New community development program will offer funds for poor rural communities
Colleton County and the SouthernCarolina Alliance are waiting to see the nuts and bolts of how Opportunity Zones will work.
Sandra DeVoe-Bland, Promise Zone coordinator for SCA, said the federal government, primarily the U.S. Treasury Department and Internal Revenue Service, are still working on details of how the community development investment program will work.
She said that South Carolina U.S. Sen. Tim Scott and three other federal legislators introduced the Investing in Opportunity Act last year with a goal to revitalize economically distressed communities. “Communities that suffer from a lack of investment and business growth,” DeVoe-Bland explained. “Their hope was to facilitate new incentives for people to invest.”
The Opportunity Zones outlined by the legislative proposal became a provision of the Tax Cut and Jobs Act approved by Congress late in 2017.
It seeks, DeVoe-Bland said, to assist “low income communities that need an infusion of capital to be revitalized.
“They are trying to get people to invest in economic distressed communities, because on their own, they are not going to attract the normal investor,” she explained.
To accomplish that, the act enables investors to defer
paying taxes on capital gains if those capital gains are inve
sted in Opportunity Zones. Unrealized capital gains represent “a significant source of investment,” DeVoe-Bland said.
The federal government decided how many Opportunity Zones a state could have and gave the governors in each state the task of designating
opportunity zones in their state.
The plan implemented by S.C. Gov. Henry McMaster sought to have at least one census tract in each county containing low income residences designated an Opportunity Zone.
Colleton County has two census tracts designated Opportunity Zones. A total of 8,179 residents reside in Census Tract 45029970401 and Census Tract 45029970402.
Census Tract 45029970401 met the low income criteria, while Census Tract 45029970402 was designated because of its location contiguous to the first tract.
The two tracts straddle much
of I-95’s path through Colleton County, encompassing all of Walterboro and a large portion of northwest Colleton County.
As a community development incentive, the funds could be used for areas like infrastructure improvement and affordable housing. But economic development will play a major role in the community development mission with Opportunity Zones enabling workforce development, attracting new businesses and investing in startup businesses.
Significant is the fact that Colleton County’s Opportunity Zones include all six of Colleton County’s economic development tracts: Lowcountry Regional Airport Park, Colleton County Commerce Center, Rice Estate, Colleton Industrial Campus, Newsome Site, Colleton Venture Park and Bullard Site.
Asked if having the two zones contain the economic development sites was intentional or accidental, DeVoe-Bland said, “Believe it or not, it was just happenstance.” She points out that in the other counties within the SouthernCarolina Alliance, there are other census tracts with facilities in them that were not selected.
It was, she said, a happy accident. “It makes it more attractive for the potential investors.”
DeVoe-Bland added that she does not know if the team the governor put together to make recommendations for the Opportunity Zone designations purposely targeted the I-95 corridor. “The criteria the selection team used has not been shared,” she said.
Intentional or not, having a large portion of I-95 within the Opportunity Zone is a plus in attracting investment. When investors are considering Colleton County, she said, “I-95 will be a powerful sales pitch for it.”
When the call went out for eligible census tracts to be nominated for the Opportunity Zone designation, DeVoe-Bland said the SouthernCarolina Alliance nominated every census tract contained in the area’s Promise Zone.
The Promise Zone, another federal government program that identifies areas in the country in need of economic stimulus, is maintained by the SouthernCarolina Alliance with DeVoe-Bland coordinating that program that seeks to attract investment in community development projects.
The main difference between Promise Zones and Opportunity Zones is that Promise Zone designation has no funding associated with it. “With Opportunity Zones, there is funding,” DeVoe-Bland explained.