Several parcels of land in Washougal have been designated as “Opportunity Zones,” in which investors could reap federal tax breaks and bring further economic development to the area.
Washington Gov. Jay Inslee recently approved 139 tracts in 36 counties around the state for the new Opportunity Zone program included in the federal government’s 2017 Tax Cuts and Jobs Act.
“Opportunity Zones have the potential to provide a much-needed boost to communities and target development projects, strengthening the local economies and creating jobs,” Gov. Inslee said in an April 20 press release.
The Opportunity Zone program, a bipartisan proposal incorporated into the 2017 tax overhaul, allowed state governors to designate up to 25 percent of eligible census tracts as Opportunity Zones. Investments made through special funds in these zones will be able to defer or eliminate federal taxes on capital gains.
According to the Department of Commerce, to qualify for Opportunity Zone status, a census tract had to have an individual poverty rate of at least 20 percent and a median family income of no more than 80 percent of the area median. A total of 555 census tracts in Washington met the eligibility criteria, though only 139 could receive the designation.
“Opportunity Zone status could be a useful tool to help strengthen these communities by encouraging capital investment,” said Washington Commerce Director Brian Bonlender in the press release. “While we had many more requests than available tracts, I believe we ended up with a good balance of urban-rural and economic development and housing opportunities.”
The local tracts included in the program are “E” Street, from Sixth Street to 28th Street; portions of downtown Washougal including the Pendleton Woolen Mill (Two Pendleton Way) and Bi-Mart (3003 Addy St.) locations; as well as the Port of Camas-Washougal Industrial Park, including the Steigerwald Commerce Center.
With the Opportunity Zone program, investors would be able to defer paying taxes on capital gains that are invested in Qualified Opportunity Funds. The funds would be used to invest in communities designated as Opportunity Zones.
“The idea is that with the incentive of the tax breaks, investment will be stimulated that otherwise might not happen as quickly or as significantly,” Washougal City Administrator David Scott said.
Greg Goforth, a commercial and residential real estate broker with Windermere Crest, of Camas, is marketing some of the vacant lots available along “E” Street. He said there are a few businesses looking to locate in that area.
Some of the employees at Flowers Washougal, at 1203 “E” St., know the types of businesses they would like to see open along that roadway. Bethany Beigh suggested an ice cream shop, a family-style restaurant and a business that showcases local artists.
Chip Lees, the weekend deliverer for Flowers Washougal, and Julie Meyer, a floral designer, would like to see a business that sells used books and CDs. Meyer added that she would be in favor of shopping at an independent grocery store.
Kim Messick, daughter of Flowers Washougal owner Sheryl Malfait, said a lot of youth would like to see Dutch Bros. Coffee open in Washougal.
Messick, however, likes to get her morning beverage from Outlaw Coffee Company, at 3087 Evergreen Way, one mile from Flowers Washougal.
“Small, local businesses are pretty awesome,” she said.
“There are already a lot of coffee shops and convenience stores,” Messick added. “There needs to be something out of the ordinary.”
During a free-for-all discussion on April 27 at Flowers Washougal, Messick mentioned Shorty’s Garden Center would be a good addition to the business landscape on “E” Street, while Lees said he would like to see a building for local artists and an area for startup food businesses — something he has seen in New Orleans.
“It could be a proving ground,” Lees said, regarding the area for startup food businesses. He would also like to see a butcher shop open on “E” Street.
Washougal was one of the most impacted communities in the area during the Great Recession of 2008. Approximately 17 percent of the city’s job base was lost during that time, compared to five percent in Camas and most parts of the Portland metro area.
Paul Dennis, president and chief executive officer of the Camas-Washougal Economic Development Association, said now that the local tracts of land have been designated as Opportunity Zones, he and local officials are awaiting rules on the program from the U.S. Department of the Treasury. They believe the Opportunity Zone designation will help attract capital that will lead to development.
The Treasury Department and the Internal Revenue Service are expected to provide additional details about the new Opportunity Zone initiative this summer.