Lower Township Prepares for Opportunity Zone investment

VILLAS – Lower Township Manager James Ridgway updated council about a Dec. 12 meeting of more than 100 South Jersey business leaders and government officials at the Gov. Florio Center for Public Service for an Economic Development seminar on the new Opportunity Zone incentive program hosted by the Southern New Jersey Development Council (SNJDC).
According to a release, attendees included professionals committed to the economic growth of the South Jersey region eager to learn more about the potential of the Opportunity Zones program, such as the one in Lower Township, designed to spur economic development and to create new jobs in certain distressed communities
Lower Township was listed by Gov. Phil Murphy as one of the Opportunity Zones for the state. The goal is to encourage long-term investments in low-income urban and rural census tracts nationwide.
In them, investors can take advantage of unrealized capital gains. Under the law, investors will be able to defer taxes for investing unrealized capital gains into so-called “opportunity funds” that can be tapped for development or business expansion in the designated zones.
Those who invest in the funds will also be eligible for substantial tax breaks on those investments.
“We are excited for what this will bring for Lower Township. And it isn’t just the airport that is in the opportunity zone, it stretches all the way to Bayshore Road,” stated Ridgway.
The panel discussed the latest regulations, mechanics of opportunity zone investing, tax implications and how to better prepare communities for investments.
One investment example is that opportunity zone investors benefit from deferring payment of the capital gains tax that would be paid in 2018 until 2026.
The tax incentive would allow a modest reduction in capital gains taxes in exchange for holding Opportunity Fund investments for five to seven years.
If investments are held for 10-plus years, gains accrued on the Opportunity Fund investment during that 10-year period will not be taxed, further incentivizing patient capital.
Lower Township has hired James Rutala of Rutala Associates to work with the municipality in utilizing this initiative for Census Tract 218.04.
The township has also entered in a shared service agreement with the county for the state Economic Development Authority Innovation Challenge grant.
“We are looking for shovel-ready projects now,” stated Ridgway.