Monday, February 22nd, 2021

Erie leaders urge Biden administration to continue Opportunity Zone program

WASHINGTON, D.C. – The Erie Downtown Development Corporation is entering its fourth year, continuing $100 million worth of construction in downtown Erie. They continue work on the future site of new apartments, a grocery store, and food hall.

“We have over twelve properties that we’ve acquired,” said Matthew Wachter, E.D.D.C. Vice President of Finance and Development. “We will be developing over 477,000 square feet of real estate.”

The work is made possible through a carveout in the 2017 federal tax reform law which created Opportunity Zones. It’s a tax incentive for private investors to spend their money — typically on real estate projects — improving low-income, high-poverty communities in exchange for deferring tax on some of their capital gains earnings.

Erie’s 16501 ZIP code was deemed the poorest in the nation in 2018. Overall, the city has eight Opportunity Zones including the downtown area Wachter’s group is redeveloping.

“What people realize is that areas of the country like Erie truly need assistance,” Wachter said. “This is a phenomenal way to help those communities really help themselves.”

But, President Joe Biden has pledged to reverse some of the Trump administration’s tax cuts, leaving the future of the program in question. White House officials say they will review the program to ensure it’s actually working and is not simply a tax haven. Critics argue the policy does little to improve the lives of the resident who actually live in the Opportunity Zones, notably minorities.

More than 8,700 federal Opportunity Zones have been designated nationwide. They have collected more than $75 billion in capital for various projects, according to a WealthManagement.com report from December 2020.

“The President is supportive of some reforms to the way that Opportunity Zones operate to make sure they are actually driving investment into communities that need it,” said Bharat Ramamurti, Deputy Director of the White House National Economic Council.

U.S. Rep. Mike Kelly (R-Pa.), who represents the city of Erie in Pennsylvania’s 16th Congressional District, sits on the House Ways & Means Committee, which oversees tax policy. He calls the program a success.

“Whether it will continue or not is up in the air,” Kelly said in an interview last month. “I don’t know, we’ll have to wait and see on that one. But, I hope (the Biden administration) will continue it. I hope they will even expand it.”

The Opportunity Zones legislation was written with bipartisan support, led by Sen. Tim Scott (R-S.C.) and Sen. Cory Booker (D-N.J.). So, officials from the E.D.D.C. are optimistic their work will continue even if changes are made.

“It would be more of a scalpel approach as opposed to a hammer,” Wachter said of any potential changes.

Erie leaders urge Biden administration to continue Opportunity Zone program

Source:

Erie News Now