Economic Developers Among Those Attending Opportunity Zone Conference
NCEDA was among several North Carolina groups that helped organize a day of discussions about Opportunity Zones, the new federal program intended to direct unrealized capital gains into low-wealth rural and urban economies. The Federal Reserve Bank of Richmond was the primary sponsor of the event, which was held on December 13 at NC State University in Raleigh. Governor Roy Cooper, Commerce Secretary Tony Copeland and Jack Cecil, president of Biltmore Farms, were among those who spoke at the event.
North Carolina’s consistently strong population growth alone makes it an appealing destination for investment, economist Mike Walden told the gathering. “People are voting with their feet,” he said. Demographers expect the state to add another three million residents by 2050. “North Carolinians are very entrepreneurial,” Walden said. “People here are interested in business and economic development.” The state is affordable – with a cost-of-living that is about five percent below that of the US as a whole. A wide range of indoor and outdoor amenities – from state parks to NCAA basketball – make North Carolina attractive for residents and businesses. “I think we have a good package here that makes for a good investment environment,” Walden said. Agribusiness, biotechnology, tourism, alternative energy and retirement living are among the industries to watch, Walden said. So, too, is what he calls “artisanship.” “There’s a revolt among some consumers against mass-produced products,” he said. “They want special things that are customized for them.” Walden cited the craft beer industry as an example. It also impacts food and clothing. “A lot of it is labor-intensive, and I can see that fitting into some of our rural areas.”
Gregory Clements of Novogradac & Co., a national accounting firm based in San Francisco, said Opportunity Zones have “the potential to be the largest economic development incentive in US history.” The program aims to unlock unrealized capital gains and entice investment into less wealthy parts of the country. Opportunity Zones cover about 11 percent of the US. “We see a lot of interest in commercial real estate development in Opportunity Zones,” Clements said. One benefit could be investment in the expansion of businesses that already lie within a zone. “One exciting thing we like to think about is combining this incentive with other incentives,” he said, citing New Market Tax Credits as one example. Despite the release of initial US Treasury guidance last fall, there remain many details about the Opportunity Zone program to be ironed out. “There’s no doubt we’re flying the plane while we’re building it,” Clements said. Click HERE to access Gregory Clements’ presentation.
“The Federal Reserve is strongly committed to making sure we exercise every possible opportunity to spur prosperity in these areas,” said Jeanne Milliken Bonds, senior manager for regional community development outreach at the Federal Reserve Bank of Richmond, which covers Maryland, Virginia and the Carolinas. Click HERE for additional information about the program.