Pagosa Housing Partners (PHP) hosted a panel that discussed the federal Opportunity Zone Program and other economic incentives for investing in projects around Pagosa Springs at its monthly CommunityTalk on Oct. 28.
The group also presented the Opportunity Zone Prospectus For The Greater Pagosa Springs Area, which explains the Opportunity Zone and other economic opportunities in the area.
The panel comprised Pagosa Springs Town Manager Andrea Phillips, Pagosa Springs Area Chamber of Commerce Executive Director Mary Jo Coulehan and Region 9 Economic Development District Program Manager Heather Otter.
All three have been working on the local Opportunity Zone Program in Pagosa Springs and contributed to the prospectus.
According to an email from Coulehan, Opportunity Zones “provides a federal tax incentive for investors to invest in communities through favorable treatment of reinvested capital gains and forgiveness of tax on new capital gains.”
“For all intents and purposes, it was to say, ‘Let’s take a look at some of the communities that might have missed out on some of the investment and development and redevelopment over the past decade and try to inject some private capital into these areas,” Otter said, explaining Opportunity Zones at the event.
Phillips explained that communities that have Opportunity Zones have bundled that offering with economic incentives of their own, including Archuleta County and the Town of Pagosa Springs.
Phillips explained that, earlier this year, the town and Archuleta County developed a Development Incentives Policy Statement and that some of those incentives are featured in the prospectus.
“Property tax reimbursement, sales tax reimbursement, job creation credit[s], cash bonuses for every job created that pays a livable wage and above,” Phillips noted of some of the local incentives.
The town, county, Pagosa Springs Community Development Corporation, Region 9 and PHP recently released the Opportunity Zone Prospectus, which details other state and local incentives separate from the Opportunity Zone.
The prospectus includes the following business incentives that can be available for investing in projects around Pagosa Springs:
• Up to $10,000 cash payments per net new job created and maintained.
• Tax exemptions for both business and employee state income taxes.
• Fast track to county and town services.
• Job-creation grants.
Coulehan reported that Pagosa Springs was nominated to submit to Forbes Magazine and the Sorenson institute for consideration in the “Top 20 Opportunity Zone Accelerators” list.
She noted that the list highlights the top 10 Opportunity Zone communities and the top 10 Opportunity Zone investors.
“The exciting part of that is, it puts us in front of a lot of potential investors,” Coulehan said.
Coulehan noted that the community around Pagosa Springs faces some infrastructure challenges, but explained that can be a draw for potential investors.
“What we consider our drawbacks and our challenges are investment opportunities. So, for example, we are struggling with housing as many, many communities in Colorado are, and across the nation, but for investment companies, that’s an opportunity for them,” Coulehan said.
Otter said the “little conversations” locals have with others could lead to developers realizing the opportunity that lies in Pagosa Springs’ Opportunity Zones.
“There may be somebody that’s interested in selling a piece of their property here, probably should find out if that’s in the Opportunity Zone because there may be something that allows them to take those capital gains from that property and combine it with a project they’re interested in,” said Otter, adding, “To me, it’s the little conversations in our area, that when you know more you can do more. You can offer more.”
According to the Opportunity Zone Prospectus, incentives for investing in the Opportunity Zone are:
• No long-term capital gain taxes for an investment held for 10 years.
• Returns from investments made in Opportunity Zones are typically 36 percent higher when compared to an alternative investment with an 8 percent return, according to the Economic Innovation Group.
The full Opportunity Zone Propsectus can be viewed at https://www.scan.org/uploads/2019_Pagosa_Springs_OZ_Prospectu.pdf