An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation authority to the Internal Revenue Service.

Opportunity Zones provide a new tool for investors, fund managers, and communities by utilizing privately sourced funds into eligible economic development and community reinvestment projects.

History

The Tax Cuts and Jobs Act of 2017 were signed into law on December 22, 2017. This act created qualified opportunity zones, of which 879 are in the state of California.  The City of Huntington Beach has 1 designated Opportunity Zone.

In total, this Opportunity Zone has a population of approximately 8,200.  That represents 4% of the City’s total population of approximately 200,000 (2019). 

The median household income for this Opportunity Zone is approximately $61,000.

How Can Investors and Developers Benefit?

As noted, the program allows investors and/or developers to defer (and possibly forgo) paying capital gains taxes. Lenders are far more likely to provide financing for projects within the Opportunity Zone given their greater potential for profitability with the tax breaks. The program also encourages new construction, providing the biggest tax break to investors who keep their money in the Opportunity Zone for at least 10 years.

Investors and Developers who already have projects planned in the Opportunity Zone also stand to benefit enormously.

Opportunity Zone in Huntington Beach

The Opportunity Zone in Huntington Beach is located along the Warner Avenue and Talbert Avenue corridors, between Beach Boulevard and Golden West Street.

Additional information on Opportunity Zones

California Opportunity Zones

U.S. Department of Treasury for Opportunity Zones

CDFA Resource Center for Opportunity Zones

CALED

For more information, please contact the Economic Development Division at (714) 536-5582.