PIQUA — On April 19, the City of Piqua received official notification from the State of Ohio and U.S. Treasury that the census tract including the Southview Neighborhood, Sherry Industrial Park and the adjacent township property has been designated as a Qualified Opportunity Zone.
In March, Ohio Gov. John R. Kasich listed the area in his recommendations of eligible census tracts for inclusion in the newly created “Opportunity Zones” to the U.S. Treasury. Only 25 percent of eligible tracts received designation as an Opportunity Zone.
“The Piqua census tract designated as an Opportunity Zone includes portions of downtown and the riverfront, as well as existing industrial and commercial sites,” stated Justin Sommer, assistant city manager and economic development director for the City of Piqua. “It is the only known Opportunity Zone in the state to include an interstate exchange with adjacent greenfield development sites.”
Opportunity Zones are designed to spur economic development by providing tax benefits to investors to re-invest their unrealized capital gains. Investors can receive a temporary deferral of taxable income for capital gains reinvested into an Opportunity Fund, and, if held for at least 7 years, an exclusion of up to 15 percent of the original gain from taxation. An investment in the zone is eligible for a permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years.
“We believe this new economic development tool will unlock new capital for investment into our current projects,” Sommer stated. “The new investment will accelerate our growth and revitalization of the riverfront.”
Investors should work with their tax advisors to understand the advantages of investing in Opportunity Funds. Over the next few months, the Treasury Department and the Internal Revenue Service will be providing further details, including additional legal guidance, on this new incentive. More information will be available at Treasury.gov and IRS.gov.