ST. LOUIS — The City of St. Louis, in conjunction with St. Louis Development Corporation, has released its “Opportunity Zone Prospectus.” This prospectus hopes to attract investors to areas of the city where there are opportunities to align with developers for future development projects. St. Louis is among 161 areas in the State of Missouri to feature “Opportunity Zones.” These are low-income census tract areas that will see added incentives for investment.
The Opportunity Zones incentive is a new community investment tool established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. Opportunity Zones provide a tax incentive for investors to re-invest their unrealized capital gains into dedicated Opportunity Funds.
Opportunity Zones, which are designated as such by the governor are low-income census tracts that offer tax incentives to groups who invest and hold their capital gains in Zone assets or property. By investing in Opportunity Zones, investors stand to gain a temporary deferral on their capital gains taxes if they hold their investments for at least 5 years, and a permanent exclusion from a tax on capital gains from the Opportunity Zones investments if the investments are held for 10 years.
The purpose of the Opportunity Zone Prospectus is to provide investors, developers, business owners, and citizens with a better understanding of the program and the opportunities the City has to offer within its designated Opportunity Zones. The Prospectus includes an overview of the Opportunity Zone program, an overview of City demographics and resources and descriptions of the City's Opportunity Zone clusters including momentum occurring within these zones, existing anchor projects, and potential investment opportunities.
Opportunity Funds are Treasury-certified investment vehicles, that deploy capital into Opportunity Zones. Opportunity Funds are required to hold at least 90 percent of their assets in an Opportunity Zone, or face penalty for each month it fails to meet the investment requirement. The penalty can equal the amount of the investment shortfall, multiplied by the underpayment rate as defined in the Internal Revenue Code.
The Opportunity Zone Prospectus in available at: (https://www.stlouis-mo.gov/government/departments/sldc/real-estate/opportunity-zone/ ) beginning on Wednesday, April 10, 2019.