Officials optimistic on 'Opportunity Zone' program
In a business environment where every dollar counts, Sumter and Lee County officials are hopeful a new federal tax incentive program will help spur industrial and commercial development in their communities by companies.
Created in part by U.S. Sen. Tim Scott, R-S.C., a new Opportunity Zones program recently passed in a $1.3 trillion spending bill in Congress to encourage long-term private-sector investment in low-income census tracts across the U.S.
Of South Carolina's 1,097 census tracts, 538 - 49 percent - of those communities were designated as eligible, low-income tracts for the Opportunity Zone status by the U.S. Treasury Department, based on census data criteria.
States were allowed to select 25 percent of eligible communities for the program, narrowing South Carolina's to 135 areas from all across the state. Each of the state's 46 counties has at least one proposed zone. The sites are a mix of poorer rural areas across the state and, in some cases, ripe business real estate in suburban counties just outside major cities such as Charleston.
According to Jay Schwedler, president and CEO of Sumter Development Board and TheLink, which also represents Lee County, Sumter has three tracts nominated in the program, including the U.S. 521 South corridor that already has major manufacturer Continental Tire of the Americas, an industrial area along the Lafayette Drive corridor and a portion of the downtown historic district south of Liberty Street.
The poverty rate in these three tracts in Sumter County is 23.4 percent, 26.7 percent and 26.5 percent, with a total population throughout the three of 9,682. In the two Lee County tracts, the poverty rates are 32.8 percent and 31.6 percent with a total population of 9,735, according to the program's interactive map on its website.
Other information included for the public online about each tract includes demographics, labor force participation rate, unemployment rate and median household income.
These areas will be eligible for tax incentives designed to encourage companies to create businesses - both industrial and commercial - in these tracts.
The program also encourages private-sector investors to keep their businesses in these communities, offering more incentives the longer they stay.
Schwedler said the program is still in its early stages but that it will be an economic development tool to encourage growth in lower-income areas.
He emphasized the program isn't incentive money from the federal government - it is private-sector investment and taking capital gains and investing them into a fund. Ultimately, those investments and investors receive special tax incentives.
"The benefit is they get the tax break, but they can only spend their money in these Opportunity Zones," Schwedler said.
According to Schwedler, Lee County has two tracts nominated in the program - both of the county's industrial parks (the I-20 Industrial Park and James Industrial Park) off Interstate 20 and downtown Bishopville.
Lee County Administrator Alan Watkins said he thinks the program could be a good opportunity to encourage industrial investment in Lee since different areas in all the state's counties were nominated. For example, industrial parks near interstates in the state's major cities likely didn't meet the low-income thresholds to qualify for the opportunity zone program.
"There may be an area in Greenville as an opportunity zone, but that area might not be the most attractive for an industrial development," Watkins said. "In Lee County, our industrial parks are located right on the interstate. If that is something a prospect is looking for, that may be something else to separate us from a Greenville, Charleston or Lexington area."
Schwedler said the next step in the process is for his team to encourage private investors to look at the two counties' zones.
"There are 135 zones in the state, and I'm sure there's lots of opportunities across the state," Schwedler said, "but we feel in the two counties we represent the tracts that have been nominated are ripe for investment and redevelopment."
ON THE WEB:
For more information on the Opportunity Zone program, go to:
By: Bruce Mills
Source: The Sumter Item
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