Five areas in Skagit County could benefit from tax breaks for private investment under a new federal program, according to an Economic Development Alliance of Skagit County news release.
Gov. Jay Inslee announced last month that areas in Anacortes, Mount Vernon and Sedro-Woolley have been selected as “opportunity zones.”
The zones were created under the Tax Cuts and Jobs Act of 2017 in order to encourage private-sector investment in low-income communities or those adjacent to low-income communities.
Businesses that invest within the opportunity zones will receive capital gains tax reductions and deferments, according to the release.
John Sternlicht, CEO of EDASC, said the goal of the zones is to encourage developers to create more housing and attract industries that create family-wage jobs.
“People will be drawn to make investments in these areas because of the tax breaks,” Sternlicht said.
Skagit County Commissioner Ken Dahlstedt said he’s hopeful the zones will bring housing developers to the area.
“Housing is a huge issue we’re concerned about,” Dahlstedt said. “A healthy economy requires vacancy. (Businesses) aren’t going to come here if workers can’t afford to live here.”
The tax breaks provided by the opportunity zones may be the sweetener needed to get developers to invest in affordable housing, he said.
The five zones in Skagit County either applied for the designation or were nominated.
The zone in Anacortes, which was nominated by the Samish Indian Nation, includes much of southern Commercial Avenue and neighborhoods north of Mount Erie Elementary School, according to the release.
“The Samish Indian Nation is excited for the possible private-sector investment opportunities that this designation will open up within our community,” Tom Wooten, chairman of the Samish Indian Nation, said in the release.
Three areas in Mount Vernon were designated as opportunity zones. They include most of the city’s commercial area and downtown, as well as part of Skagit Valley Hospital, according to the release.
“These new zone designations, coupled with the relief provided by our flood wall project, have Mount Vernon poised for some very exciting growth opportunities,” Mayor Jill Boudreau said in the release.
The fifth county zone includes the commercial and industrial areas of Sedro-Woolley, according to the release.
Sedro-Woolley Mayor Julia Johnson said in the release the designation is “an incentive to provide our community the ability to pursue with flexibility the best possible mix of investments in business, infrastructure, housing, and more.”
According to the state Department of Commerce, 139 opportunity zones were designated in Washington.
In order to qualify as an opportunity zone, a census-determined area must have an individual poverty rate of at least 20 percent and median family income up to 80 percent of the area median or be adjacent to such an area.
The five Skagit County zones must be certified by the state Department of Commerce, according to the release.
The department will release details and technical guidelines in the coming months, the release states.
“Right now, the rules are very murky,” said Richard Sentinella, communications and research coordinator at EDASC. “We’re waiting for the details to come out.”
A map of Washington’s opportunity zones can be found on the Department of Commerce’s website.