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SALT LAKE CITY — Across the state of Utah are areas where significant economic development is possible given the right capital investment.
In June, the Governor’s Office of Economic Development, in coordination with the Utah Department of Workforce Services, announced the designation of nearly 50 "opportunity zones" from the U.S. Treasury Department. Created by federal legislation, the Opportunity Zone Program is a tax incentive designed to boost investment in low-income areas.
The program directs governors in each state to select areas as opportunity zones from a pool of low-income census tracts, which would then be eligible to use new tax incentives to attract long-term development in poor areas lacking infrastructure and jobs.
The plan provides organizers in a Qualified Opportunity Fund preferential capital gains treatment by temporary tax deferment.
Jeremy Neilson, CEO of Assure Services, said his company is helping to streamline the process that will help foster investments in low-income areas in the Beehive State and around the country. The Cottonwood Heights firm assists and administers investment entities by devising customized solutions for designated opportunity zones that ensure compliance with federal and state regulations.
"What the regulations are really after are startup companies and growth companies," he said. "It's really structured for that company that goes from five employees to 50 to 500. And real estate (development) is also well-positioned to take advantage of (the opportunity zones) — could be housing, a hotel, could be a hospital, those types of real estate projects."
He noted that high-growth companies such as software, technology, mobile or life sciences businesses are typically more likely to profit from choosing opportunity zones because of the long-term benefits they would reap.
"This program is aimed at those that are going to grow and develop lots of jobs," Neilson said.
The final list of opportunity zones was compiled to provide a balance for the benefit of both rural and urban communities that met the criteria from the U.S. Treasury Department. One of the main reasons for designating opportunity zones was to, in part, support the needs of rural areas. In Utah, 19 of the 46 designated zones were chosen from rural communities.
"Our goal is economic prosperity for all Utahns. Opportunity zones will go a long way in helping to support growth in economically distressed areas throughout the state," said Gov. Gary Herbert in a statement. "By working with these communities, the zones will attract more businesses and new investment."
In Utah, locations were selected in various areas around the state, with five locales in Salt Lake County, including the capital city's northwest quadrant. Meanwhile, Provo and Ogden each had four locales designated for the program, with the rest spread throughout the state.
"By identifying areas that are ripe for potential investment, opportunity zones will certainly help nudge these local economies in the right direction,” said Ginger Chinn, managing director of urban and rural business services for the Governor's Office of Economic Development. "This is a very exciting development opportunity for both our urban and rural areas."
