Investing in successPublished: Wednesday, August 8, 2018 By: Cathy O'Connor Source: The Journal Record
There is an innovative new economic development tool that encourages investments in underserved areas of the community designated as Opportunity Zones. The obvious benefit for investors is tax breaks. The bigger benefit – and exciting potential – is fostering private and philanthropic investment to create positive change and economic opportunity in our city.
Opportunity Zones are part of the 2017 Federal Tax Cuts and Jobs Act. By taking capital gains from current holdings and reinvesting in projects located within designated Opportunity Zones, investors can defer or reduce capital gains taxes.
If held for a decade, the added profit made from the Opportunity Zone investment will not be taxed at all. The Opportunity Zone incentives have no benefit cap and can be applied to a wide range of investments in real estate and operating companies. The incentives can be used in tandem with other state and federal programs, furthering our city’s redevelopment efforts.
Oklahoma City has even more reason to be excited about Opportunity Zone incentives. Oklahoma City Mayor David Holt is one of a few leaders selected nationally by Accelerator for America to help lead a pilot program that capitalizes on the tax incentive. He, along with mayors from Los Angeles, Louisville and South Bend, have been working with urban experts Bruce Katz and the late Jeremy Nowak to create an investor prospectus for Oklahoma City that will define opportunities to attract investors from around the nation.
Many details of the new program are still being refined through regulations issued by the federal government. In the meantime, Mayor Holt is working with local leaders and Accelerator for America to review, analyze and catalog the assets in and around our Opportunity Zones, designated earlier this year by Gov. Mary Fallin. Oklahoma City’s Opportunity Zones include the central business district, the Innovation District, the Adventure District and the 23rd Street corridor in northeast Oklahoma City. A map of the Opportunity Zones in Oklahoma can be found on the Oklahoma Department of Commerce website at okcommerce.gov.
There is great potential here to unlock billions of dollars of new investment through Opportunity Zones. There is even greater potential to revitalize neighborhoods, create jobs and improve the quality of life throughout our city.
Cathy O’Connor is the president of the Alliance for Economic Development of Oklahoma City.