Opportunity Zones

9 Census Blocks in Monterey County are qualified Opportunity Zones (OZ) (8 in North County/Peninsula and 1 in South County). Track #14102 on the south/southeast edge of the City of Marina (northern edge of the former Fort Ord) is among them. Downtown Seaside has 2 large tracts, and the City of Salinas has 5.

Opportunity Zones (OZ) are an innovative, flexible, and bipartisan solution for catalyzing private sector-led economic growth. OZ were established by congress in the Tax Cuts and Jobs Act of 2017.

OZ offer investors three incentives for putting their capital to work in economically distressed communities:

  1. A temporary deferral: An investor can defer capital gains taxes until 2026 by rolling their gains directly over into an Opportunity Fund (OF).
  2. A reduction: The deferred capital gains liability is effectively reduced by 10% if the investment in the OF is held for 5 years and another 5% is held for 7 years.
  3. An exemption: Any capital gains on subsequent investments made through an OF accrue tax-free as long as the investor stays invested in the fund for a least 10 years.

There are three major components to Opportunity Zones:

  1. Investments: Opportunity Funds make equity investments in businesses and business property in Opportunity Zones.
  2. Funds: Opportunity Funds are investment vehicles organized as corporations or partnerships for the specific purpose of investing in qualified Opportunity Zones.
  3. Zones: States and territories designated 25 percent of their eligible low-income census tracts as Opportunity Zones.

There are 3 types of property eligible for Opportunity Fund investment:

  1. Stock of a qualified opportunity zone corporation;
  2. Partnership interest in a qualified opportunity zone partnership; and
  3. Business property used in qualified opportunity zones.
  • A qualified opportunity zone business must use “substantially all” of its tangible property within a zone and meet a few additional basic test.
  • Investments that do not quality include funds of funds, sin businesses, and financial institutions.
  • A substantial improvement test applies unless the business property is original use.

Updated 10/19/18: The Treasury Department today issued proposed guidance related to the new Opportunity Zone tax incentive. The tax benefit, created by the 2017 Tax Cuts and Jobs Act, is designed to spur economic development and job creation by encouraging long-term investments in economically distressed communities nationwide.

The proposed regulations released today clarify what gains qualify for deferral, which taxpayers and investments are eligible, the parameters for Opportunity Funds, and other guidance. The proposed regulations should provide investors and fund sponsors the information they need to confidently enter into new business arrangements in designated Opportunity Zones. The Treasury Department plans on issuing additional guidance before the end of the year.

See the links below for more detailed information and summaries:

How to Build a Youth Apprenticeship System

In Early July 2018, Bob Lanter, Executive Director of the California Workforce Association, Economic Development Consultant David Spaur, and SPR’s Senior Strategist for Capacity Building, Vinz Koller joined the Swiss Institute of Technology, Center on Economics and Management of Education and Training Systems (CEMENTS) annual Summer Institute for an in-depth exposure to the Swiss dual education system. Together with educators and policy makers from around the world, they worked on a reform case to build a youth apprenticeship system for California.

Monterey Bay Regional Economic Development Organizations

Achieving sustainable economic development is a team sport. Here in the Monterey Bay region there are a number of active organizations working to realize sustainable economic development. Each has its particular origins and reason for being, though most have a common focus on our core strengths in agriculture, education, military, recreation, tourism and/or information technology. The following is a short list of those organizations:

Institute for Innovation and Economic Development

The Institute for Innovation and Economic Development at California State University Monterey Bay provides a venue for innovative ideas, support for commercial transfer of research and technology, and a support network and training through a partnership with the Monterey County Business Council. The Institute also educates and builds the knowledge and capacity of economic development professionals, and enhances the well-being of the region by facilitating the development of long-term economic development strategies.

Monterey County Economic Development Department

The mission of the Economic Development Department is to plan, coordinate, and facilitate the County’s efforts to attract, retain and grow businesses and jobs in the County. The Department includes the Office of Redevelopment and Housing, the Workforce Investment Board and the Office of Economic Development. The Department is supported by the Monterey County Economic Development Committee, formed by the Board of Supervisors.

Monterey County Economic Development Committee

The primary purpose of the Economic Development Committee is to advise the Board of Supervisors on appropriate economic development policies, programs, and activities to ensure a Countywide perspective in support of a diversified economy, higher paying jobs and an expanded revenue base for local government services, while preserving and protecting the County’s agricultural, tourism, and education economic base in collaboration with cities.

Monterey Bay Economic Partnership

The Monterey Bay Economic Partnership is a nonprofit membership organization consisting of public, private and civic entities located throughout the counties of Monterey, San Benito and Santa Cruz. Our mission is to create a thriving region with quality jobs, excellent education, and a high quality of life for all residents, while preserving the natural beauty and healthy lifestyle we all share.

Monterey County Business Council

We are an alliance of business executives and professionals providing collaborative leadership to help people from business, government, education, and the community work together on countywide issues reflecting our organization’s strong commitment to the environment, economic vitality, and quality of life.