CARBONDALE — The Delta Regional Authority will provide nearly $100,000 to help Southern Illinois attract private investment via a new federal tax incentive targeting low-income communities.
Greater Egypt Regional Planning and Development Commission Executive Director Cary Minnis said his organization will use the funding to hire a consultant to market the region and help local officials navigate the federal “opportunity zones” initiative.
One of the consultant’s primary tasks will be the creation of a 16-county investment prospectus — essentially a report highlighting potential investment opportunities in the region’s designated tax-incentive census tracts.
Opportunity zones were created by the 2017 Tax Cuts and Jobs Act backed by President Donald Trump. They allow individuals and corporations to defer and reduce their tax liability on capital gains if they invest in qualified projects in designated low-income census tracts for a certain amount of time.
For instance, those who hold their investments in these qualified projects and places for at least five years by December 2026 may reduce their liability by 10%. And those who hold investments for seven years by that date may reduce their liability by 15%. Any new gains are tax free if investments are held for at least a decade.
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Minnis said that local officials are interested in opportunity zones, but also are in need of additional information to better understand how to plan for and seek investments from qualified funds.
The consultant, which Minnis said he hopes to have on board by early October, will work with officials in 16 counties, and possibly a few more.
While the Greater Egypt Regional Planning and Development Commission took the lead on applying for the grant and managing the funding, it represents a joint effort, Minnis said. The other groups involved are: Greater Wabash Regional Planning Commission, Southeastern Illinois Regional Planning and Development Commission, Southwestern Illinois Metropolitan and Regional Planning Commission, and Southern Five Regional Planning District and Development Commission.
While the tax-incentive districts are generating buzz among city leaders and economic development officials nationally, questions about the program abound. Critics are concerned that much of the early investment appears to be heading toward already gentrifying areas where real estate and other business deals were likely to happen anyway, rather than spurring business creation in truly hard-up places. Rural communities have also been challenged by the complexity of the program, and lack of resources to market themselves to prospective investors.
In a statement, DRA Federal Co-Chairman Chris Caldwell said his entity’s investment will help Delta region communities, including Southern Illinois, take steps to be more competitive to draw private capital into their tax-incentive districts.
Funding for the project was provided by DRA’s States’ Economic Development Assistance Program program, which supports infrastructure, transportation, workforce training, education and business development projects in the Delta region. The DRA was created by Congress in 2000. Southern Illinois’ 16 counties are the northernmost in the authority’s coverage area.
On Twitter: @MollyParkerSI