Columbia County 'Opportunity Zone' designation opens door to development

COLUMBIA COUNTY—In April of 2018, Governor Jay Inslee approved 139 census tracts in 36 counties for Opportunity Zone status. One of those designations included the majority of Columbia County and allows the county to offer special federal tax breaks to encourage development and job creation.

The Opportunity Zone program was a bipartisan proposal in Congress incorporated into the U.S. Tax Cuts and Jobs Act. It allows the governor of every state to designate up to 25 percent of eligible census tracts as Opportunity Zones – areas that are struggling economically.

Investors can defer paying taxes on capital gains – money made from sales of assets such as a home or business – that are invested in Qualified Opportunity Funds which are in turn invested in “distressed communities.” Investments are intended to provide a boost to economic development by supporting projects that bring affordable housing and businesses that offer living-wage jobs.

Columbia County Planning Director Meagan Bailey sees the program as a big win for the county.

“Columbia Pulp, wind turbines, expansions at Seneca and developments at Blue Mountain Station have all brought new developments and contributed to an overall increase to our tax base, but we’re still falling short,” Bailey said.

“While some may consider this designation insulting and say that it paints Columbia County in a negative light, especially considering the progress the county has made in recent years, I think it is a good thing. The Opportunity Zone designation may prove to be a much-needed economic boost the county needs,” she added.

Investors who keep their money in the fund for five years can avoid paying taxes on 10 percent of the gains they invested. That exclusion increases to 15 percent for investors leaving their money for seven years and those that maintain the investment for 10 years or more can avoid paying any taxes on capital gains earned from the fund.

To qualify for Opportunity Zone status, a tract must have an individual poverty rate of at least 20 percent and median family income up to 80 percent of the area median. A total of 555 census tracts in Washington met eligibility criteria, though only 130 could receive the designation, according to the Department of Commerce.

Bailey said the designation allows Columbia County to offer multiple financial and intrinsic selling points to developers looking at the county.

“New industry is driving an increased need for residential units and we need someone to invest in new housing for the community. Existing and new incentives offer financial gain to investors who contribute to private investments in the county, with straightforward, bottom-line financial advantage. The county offers a comfortable and beautiful living opportunity where local business is still supported, the great outdoors abounds, and farmers are still local. And permitting is relatively easy, with our approachable and active planning department,” she said.

A map of designated Opportunity Zones can be found at https://go.bakertilly.com/contactbtc0618