On Wednesday, Jan. 21, a team of city staff — including Mayor Jim Ferrell, Chief of Staff Brian Wilson and Economic Development Director Tim Johnson — will travel to San Diego.

But it won’t be to catch some sun.

Their destination will be the Novogradac New Markets Tax Credit Conference, where they plan to pitch the Federal Way Performing Arts and Conference Center project to multiple community development entities for a shot at new markets tax credits to help finance up to $10 million of the $32.75 million project.

In August, city staff sent applications to nine community development entities, many of which have already shown an interest in the performing arts center.

On Jan. 6, Johnson did his best to explain to the Federal Way City Council the experience the team will have at the conference. He equated it to speed dating.

“You have an elevator-speech type of opportunity to present what your project is again to these folks and they’re looking at it and they’re prioritizing your project compared to all the other projects in the nation at the same place and at the same time,” Johnson said.

Congress established the New Markets Tax Credit program in 2000 during the Clinton Administration. Subsequently, it was carried over to the Bush Administration and today, the Obama Administration.

The aim of the program, according to the Community Development Financial Institutions Fund under the U.S. Treasury, is to “spur new or increased investments into operating businesses and real estate projects located in low-income communities.”

The U.S. Treasury authorizes qualified community development entities to apply for the tax credits. As they labor through the complex application process for the tax credits, the community development entities call on organizations like the city of Federal Way to ask if they have a qualifying project.

Johnson said the community development entities that receive new markets tax credit allocations from the U.S. Treasury then start assessing and prioritizing the projects in their pipeline.

An important distinction for the public to remember, Johnson said, is the funding that comes from the tax credits is not government investment but private investment.

“It’s a (financing) mechanism that government created but it’s not government money,” Johnson said.

Johnson said Federal Way staff will go down to San Diego proving to the community development entities that they have skin in the game.

“Already the (former) Toys ‘R’ Us property (where the project will be built) was acquired with a state grant,” Johnson said. “People are raising money (for the project) as we speak. We also have our own ability to raise capital through a leverage loan and we are at 50 percent of design (for the project).”

Johnson said a key component of the performing arts center that is catching the attention of the community development entities is its culinary arts institute.

The project will be located in a distressed area where median income is low and unemployment is high. A recent study, according to Johnson, showed that nearly 30 percent of students in Federal Way Public Schools are obese.

Johnson said the performing arts center is a strong candidate within the pipeline application because many community development entities realize the potential impact the culinary arts institute will make in the community in regard to educating the public about healthy living and improving the city’s quality of life and residents’ economic status.

Ade Ariwoola, Federal Way’s finance director, said should the city not receive new markets tax credits, its $85 million-plus in debt capacity would allow for Council authorization of a bond to pay the difference for the performing arts center project.

But Johnson is confident the project is dynamic enough to attract interest in San Diego.

“The lovely thing that has happened since the pipeline application was submitted in August is the phones have been ringing off the hook from community development entities … ” Johnson said. “What is happening here is a snowball effect.”

The city will learn in early summer whether the project will receive any credits. Construction on the Performing Arts and Conference Center is scheduled for start next fall. The City Council will select a building contractor next month.