14 areas in Boone County eligible for federal ‘Opportunity Zone’ project
COLUMBIA, Mo. (KMIZ)
Several tracts of land across north and east Columbia qualify as non-rural investment locations that were approved by the U.S. Treasury Department on Thursday.
Through the program, private investors who earn capital gain from the sale of an asset, such as real estate, stock, or a business, can reinvest that gain into Qualified Opportunity Funds within 180 days. The funds can then be used to finance projects within Opportunity zone locations. More than 130 were approved in the state.
“Missouri’s Opportunity Zones will help attract investment that strengthens communities, creates jobs, and supports lasting economic growth,” Gov. Kehoe said in a statement Thursday.
The projects can vary as long as they follow federal guidelines and local zoning rules.
"It could end up with retail establishments, it could end up with more housing, it could end up with more industrial-type buildings, there's a number of ways it can go, whether it's an existing building or a new building," REDI President Paul Eisenstein said.
Tax incentives include delaying taxes on original capital gains for up to five years, reducing the taxable portion of those gains by 10% after five years, and exempting new appreciation from capital-gains taxes after a 10-year hold.
"These have to be long-term projects, where the owner is investing in the property for the long term, and that's when they get those federal tax incentives," Eisenstein said.
The program was initially active in 2018 with the Opportunity Zones 2.0 program adding new benefits for rural growth, including a 30% tax break after five years instead of 10%
Census tracts must qualify as low-income or rural to qualify for the program. Low-income tracts are those where median family incomes are below 70% of the state or metro median and those places with a poverty rate of 25% or higher and a median family income below 125% of the state or metro median.
All approved tracts will become eligible Jan. 1, 2027, with investors qualifying for tax incentives until 2037.
To qualify as rural, a tract must not be in an area with a population greater than 50,000.
"We think of this as a tool in the economic toolbox that can really increase more quality jobs, more housing for workers who need affordable housing and also retail amenities," Eisenstein said.
Eisenstein added funds from the 2018 program were mainly used for residential projects.
"The prior 10 years was really around housing, and it really increased the amount of housing that was built in opportunity zones across the country and even here in Columbia and Boone County," Eisenstein said.
Most Mid-Missouri counties are participating in the program with at least one tract of land. Osage, Chariton, Montgomery, Macon and Gasconade Counties were not included in the Opportunity Zone designations. 14 tracts of land were accepted in Boone County.
"I think Columbia and Boone County is in a great spot for a growing community, people want to be here, we've had great expansion with our airport and with our university so we've got a great growing community," Eisenstein said.
