The recent selection of 126 investor Opportunity Zones in Colorado amounts to a modern-day Goldilocks story, with the final selected zones nominated from 501 economically distressed U.S. Census tracts.
During the statewide selection process, some areas were deemed "too cold" to attract capital gains investment and some "too hot" and not in need of extra help, says Stephanie Copeland, executive director of the Colorado Office of Economic Development & International Trade (OEDIT). She says the 126 "just right" zones, in 46 of the state's 64 counties, are both economically distressed and home to potential projects that could appeal to investors.
Opportunity Zones were established through the Tax Cuts and Jobs Act in December 2017 to help investors with capital gains from the sale of capital assets connect to reinvest in viable projects in distressed areas. This new federal tax incentive sunsets in 2026.
Jeff Kraft, OEDIT division director for Business Funding and Incentives, says this new experiment in Opportunity Zones is unique because "it dwarfs most other government programs that have strict limits and quotas."
"If harnessed, it can have a tremendous impact with the huge amount of potential capital," Kraft says, noting estimated annual capital gains in the U.S. of $7 trillion. "It's up to the creativity of the private sector."
The zones (see www.choosecolorado. com/oz) range in size from a dot on the state...