By Paul Myers @PaulM_SGN
VISALIA – Visalia leapt at the opportunity to advertise their Opportunity Zones on the northwesterly side of town.
Created by the Tax Cuts and Jobs Act of 2017, Opportunity Zones are a mechanism to provide tax incentives for investment in designated census tracts. Investments made by individuals through special funds in these zones would be allowed to defer or eliminate federal taxes on capital gains. And Visalia has had no trouble identifying where their zones are.
Two weeks ago, the City released their web page outlining the City’s Opportunity Zone as the entire northwest side of town. Visalia Economic Development Manager Devon Jones said the City has been trying to grow jobs and industry in that area.
“What we’re trying to focus on is generating jobs and grow this area which is why that northwest area was [selected] and that way we could say our entire industrial park was included in the Opportunity Zone,” Jones said.
But what the City would like to see is greater redevelopment in the Historic Oval Park area. Deemed Census tract 11 by the City, Visalia notes that the area around the park features a mix of opportunities including a commercial mixed-use corridor around the park, and downtown mixed-use corridor connecting downtown Visalia to the district.
“I think the oval is ripe for investment there’s a lot of culture around the oval and there’s food. It’s worth the investment and I think it’s a piece of downtown that is already a destination and could be more of a destination,” Jones added.
Jones attributed the current lack of development in Oval Park to its lackluster curb appeal.
“I think most everyone knows about Mooney and part of our downtown and there are other parts of town that you have spend some time here to appreciate,” Jones said.
Whether the zone has stirred any additional interest in that portion of the City, Jones says it has. Without elaborating, he added that businesses have shown interest in locating there. But he mentioned as well that the City is hopeful the Opportunity Zone designation will help existing companies realize additional investment.
“As most job creation stems from local growth, I’m hopeful this incentive will encourage investments into existing industries and also that the new regulations will encourage investments into small businesses and entrepreneurship growth as well,” Jones said.
Cities in addition to the County also have the opportunity to designate Enhanced Infrastructural Financing Districts (EIFD). Widely accepted as a Redevelopment Agency (RDA) 2.0, EIFDs can exist in an Opportunity Zone, or outside of an Opportunity Zone. It can be as large as the entire county or as small as a neighborhood. More specifically an EIFD is a form of tax increment financing. It does not represent an additional tax to the property owner. The County and other taxing entities would be dedicating a portion of future incremental property tax from new development into an EIFD for targeted catalytic infrastructure.
The Tulare County Economic Development Corporation, who helped define Opportunity Zone boundaries across the county, and the Industrial Park almost didn’t qualify. Paul Saldana, EDC director, said the State’s initial view of the Industrial Park did not meet their qualifications of an Opportunity Zone. Saldana said they made the case that it falls within the criteria of a low income community tract because its borders are contiguous with other low income qualifying zones.
Saldana said the onus to identifying Opportunity Zones fell to the states, despite its creation coming from federal legislation, and governors were tasked with determining what Opportunity Zones qualified. But governors’ offices were not given any criteria on what constitutes an Opportunity Zone. In California, Governor Gavin Newsom’s office published a list of zones and then revised the list based on local input.
According to Saldana, Newsome evaluated potential tracts based on disadvantaged status and low income. Tulare County had 35 eligible, of which 17 were approved.