support as non-Native intermediaries, and many of those intermediaries aren’t pointing tribes to the credit. 

Clearing the hurdles

In other cases, however, tribal lands aren’t clearing the hurdles of a competitive program to be considered for allocations. Economic impact studies that serve as scoring criteria for eventual allocations are valued on their impact per dollar invested, and that puts rural communities - like many tribal reservations, at a disadvantage, per prior Tribal Business News reporting

Moreover, the application process is, as evidenced by the Pawnee’s efforts, time consuming and often expensive, placing a further burden on tribes already strapped for revenue and capacity.

It’s an issue that has since been taken up by the CDFI Fund, an agency of the US Treasury that governs the NMTC program. 

The CDFI Fund spun up the NMTC Native Initiative to identify barriers to tribal use of the tax credits program and to lower them. A 2023 report by the CDFI Fund pinpointed particular challenges facing Native CDFIs, whose limited staffing capacity could lead to less than perfect applications in a competitive environment, for example.

The end result is that tribes are missing out on a program that could be very good for them, if Kirk’s experience has been any indication.

“I highly recommend looking into it,” Kirk said. “This is beneficial to smaller or less fortunate tribes. The tribes with a lot of revenue might be able to get a business loan or start something on their own, but for smaller tribes without that revenue, this is a way they can start looking into funding for large projects. 

“We didn’t have access to a large multi-million dollar loan, but this is how we utilized our assets and built that capital stack. That’s what made us go for the NMTC.”

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About The Author
Chez Oxendine
Staff Writer
Chez Oxendine (Lumbee-Cheraw) is a staff writer for Tribal Business News. Based in Oklahoma, he focuses on broadband, Indigenous entrepreneurs, and federal policy. His journalism has been featured in Native News Online, Fort Gibson Times, Muskogee Phoenix, Baconian Magazine, and Oklahoma Magazine, among others.
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