How can Opportunity Zones benefit Main Street?
In spring of 2017 the OZ legislation was established as part of the Tax Cuts and Jobs Act. It’s an economic and community development tax incentive that provides an avenue for investors to support distressed communities in designated areas. Taxpayers can get capital gains tax deferral for making timely equity investments in Opportunity funds that then deploy capital into OZ business and real estate ventures.
The tangibility of how this incentive can help a community can be tough to grasp. The legislation is new and setting president with project cases and impacts will take a little while to surface. Those examples are starting to percolate. You can check out the latest on implementation through resources like the national CDFA Opportunity Zones Update and, a little closer to home, Opportunity Virginia.
But let’s get back to the question of how Opportunity Zones come into play. Main Street is a place-based strategy to support entrepreneurship in your own commercial district. When overlapped with an OZ, an added layer of incentive is created to positively impact an entrepreneurs’ location decision or fill a gap to fund a successful startup. In that case, the Fredericksburg Food Co-op is developing an OZ Fund program to help raise the $1.5 million it still needs for the grocery store it plans to open next year.
Keep the creative Main Street OZ funded projects coming! Tune in next week for a companion post on resources that can help put your local OZ to work.