Dubroff: Opportunity Zones proliferate on the Central Coast
You may think of the Central Coast as living in paradise, but some economic experts are beginning to think “OZ” is a better description.
The Business Times has been writing about Opportunity Zones, hence the “OZ” moniker, since they were introduced as part of the 2017 Tax Cuts and Jobs Act during Trump 1.0.
The OZ program was launched with a lot of fanfare because it eliminated or deferred federal capital gains taxes on investments located in designated areas.
These days OZ projects are getting a second look thanks to the One Big Beautiful Bill Act signed into law last year that makes the program permanent; the benefits for property, equipment and even inventory located in an OZ are substantial.
California’s Go-Biz office began circulating maps of OZ-designated census tracts around the first of November and local eco/devo experts are beginning to take note of the fact that OZ benefits extend far beyond typical low-income areas.
In Thousand Oaks, for example, the high proportion of income devoted to rent was one factor that earned a Go-Biz designation for an area that includes its recently announced civic center redevelopment, a multi-year, perhaps multi-billion-dollar project.
“We’ve spent years laying the groundwork for the next chapter of Thousand Oaks Boulevard. This designation adds yet another powerful new incentive to attract private capital, accelerate redevelopment and build on the tremendous momentum we’ve established,” Justine Kendall, the city’s economic development manager, wrote in an email.
Earlier this year, the Business Times joined other Ventura County organizations in advocating for the re-inclusion of a census tract that includes the heavily polluted former industrial site in Oxnard and areas near the Port of Hueneme with a lot of potential, but that was deleted in earlier map drafts.
The protest was successful and that tract, known as 4715, was included in the new OZ program map, and Kendall took note of the substantial benefits across the Tri-Counties.
At the time, we wrote that the tract was omitted “at precisely the moment its potential for environmental recovery, housing production and port-driven economic growth is highest. We believe the Port and its surrounding assets are an undervalued economic asset,” we wrote.
Kendall said that the new OZ maps are likely to attract capital up and down the Central Coast. “Economic investment doesn’t stop at city boundaries. When communities across Ventura County have new tools to attract investment, we strengthen the competitiveness and long-term prosperity of our entire region,” Kendall wrote in her email.
Indeed, the new OZ maps include the urban core of San Luis Obispo and Santa Maria as well as large areas of the City of Santa Barbara and unincorporated areas of all three counties.
The downside to programs like OZ is that they are complex and require an understanding of Treasury rules; they will favor organizations built to take advantage of tax rules and equipped with sophisticated accounting tools.
But operating a business on the Central Coast is not for the faint of heart; those who succeed are capable of understanding the complexities of the back office and presenting simple solutions to customers.
The OZ program has a lot of potential for attracting outside capital and providing incentives for housing developments and business expansion.
OZ credits could be attractive for startups looking to expand out of the garage into a permanent home. The incentives could also appeal to dozens of Los Angeles companies looking at the incoming mayor and her anti-business rhetoric and seeking a safer haven in Ventura County and perhaps beyond.
• Henry Dubroff is the founder, owner and editor of the Pacific Coast Business Times. He can be reached at [email protected].
