Western half of Fredericksburg nominated as ‘opportunity zone’
A large portion of the City of Fredericksburg will likely be part of a new federal program that encourages private investment in designated communities.
The Federal Tax Cuts and Jobs Act of 2017, which passed in December, included provisions for a new revitalization tool, the Opportunity Zone and Opportunity Fund. The program will allow investors to receive tax benefits on unrealized capital gains by investing those gains in qualified census tracts designated as “Opportunity Zones.” While the federal government is responsible for defining the investment process, the governor of each state was allowed to nominate a set number of qualified census tracts as Opportunity Zones. Virginia Governor Ralph Northam on Friday announced that he had nominated the allowed maximum of 212 Virginia census tracts as Opportunity Zones to the U.S. Department of Treasury.
Two of Fredericksburg’s six Census tracts were nominated as Opportunity Zones. Those two tracts comprise all the land west of U.S. 1 in the City of Fredericksburg, in addition to a small section east of U.S. 1 in the northern part of the City between the canal and river. Click here for an interactive map showing the boundaries of the designated Census tracts and here for more information about the program. Among the areas of the City located in the two tracts are the Hylton property, Celebrate Virginia South, Central Park, Eagle Village, Route 3 and 1 corridors, Mary Washington Hospital campus, Idlewild and the Mill District.
“Opportunity zones are an important federal tool to spur vitality in economic growth in communities across Virginia, and we are committed to using them fully in this administration,” Northam said. “By focusing on local and regional strategies, as well as Virginia’s diverse geography and economic opportunities, we selected a balance of zones that align with other state and local economic development and revitalization efforts. This ensures that Virginia is at the forefront of attracting new Opportunity fund investments.”
The U.S. Treasury Department has 30 days to respond to Northam’s nominations and is expected to accept and approve them as nominated, establishing Virginia’s Opportunity Zones by late spring. The rules associated with qualification of Opportunity Investment Funds and Qualified Opportunity Investments must also be written at the federal level and are not anticipated to be formalized until later this year.