Last year, Airway Heights was designated an “Opportunity Zone” for investors and developers. Now, the city is hoping to take advantage of the designation and is encouraging those investors to commit to a 10-year investment in the area and maximize their tax savings.
Opportunity zone designations were created by the Tax Cuts and Jobs Act of 2017 as an innovative approach to encouraging long-term private sector investments within select low-income communities across the country, according to Airway Heights staff.
Investors with capital that would otherwise trigger capital gains tax are permitted to join a qualifying fund, and depending on the duration of their investment in the Opportunity Zone, they could receive a step-up in the basis in their investment – resulting in a reduction of the capital gain – and avoid tax on the appreciation of their investment in the zone.
A press release from the city called the combination “a win-win for investors and the Opportunity Zone community that benefits from the newly developed business.”
According to city leaders, time is of the essence for those seeking that preferential tax treatment.
Current tax provision language means maximum benefit will be realized by investors who have transferred their capital to an Opportunity Zone fund by the end of 2019.
Funds have a 180-day period to designate which zones will be selected for their development projects — a window of time that, in the world of large-scale development and investment, is very, very small.
Because of that, there is a push by many Opportunity Zone communities, including Airway Heights, to get in front of fund investors and share their stories.
Airway Heights is among 138 other zones in Washington state, but is unique in that the entire city limits are within the zone. Within those limits are residential, commercial, and both light and heavy-industrial zoned land. As a result, the city says it’s prepared to offer benefits to a wide variety of businesses.
Airway Heights also offers freight transport via rail lines, nearby Interstate 90 and State Route 2 and the short drive to Spokane International Airport.
“The opening of our new $17 million recreation and aquatic center earlier this year was a turning point for the city,” City Manager Albert Tripp said. “We put a stake in the ground and committed ourselves to being first and foremost a community focused on the quality of life of our residents and the employees of our neighborhood businesses.”
Airway Heights has gained recent notoriety for its continued growth; the city has been named one of the fastest-growing municipalities in the county and the state.
“While we welcome both large and small businesses, we are especially eager to attract those that bring their families and their employees’ families,” Tripp said. “Belonging in Airway Heights means planting roots, either creating family memories or building a business that is connected to the community. We never want to lose our focus as a safe, friendly, family-based home.”
Shannen Talbot can be reached at [email protected].
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