Zones add to incentives for economic development

Robin Brown
Robin Brown

Phil Castle, The Business Times

Federal legislation offering tax breaks adds to the incentives to relocate or start businesses in Mesa County, according to the director of an economic development organization.

Plus, the creation of so-called opportunity zones coincides with growing interest in Mesa County among developers and investors, said Robin Brown, executive director of the Grand Junction Economic Partnership. “We kind of hit the jackpot on the timing of this.”

A tax reform measure enacted in 2017 includes tax breaks for investing in
opportunity zones, areas deemed distressed because of unemployment and income levels. The program offers a chance to defer taxes on unrealized capital gains rolled over into investments in opportunity zones as well as decrease taxes on capital gains on investments held at least five years and eliminate taxes on gains for investments held 10 years.

Out of 14 opportunity zones initially proposed for Mesa County, six with the highest priorities were approved by the Colorado Office of Economic Development and International Trade, Brown said. A seventh zone in Mesa County contiguous with a zone in Delta County was approved to include the Powderhorn Mountain Resort on the Grand Mesa east of Grand Junction. Mesa County could serve as something of pilot for the program in Colorado, she said.

Zones are located where Mesa County and the City of Grand Junction have identified areas that can accommodate growth and property is available for development, she said.

Brown said she foresees three situations unfolding with the opportunity zone program. First, some developers will proceed with projects in zones to take advantage of tax benefits. Second, investors will pool their resources in a fund and a fund manager will look for projects in which to use the money. Third, private investments will be used for public projects, such as affordable housing.

GJEP offers assistance to those interested in opportunity zones by offering information about the zones, available properties and potential projects, Brown said.

The federal tax breaks offered through the opportunity zone program add to the available incentives promoting economic development, she said.

The Rural Jump-Start Program creates zones in Colorado in which eligible businesses are exempted from paying state and local taxes. Qualifying businesses are exempt from paying state income, use and sales taxes as well as county and municipal personal property taxes. In Mesa County, local government jurisdictions offer additional incentives.

Tax credits are available to companies that locate in Mesa County, a designated Colorado Enterprise Zone established to create jobs and promote investments.

The Historically Underutilized Business Zones program helps small businesses gain preferential access to federal procurement opportunities and government contracts.

Cash grants, land grants or land discount options also are available to qualifying companies, especially if those incentives could help bring a company to Mesa County.

GJEP can help businesses take advantage of those programs in combining incentives, Brown said.

The opportunity zone program comes at a time when there’s growing interest among companies, developers and investors in Mesa County, she said.

Brown attributed the situation to a combination of factors, including the lifestyle and lower costs of Mesa County compared to the increasing congestion and rising costs along the Front Range of Colorado; the commitment to Mesa County School District 51 in passing mill levy and bond ballot measures in 2016; and the collaboration of GJEP, the Business Incubator Center and Grand Junction Area Chamber of Commerce in helping businesses.

GJEP has been more successful in recruiting business prospects, she said, by focusing efforts on small, owner-operated firms located within one commercial air flight from Grand Junction. Cultivating relationships with business owners over the years has helped as well.

In 2018, seven companies brought operations to Mesa County and along with them 57 jobs and a total of $19 million in economic effects from salaries and capital investments, Brown said.

For more information about the opportunity zone program and other incentives and services, visit the websites at www.gjep.org or www.choosecolorado.com/opportunity-zones.