State Rep. David Brock Smith is excited about development possibilities that may come out of Gov. Kate Brown’s naming a census tract from Humbug Mountain to the Coos County border and southeast to Agness as an “opportunity zone.”
The qualifications for designation were based on poverty levels in 320 areas in Oregon. Brookings and Gold Beach, while among the 86 chosen by Brown, did not qualify for final consideration.
Eligible tracts had a poverty rate of at least 20 percent or a median family incomes less than 80 percent of the area median income. The tracts were outlined based on 2011-15 census data, and are defined as “low income communities” by the federal New Market Tax Credit program.
“That the Port Orford school district is the most impoverished school district in the nation was a factor in her decision,” Smith said. “And Pacific Gales golf course (could benefit now that it’s) finally through the hurdles, and the infrastructure around that.”
Another possible site for economic development opportunities is the 63 acres adjacent to the Cape Blanco Airport north of Port Orford.
“The potential for investment there is fantastic,” Smith said. “It’s also one of the reasons I advocated for the Brookings tract: Borax (housing development north of town), the airport. Add the opportunity zones to the enterprise zones passed by the county, and it’ll be great.”
The federal Tax Cuts and Jobs Act of 2017 established a new tax incentive for private investors, who can reduce their capital gains tax burden by making long-term economic investments in the communities.
Those interested in investing in a project that would increase the economic vitality in an opportunity zone must either own or have an equity stake in the business.
“Really what it is, is a federal tax break for investments,” Smith said. “An investment of years gets an investor a 10 percent reduction in capital gains at the back end, seven years gets them a 15 percent reduction and 10 years, they get a 100 percent waiver of their capital gains.”
Funds can be spent in almost every industry except what the federal tax code calls “sin businesses”: liquor stores, massage parlors and, these days, likely marijuana dispensaries.
Housing can be part of the investment, as can capital improvements to an existing business.