CASPER, Wyo. — The Casper City Council passed a resolution during their Tuesday, April 16 meeting that approves a contract for professional services with the Casper Area Economic Alliance, Inc. to help Casper, Mills and Natrona County secure some grant funding for “Economic Opportunity Zones.”
The City of Casper will contribute $10,000 of the $50,000 CAEDA says it needs to contract a consulting firm to help attract funding to Casper..
“The purpose is to hire a consultant to assist with identifying and pursuing grant funding in four State of Wyoming and United States Treasury designated Opportunity Zones in the Casper Merto Area,” a memo in Council’s work packet explains CAEDA’s request.
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The “Opportunity Zones” are part of a tax incentive plan created by the 2017 Federal Tax Cuts and Jobs Act and meant to attract investment to low income areas, according to CAEDA Vice President of Business Development Medical and Finance Sabrina Foreman.
Foreman explained that investing capital gains in the “Opportunity Funds” allows investors to defer paying capital gains taxes.
“A Qualified Opportunity Zone Fund is an investment vehicle organized as a corporation or partnership for the purpose of investing in Opportunity Zone property,” CAEDA’s website says.
“Opportunity Zones are census tracts that are targeted geographic districts that allows investors to receive substantial tax breaks for investment capital,” explains CAEDA’s website. “Investors must invest through newly created Opportunity Funds (OF) or reinvest capital gains from existing investments to defer/reduce capital gains.”
The 2017 Federal Tax Cuts and Jobs Act authorized the governor of each state to create the zones. Former Wyoming Governor Matt Mead identified 25 such zones in Wyoming, including four in Casper.
Those zone designations were certified by the U.S. Treasury Department on June 14, 2018, according to CAEDA’s website.
Foreman explained that the deadline for investors to participate in an “Opportunity Fund” is Dec. 31, 2019. For this reason, and in order to ensure that Casper takes the initiative and doesn’t fall behind other communities looking to attract investors, Foreman said CAEDA wants to contract a consulting firm to help attract investors.
Therefore, CAEDA asked the City Council and the Natrona County Board of County Commissioners to contribute $10,000 each toward contracting a firm. CAEDA has already gotten a $10,000 commitment from the Town of Mills and a $20,000 commitment from the Economic Joint Powers Board.
Investors can receive various tax benefits from investing in the zones, according to a Local Initiatives Support Corporation and New Market Support Company document Foreman provided.
For the first five years of an investment in an “Opportunity Fund,” the capital gains taxes are deferred, so long as the investment is not sold or exchanged, the document states.
Investments that are held for 5-7 years see benefits above ten percent of tax on existing capital cancelled. The document adds that investments held from 7-10 years can defer capital gains tax payments until Dec. 31, 2026 and benefits above 15 percent of tax on existing capital is cancelled.
Investments that are kept ten or more years pay no capital gains taxes on the “Opportunity Fund” investment, the document adds.
CAEDA’s website lists the four zones that received approval in Casper.
“The zones in Casper that were approved include the census tract south of Hwy 20/26 to west of Poplar St. to north of W. Yellowstone Hwy and Poison Spider Rd. and east of Robertson Rd,” the website reads. “The second tract is south of Yellowstone Hwy and Poison Spider Rd to east of Robertson Rd to north of the North Platte River.”
“The third zone touches the North Platte River on its north side, to the west of Poplar St, to north of CY Ave and east of SW Wyoming Blvd. The fourth zone is the easternmost zone which includes Casper’s downtown area from east of Poplar St to south of the North Platte River to west of S Beverly St. and north of E Yellowstone Hwy and Collins Dr.”
Foreman explained that the types of investments that could be included in an “Opportunity Zone” are varied. She said that things like grocery stores, affordable housing developments, things like IT companies, conference centers and more could all potentially be the aim of an investment fund.
“It’s not just limited to real estate,” she said. “One of Casper’s ‘Opportunity Zones’ is in North Casper, so it could be something like investing in a grocery store there.”
Foreman explained that while investors may want to participate in the “Opportunity Zones” for the tax benefits, they’d also be likely to invest that money carefully.
“‘Where am I going to get the most bang for my buck?’” she said investors would be asking themselves.
Foreman said that she thought Casper was well-suited to attract investors. She pointed to things like Casper’s downtown revitalization efforts, the Biathlon trails on the mountain, the Hogadon Lodge and other community assets as things that might attract investors nationwide.
She pointed to the Dec. 31 deadline as a reason to get moving on the effort. She added that Casper was also poised to get out ahead of other communities if it acts fast.
“If we don’t get Casper out in front, all these other communities are going to be ahead of us,” she said.