Virginia Gov. Ralph Northam joined business people, investors, financiers and government officials in Charlottesville on Tuesday to kick off Opportunity Virginia, a statewide initiative to bring economic development into distressed and disadvantaged communities.
“I want to do everything I can to make sure Virginia stays the most business friendly state,” Northam told the crowd of about 300 gathered at the University of Virginia’s Darden School of Business to mingle, network and negotiate at the kickoff.
“We have a lot of people in Virginia who say ‘I’m from the Eastern Shore’ or ‘I’m from Southwest Virginia’ and what we want is to have people say ‘I live in the Eastern Shore’ or ‘I live in Southwest Virginia,’” Northam said. “I want everyone, no matter where they live in Virginia, to have access to a good job.”
Opportunity Virginia is designed to bring together localities, financiers and investors in order to develop project ideas and create investment in specific areas of the state. Northam introduced the initiative in April.
Opportunity zones provide development tax benefits as part of the 2017 Tax Cuts and Jobs Act. According to the Virginia Department of Housing and Community Development, the zones allow investors with capital gains to invest long-term in low-income urban, suburban and rural census tracts.
According to the Internal Revenue Service, taxpayers may defer taxes on eligible capital gains by investing in a qualified opportunity fund that supports development in a zone.
“We are focused on pursuing economic growth that is inclusive and equitable, not just market-driven,” Northam said. “This partnership will bolster our efforts to improve economic opportunity for people in communities that have traditionally been underserved.”
Opportunity Virginia is supported by Virginia Community Capital and LOCUS Impact Investing. The nonprofit bank was established in 2006 as a community development financial institution with an initial $15 million investment under then-Gov. Mark R. Warner.
The Department of Housing and Community Development and Virginia Housing Development Authority developed Opportunity Virginia with the financial institution to connect zone communities with investors.
“The Opportunity Zone program rewards stakeholders who invest in, and maximize, Virginia’s assets,” said Virginia Secretary of Commerce and Trade Brian Ball. “Opportunity Virginia is an innovative approach to building a marketplace for investors and communities to connect and we look forward to working alongside them to attract impactful investments to the commonwealth.”
Since the initiative was first announced, program officials have held meetings, workshops, and seminars across the state. They also developed a virtual marketplace to explain the program, share project ideas and connect investors to businesses and property in opportunity zones.
Zones across the country were nominated by each governor in the spring of 2017 and are comprised of low-income census tracts based on the 2015 and 2016 U.S. Census American Community Survey data, according to housing and community development officials.
Virginia had 901 eligible census tracts, but under federal guidelines the state could claim only 212 tracts. The designations are in place until Dec. 31, 2028.
There are four zones in the Charlottesville area, including the Fifeville and Ridge Street neighborhoods in Charlottesville. Albemarle County has two zones: The area west of U.S. 29 and between Hydraulic Road and Rio Road is one zone, and the area between Sunset Avenue Extended and Biscuit Run, bisected by Fifth Street, is another.
In the Central Virginia region, a swath of Orange County from Old Somerset to Rapidan that includes the town of Orange is one zone. Another zone in Augusta County runs from Waynesboro to Love on the west side of the Blue Ridge Parkway.
According to state figures released at the event, 73% of the zones are in metropolitan areas with an estimated 900,000 residents, 683,000 jobs and 43,000 businesses.
“We are thrilled to formally launch this effort with the major foundation set,” said Opportunity Virginia Executive Director Adam Northup. “Virginia has so many wonderful communities, ripe for continued investment and we hope the investment community will see the potential for great success.”