Antioch: Treasury, IRS Announce First Round Of Opportunity Zones Designations

This week, The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today designated Opportunity Zones in 18 States. The Tax Cuts and Jobs Act created Opportunity Zones to spur investment in distressed communities throughout the country. New investments in Opportunity Zones can receive preferential tax treatment.

In March, the Contra Costa County Board of Supervisors voted to approve census tracts within Contra Costa County. The tracts included locations in:

• Richmond
• San Pablo
• Pittsburg
• Concord
• Antioch
• unincorporated communities of Bay Point and North Richmond.

Upon hearing the news, Supervisor Diane Burgis shared that there has already been interest in the area.

“We’re already hearing that investors are calling realtors to explore available properties. This will be an important economic development tool for the City of Antioch as they consider options for the Somersville area. I’d like to thank everyone again for their timely collaboration,” said Burgis.

She further highlighted it could lead to improvements and redevelopment at the mall and in the surrounding areas.

Julie A Neward, General Manager, of the Somersville Towne Center says this now presents a huge opportunity to the community.

“Its an opportunity for the mall and owners to come up with a vision and plan. What we really want to do is engage with the property owners in the area and to see what the demand is and how we are meeting that demand. The driver for this is we really want daytime foot traffic and disposable income brought back to the area as opposed to headed out of town.”

She explained this is a tool that will spark interest that has been blight for 10-years and is an incentive for developers to reinvigorate the economy through jobs, bring back disposable income, and create a thriving economy in the mall area.

Neward credited Walter Schlueter, a member of the Antioch Chamber of Commerce Economic Development Committee, for bringing it to everyone’s attention that this opportunity was available and got the players in the area moving towards submitting application.

Under the Tax Cuts and Jobs Act, States, D.C., and U.S. possessions nominate low-income communities to be designated as Qualified Opportunity Zones, which are eligible for the tax benefit.  States were required by March 21st to submit nominations or request a 30 day extension to submit nominations. Treasury has 30 days from the date of submission to designate the nominated zones. Treasury today has designated the nominations of all States that submitted by the March 21st deadline.  Treasury will make future designations as submissions by the states that have requested an extension are received and certified.

Qualified Opportunity Zones retain this designation for 10 years. Investors can defer tax on any prior gains until no later than December 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund, an investment vehicle organized to make investments in Qualified Opportunity Zones.  In addition, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in its basis equal to the fair market value of the investment on the date that it is sold.

Treasury and the IRS plan to issue additional information on Qualified Opportunity Funds.  The additional guidance will address the certification of Opportunity Funds, which are required to have at least 90 percent of fund assets invested in Opportunity Zones.

More information can be found at https://www.cdfifund.gov/pages/opportunity-zones.aspx, as well as on the Opportunity Zones page of the Department of Finance’s website.