To spur economic growth and development, Missouri nominated more than 100 areas, including portions of Jefferson City, to receive investment incentives through a new federal program.
Opportunity zones are low-income areas with slow job growth that would receive tax incentives to encourage long-term investment and job growth, said Maggie Kost, Missouri Department of Economic Development director of communications. Under the opportunity zone program, investors could receive treasury-certified capital-gains tax deferrals based on their investments in qualified opportunity zones.
"The opportunity zones program will help spur new investments in communities where they're needed most," U.S. Sen. Roy Blunt said in an April 10 news release. "By bringing investment incentives to underserved areas, the program will help create more jobs, drive economic growth, and improve the quality of life for families across our state."
Under the 2017 Tax Cuts and Jobs Act, each state governor could nominate up to 25 percent of eligible census tracts as opportunity zones and submit these nominations to the U.S. Department of Treasury. Missouri nominated the maximum number of census tracks it could - 161.
Local Missouri governments nominated possible opportunity zones to the Department of Economic Development, providing information about development plans and recent or future investment plans.
The Department of Economic Development received more than 160 applications for opportunity zone nominations, Kost said, and dwindled that number down by using the information provided by the local governments. The Department of Economic Development also looked at investment plans for the census tracts and how opportunity zones could benefit the nominated areas before sending the nominations to the Department of Treasury.
Jefferson City and the Jefferson City Area Chamber of Commerce partnered to submit an application. Chamber President Randy Allen said they nominated three census tracks, which includes the downtown area. The tracks are roughly bordered by the river, Clark Avenue, Ellis and Southwest boulevards, and Industrial Drive.
To be considered an opportunity zone, the census tract must have a poverty rate of at least 20 percent, or the tract's median family income not does not exceed 80 percent of the metropolitan area's and statewide median family income, or the tract can't exceed 80 percent of the statewide median family income in non-metropolitan areas.
If a census tract is in a high-migration rural country, then it can't exceed 85 percent of the statewide median family income. A high-migration rural county is a rural county that "during the 20-year period ending with the year in which the most recent census was conducted, has a net outmigration of inhabitants from the county of at least 10 percent of the county population at the beginning of such period," according to the Department of Economic Development.
"They're looking for basically economically depressed areas," Allen said. "So you would think that downtown would not be a depressed area, but the reason that it is is because that's where a lot of low-income people live. So it's more about residents in that census tract than it is about the businesses in that census tract."
Jefferson City has not been selected as an opportunity zone, as this is only a nomination, Allen said, and he would not know how the program would impact the community until the Department of Treasury announces whether to accept one or more of the nominated census tracts.
"All we've done is the first step," Allen said.
It is unknown when Missouri will learn whether its nominations were selected for the opportunity zone program, Kost said.
The deadline to submit nominations was March 21 unless the state requested a 30-day extension to submit nominations. The U.S. Department of Treasury, which will administer the program, has 30 days from the submission date to designate the nominated zones.
The Department of Treasury announced the first round of opportunity zone designations April 9 for 18 states, and Missouri was not one of them. Its website notes there were communities nominated by the March 21 deadline and the department will make future designations at a later date.
Census tracts in Columbia and Sunrise Beach also were nominated as opportunity zone locations.