METRO WEST DAILY NEWS – Investors have a new incentive to move their money into distressed neighborhoods in Framingham and Marlborough.
Federal officials last week approved requests from the two cities to participate in the Opportunity Zone program, a new initiative aimed at spurring economic development in low-income communities.
In exchange for launching projects in struggling areas, investors are eligible for tax advantages, reducing the risk and increasing the potential reward of redevelopment projects.
The U.S. Treasury Department last week approved a slate of applications from the state to designate parts of 79 cities and towns as so-called Opportunity Zones.
In Framingham, the designation applies to the southeast side of the city, which has struggled to rebound from the decline of manufacturing and lingering environmental contamination in the area.
Marlborough’s two qualifying U.S. Census tracts encompass the historic downtown village, parts of the French Hill neighborhood, the Rte. 20 corridor and areas farther east and west zoned for industrial, business and residential use.
State officials will hold a briefing in mid-June to help cities and towns capitalize on the new program.
“Our near-term focus is ensuring communities have the tools they need to position their Opportunity Zones as attractive investments,” Housing and Economic Development Secretary Jay Ash said in an announcement last week. “We will continue to work with them and all cities and towns in the Commonwealth to advance their economic growth agendas.”
Created under the new tax law passed in December 2017, the Opportunity Zone program allows investors to defer taxes on a portion of their prior capital gains in order to invest the money in a distressed neighborhood. As an additional incentive, the federal government will not tax the income investors receive from selling a project in a qualified area, as long as the investment was held for at least 10 years.
Governors across the country were allowed to nominate up to 25 percent of eligible Census tracts within their states for inclusion in the program. Massachusetts submitted 138 tracts for consideration — the maximum allowed under the new tax law.
In Framingham, the newly-created Opportunity Zone includes a mix of residential and commercial properties, including junkyards, auto repair shops and industrial suppliers. It also includes a large concentration of subsidized housing, as well as a significant amount of industrial land, including the state prison and the former General Motors plant, which is now the site of Adesa, the vehicle auction house.
An action plan created by the city last year lays out suggested improvements for the area, including the development of more open space, affordable housing and amenities.
City officials are eyeing a number of potential benefits to the tax incentive program, particularly in transforming the Waverly Street corridor.
“Redevelopment along that corridor could bring such uses, enhance walkability, and — over time — contribute to defining a commercial corridor linking downtown Framingham to Natick center,” the city’s application reads. “The eastern gateway is approximately one-third of a mile to the West Natick train station, which may present additional transit-oriented development potential.”
Elsewhere in Massachusetts, the program is concentrated heavily in so-called Gateway Cities, where the median household income and rate of educational attainment falls below state averages. Rural communities make up another 18 percent of the cities and towns accepted into the program, according to an announcement from the state.
“The approval from the U.S. Treasury validates our collaborative approach and our efforts to achieve regional equity across the Commonwealth,” Lt. Gov. Karyn Polito said in the announcement. “We are pleased to receive full approval, knowing that many different types of communities – from rural to Gateway Cities to large urban centers – will now have additional opportunities to attract investment.”
This article by Jim Haddadin originally appeared here.