By Stacy Miller, Chair of the Oxnard Chamber Board of Directors
In case you missed it, a federal bill aimed at attracting private investment was passed at the end of December 2017 (Tax Cuts & Jobs Act). The bill allows the Governor to designate certain census tracts as Opportunity Zones.
The good news is that there are three of these areas that have been designated in Oxnard: Rose Park, Colonia and Five Points Northeast. These areas, which were selected by the state and federal government based on areas of poverty, include: the area east of Rose Avenue to the eastern city limits between Highway 101 and Fifth Street, plus an area south of Fifth Street that is bounded by Oxnard Boulevard and Rose Avenue.
What this means is that investments made by individuals through special funds in these zones would be allowed to defer or eliminate federal taxes on capital gains; a great incentive for private investment! The designated tracts include a mix of residential, commercial and manufacturing so investors can tailor their investments in these areas. The designation of an Opportunity Zones was hailed by the City of Oxnard as “a tool to stimulate economic growth.”
By way of background, the Governor can designate up to 25% of census tracts that either have poverty rates of at least 20% or median family incomes of no more than 80% of statewide or metropolitan area family incomes.
There are 3,516 census tracts in 54 California counties that would qualify under one or both of the mandatory criteria, allowing the Governor to designate up to 879 tracts. As census tracts are designed to capture geographic areas of around 4,000 people, more than three million Californians would potentially be located in one of these Opportunity Zone areas.
The Opportunity Zone provides investors with opportunities to purchase and rehab properties, start a business or to build on raw land. This is attractive to investors because they can defer, reduce or even eliminate taxes paid on capital gains income by investing in a special qualified opportunity zone fund.
It’s a great time to invest in Oxnard! The City of Oxnard stands ready, willing and able to discuss the Opportunity Zone program with interested investors. To find out more, contact the City of Oxnard’s Economic Development department at 805-385-7407.