Theater patrons at Worcester’s newly restored Hanover Theatre have probably never heard of it, nor have the moviegoers at Pittsfield’s Beacon Cinema, or anybody who stops in for a muffin at Ula Café in Jamaica Plain.

But whether it’s known or not, all those entities owe some part of their current existence to the New Markets Tax Credit.

But the federal tax credit is in limbo right now. A hesitant Congress has waited months longer than usual to approve the package containing this credit and others, leaving would-be beneficiaries waiting and watching.

“It’s nerve-wracking,” said Joseph L. Flatley, president and CEO of the Massachusetts Housing Investment Corp., a private lender and investor that disburses credits to projects throughout the state, including the Hanover Theatre, Beacon Cinema and the development that now houses Ula Café and others.

Flatley and others say the tax credits have bipartisan support, but other parts of the budget have to be balanced first. With a whopping national deficit and a politically volatile atmosphere, legislators are carefully – and slowly – debating how to pay for the credits.

Hurry Up And Wait

Meanwhile, more worthy projects are out there and anxious to get funding in place, he said. MHIC has gotten allocations for six of the last seven years, dispersing about $450 million worth new markets credits to developments statewide. More projects are in the pipeline, he said, but without approval, they’re having a harder time lining up other investors.

The New Markets Tax Credit is granted directly to certain investors who receive a credit against income taxes for putting their money in designated community development entities. The community developers, in turn, work on approved projects in low-income areas.

That provides a powerful incentive to would-be investors to pony up money on the developments – after Congress approves it. But while these projects often get funding from multiple sources, just one missing piece of the puzzle can make it tough to convince others to put up their money, Flatley said.

Among the current would-be developments in the pipeline: Boston’s culinary jobs training area at the soon-to-be-built New England Center for Arts and Technology; the mixed-use Union Crossing development in Lawrence; and new housing in Jamaica Plain’s Jackson Square.

“We have applications right now for new markets that we could proceed next year,” Flatley said.

Usually Congress passes this package fairly swiftly, and it wouldn’t have been unusual for the tax credit to pass in November or December of 2009.

Alison Feighan, spokeswoman for Rapoza Assoc., a D.C.-based public interest lobbying firm, said $20 billion worth of credit applications arrived by the June 2 deadline, vying for the $8 billion available under the New Market Tax Credit.

“There is a great deal of pressure to get this done,” she said, adding that she expected Congress to take up the issue when they re-convene in September.

Uncertain Outlook

Charles Spies, managing director of Maine-based community development corporation CEI Capital Management, agreed that the holdup has created an uncertain outlook for developers. Some want to break ground in 2011, but aren’t sure whether they should start making building plans and lining up construction companies, or if they should hold off until the credits actually pass for certain.

“It’s very hard to look out with 2011 with any certainty,” he said.

The New England Center for Arts & Technology, which is sponsored by the Dorchester Bay Economic Development Corp. (DBEDC), is expecting $9.7 million as a result of the tax credit, which will cover about one-third of the project’s total cost.

But Jeanne DuBois, executive director of DBEDC, sounded a more optimistic note. Although she expects the center to start construction next year, she said she has a cushion of several months before a tax credit delay would become urgent.

For these types of projects, developers have to think in decades, not years, DuBois said. Funding is simply harder to come by from all corners in the current environment, but a good project can still garner interest from multiple investors.

“You’ve got to find the right business that fits the neighborhood and creates good jobs,” she told Banker & Tradesman. “Then you have everybody and their uncle wanting to get on the deal.”