DENHAM SPRINGS – Three census tracts in in the Denham Springs and Walker areas were nominated by Gov. John Bel Edwards on Friday for federal certification as Opportunity Zones.
Federal certification as an Opportunity Zone will permit federal tax incentives to attract investment to low-income communities, according to a news release from the Governor’s Office. The Opportunity Zones program will establish low-income communities as tax-advantaged areas for new long-term private investment as part of the federal Tax Cuts and Jobs Act of 2017.
Gov. Edwards nominated a total of 150 census tracts in Louisiana, the maximum 25 percent allowed from nearly 600 low-income census tracts.
The U.S. Department of the Treasury, which is administering the program, will review and certify the nominated tracts as Opportunity Zones. The Treasury Department also will issue additional guidance about how investors may qualify for the program through equity investments in the selected Opportunity Zones.
“This is definitely good news,” Denham Springs Mayor Gerard Landry said Friday afternoon.
“This is what came from the Trump tax plan,” he said, which lowered capital gain taxes.
Landry estimated the census tract nominated might take in almost 40 percent of the city limits, but the key is sites that would attract investors.
“It will open access the areas where blighted commercial properties are and hopefully get some investments,” he added.
When the city will find out if its nomination is approved is not known, Landry said, but being included is another step in long-term flood recovery.
“This is all part of the Denham Strong initiative, to reach out and offer the opportunity to rehabilitate properties,” he said.
Walker Mayor Jimmy Watson echoed Landry’s sentiments about the potential to bring investment to his city.
“That would be great for that area,” Watson said, “with the additions to the high school and the coming community college, that would help that area.”
“Any type of (economic) zone in Walker, or in Livingston Parish, would help with economic development.”
Walker is running out of land on La. 447 -- Walker South Road – Watson said, so developers would have another reason to look at the U.S. 190 corridor.
“We’re trying to be smart in growth,” Watson said, noting the growth of Denham Springs coming east and Walker going west along U.S. 190.
The Denham Springs census tract is an area from Interstate 12 as its southern boundary to a point above Cockerham Road as its northern boundary. Its eastern boundary is South Range Avenue and western boundary is the Amite River.
According to the federal Community Development Financial Institution Funds website, where the census tracts can be found, the Denham Springs tract has a population of 3,836, with a median income percent of 99.47. The poverty rate is 20.10 percent and unemployment rate is 7.6 percent.
The first Walker census tract is an area from Interstate 12 as its southern boundary to Arnold Road as its northern boundary. Its eastern boundary is Walker South Road and western boundary is near the city limits and North Aberdeen Acres Road.
The Walker tract has a population of 7,395, with a median income percent of 97.49, the CDFIF website said. The poverty rate is 22.60 percent and unemployment rate is 10.6 percent.
The second Walker area census tract is an area from Interstate 12 as its southern boundary to Courtney Road as its northern boundary. Its eastern boundary is North Corbin Avenue and western boundary is the other Walker census tract.
The Walker tract has a population of 8,193, with a median income percent of 107.54, the CDFIF website said. The poverty rate is 7.8 percent and unemployment rate is 6.3 percent.
“Opportunity Zones represent another chance to enhance Louisiana’s quality of life and business climate by providing more reasons to invest in our state and our people,” Gov. Edwards said.
Gov. Edwards and Louisiana Economic Development worked with local, parish and state elected officials – as well as community and economic development organizations, private developers and citizens – to compile a list of low-income communities that offer significant potential for development.
“We conducted a public comment period in March and applied extensive analysis to this selection process. The result will be communities and properties we can be proud to offer as attractive locations to investors.
“We will encourage our banks and investment community, as well as our local governments and financing authorities, to join us in attracting investment to Louisiana communities that need it most.”
The public may view the nominated low-income census tracts on an interactive map at OpportunityLouisiana.com/business-incentives/opportunity-zones.
Upon viewing the map application, users may find information about each zone and the political subdivisions in which they are located.
For more information on the Opportunity Zones program at the federal level, visit CDFIfund.gov/Opportunity-Zones.
The primary attraction for investing in Opportunity Zones is deferring and lowering federal taxes on capital gains.
For a qualified Opportunity Zones investment, capital gains taxes may be deferred the first five years; after Year 5, taxes may be cancelled on 10 percent of the original capital gains investment and deferred for the remainder.
In Year 7 through Year 10, taxes may be cancelled on 15 percent of the original capital gains investment, and the remainder may be deferred through 2026.
For Opportunity Zones investments lasting longer than 10 years, investors are exempt from capital gains taxes on the Opportunity Zones investment itself, in addition to the other benefits for capital gains carried into the investment.