Dutchtown-based developer Lutheran Development Group is always up for a challenge. At the tail end of 2021, LDG and their co-developer Rise Community Development announced that they had secured funds for the Marquette Homes project, adding 60 affordable apartments across 14 severely deteriorated buildings and vacant lots in Dutchtown and Gravois Park. Prior to that, this partnership resuscitated 15 buildings in the neighborhood with their Chippewa Park project. Now they’ve announced the acquisition and planned rehab of a long-troubled property at 3025 Chippewa Street.
Sitting on the Dutchtown-Gravois Park border at Chippewa and Minnesota, the two-story building is catty-corner from Lutheran Development Group’s headquarters. The building is over 7,700 square feet, anchored at the corner by a commercial space. Global Mart, a known haven for drug sales, gun violence, and other nuisance activity, formerly occupied the storefront. LDG worked with neighbors to get Global Mart shut down in 2021 and restored some peace to the corner of Chippewa and Minnesota.
LDG plans to rehab 3025 Chippewa from the ground up, providing eight affordable apartments for residents at or below 60% of the area median income. They will also be seeking a suitable tenant for the 650 square foot commercial space at the corner.
Funding the Rehab of 3025 Chippewa
The estimated cost of the acquisition and complete renovation will be $700,000. In addition to individual donations and traditional financing, a significant portion of the project’s funding will come from benevolent Missouri state tax credits provided by the Affordable Housing Assistance Program (AHAP). Businesses can acquire these tax credits by making a project-specific donation to Lutheran Development Group. The credits then offset the businesses’ tax liability at a higher rate than a traditional charitable contribution deduction.
An Example of the Potential Tax Impact on Your Donation
(Please consult your tax professional—this example is for demonstration purposes only.)
A business with a net income of $100,000 would result in a tax liability of $6,250 (assuming a standard Missouri business tax rate of 6.25%). When that business makes a $10,000 charitable contribution and deducts the value from their taxable income, their tax burden would be reduced to $5,250 ($90,000 x 6.25%).
However, by utilizing AHAP tax credits, businesses receive a dollar-for-dollar reduction of their taxes due as opposed to a decrease in taxable income. Through AHAP, businesses receive tax credits equaling 55% of their donation. Therefore, the same donation of $10,000 nets $5,500 in tax credits. Assuming the same income and tax rate as illustrated above, the tax due is again $6,250. However, using the tax credits rather than a deduction, the business can offset their tax burden by $5,500—leaving their tax bill at just $750. The tax credits available through AHAP provide a great mechanism for maximizing your business’s philanthropic budget while supporting the positive transformation of our community.
For information about AHAP benevolent tax credits and qualifying donations, contact Vicki Schrader at firstname.lastname@example.org or (314) 922-9573.
More About Lutheran Development Group
Founded in 2015, Lutheran Development Group has invested more than $35 million in real estate development in south St. Louis City. Serving more than 200 households, LDG’s work includes the creation of over 200 affordable apartments, five single-family homes, the removal of blight from more than 140 vacant lots, and the development of education, arts, and community spaces.
With more than $30 million planned in future projects, LDG is not slowing down and is wholly dedicated to its mission of supporting individuals so they can live lives of purpose, in place, for community. We recently highlighted the exciting Marquette Homes affordable development project coming to Dutchtown and Gravois Park.
Support Lutheran Development Group
As mentioned above, businesses can take advantage of benevolent tax credits offered through the Affordable Housing Assistance Program. Contact Vicki Schrader to discuss your business’s donation.
Individual donations are of course always welcomed as well. Through a challenge grant from the Brown Sisters Foundation, new or increased donations to LDG may qualify for an additional match. Make your donation here.