(From Press Release) – The City of Davis is the pleased recipient of a designated Opportunity Zone. Established by the Federal Tax Cuts and Jobs Act of 2017, Opportunity Zones are an economic development tool designed to spur economic development and stimulate investments and job creation in low-income areas by providing tax benefits to investors. In June 2018, the U.S. Treasury certified 8,761 U.S. Census Tracts as Opportunity Zones, including the 879 nominated by California. These designations are in effect for a 10-year period, until 2026.
“We’re pleased to have this opportunity to offer tax advantages for new investments in our community,” said Davis Mayor Brett Lee, “this Opportunity Zone designation will provide additional incentives for business development benefitting the local neighborhood, broader community and investors.”
The Davis Opportunity Zone (U.S. Census Tract 106.02) is approx. 0.8 square miles in size, bordered by the north/south UPRR line on the west, L St. and Pole Line Rd. on the east, Covell Blvd. and 5th Street on the north and I-80 to the south (see map below).
The key benefits of this Opportunity Zone and new Qualified Opportunity Zone Funds are the capital gains tax credits now available for a wide range of eligible business investments that may attract new private investment and funding opportunities to our community. Investors can obtain tax benefits, even if they do not live, work or have a business in an Opportunity Zone. Investments made by individuals in any designated Opportunity Zone through any Qualified Opportunity Fund, are allowed to defer or eliminate Federal taxes on capital gains until the date an investment is sold or exchanged, or December 31, 2026, provided the gain is reinvested in a Qualified Opportunity Fund. IRS regulations for how these funds will work are still pending.
Those interested in learning more about Opportunity Zones or Qualified Opportunity Funds should visit the California Opportunity Zone Portal at https://opzones.ca.gov/ and confer with their accountant or qualified financial advisor. Those interested in Opportunity Zone investment projects should visit the California Opportunity Zone Marketplace https://beta.oppsites.com/about/california
City Manager Mike Webb noted that “The City greatly values this Opportunity Zone designation and the potential for economic stimulus that it presents,” and “our primary role is to make sure everyone in the community is informed about the designation and investment opportunities it can provide.”