After two Riverhead “opportunity zones” were approved by the U.S. Department of the Treasury in June, the town Industrial Development Agency and Community Development Agency hosted a workshop Wednesday at Hotel Indigo to share more information on how the program works.
“There was a lot of interest in it but there wasn’t a lot of information,” provided from the U.S. Treasury, said CDA director Dawn Thomas at the Town Board work session Thursday.
She said IRS regulations were adopted about a month ago and the workshop, attended by about 90 real estate agents, investors and officials from other towns, focused on what the rules are to participate in the program.
Downtown Riverhead and the Enterprise Park at Calverton are now considered opportunity zones. The newly created federal designation allows low-income census tracts to bolster private investment in underserved communities in exchange for tax credits. Developers must reinvest the money in those communities for at least 10 years and any capital gains taxes incurred on proceeds from a sale of the property would be forgiven, officials said.
“It gave us an opportunity to make a pitch for downtown and EPCAL,” Ms. Thomas said. “It’s a very exciting program because it really focused on areas that were low to moderate income that had trouble eliminating blight and attracting investment.”
Town Supervisor Laura Jens-Smith said the program gives developers more options. “It does not have to be an in-kind investment,” she said, and is not limited to property investments. “You can invest in the growth of the business also, which is wonderful especially if you have some startups or somebody you think is going to blossom over the next 10 years.”
According to Ms. Thomas, developers who take advantage of the program have 180 days to invest in a local project after a gain is realized.
She said the CDA office is available to help developers navigate the new regulations, as well as explore possible grants, IDA incentives and tax abatements. “Anything else that might facilitate investment in our community,” she said.
“Between the IDA and CDA we also have an inventory of what is available on the market,” the supervisor said, noting that the agencies can help guide developers towards properties that may be of interest for development.
Ms. Thomas agreed, adding that there’s potential to expedite processes such as obtaining a building permit. “The more we can enhance the benefits we can offer through this, the better we’ll be,” she said.
The projects are not limited to new development on vacant land, Ms. Thomas said. “We talked about reusing box stores on [Route] 58 like Kmart and Walmart and also we have the Elton Street property, the old Luxfer Magtech facility,” she said. “Those are all in the zone.”