Changing the face of development in Camp Verde
Town hopes ‘Opportunity Zone’ the path to long-term community investment
CAMP VERDE – Camp Verde is the only community in the Verde Valley to have received Opportunity Zone designation.
For that, the Town’s Economic Development director said he “feel[s] fortunate.”
The “most significant thing about [achieving] this designation” is that it “incentivizes investment in areas where the median family income is below the national average,” said Steve Ayers, Camp Verde’s economic development director.
An Opportunity Zone is defined as a census tract designated by state and federal governments which is targeted for economic development.
Ayers said that though “many census tracts in the Verde Valley” qualified for the Opportunity Zone designation, Camp Verde received the only designation.”
How it happened
Earlier this year, Camp Verde received its Opportunity Zone designation in less than a week.
According to Ayers, how it happened is as good story as what happened.
On Monday, Feb. 12, the League of Arizona Cities and Towns told the Town of Camp Verde that it qualified for the Opportunity Zone designation.
“The government released the list of eligible census tracts,” Ayers said. “Essentially, there were five in the Verde Valley. Two in Camp Verde, three in Cottonwood.”
Due to what Ayers called “short notice,” Camp Verde issued a letter of interest the following day.
“We asked that the census tract involving the 260 corridor and the Finnie Flat/downtown area” be considered, the area “designated as the growth corridor in the General Plan,” Ayers said.
That Friday, Feb. 15, Camp Verde “received confirmation that we were being nominated” for Opportunity Zone designation.
Preferential tax treatment
People who invest in Opportunity Zones, Ayers said, “are investing in the long run.”
“Not investors who want to get in and get out,” Ayers said. “It incentivizes people to put money where it’s needed.”
According to the Arizona Commerce Authority, there are two separate tax benefits connected to investing in Opportunity Zones.
To qualify for either, the investment must be made through an Opportunity Fund, and money invested in the Opportunity Fund must be a gain from another investment transferred into an Opportunity Fund within 180 days of realizing gain.
Taxes on realized gain are deferred and reduced if Opportunity Fund investment held from five to seven years. At five years, 10 percent of the deferred gain is forgiven; at seven years, 15 percent is forgiven.
If the investment is held for 10 years, gains on the Opportunity Fund investment will not be taxed.
According to the U.S. Department of Treasury’s website, https://home.treasury.gov, “investors can defer tax on any prior gains until no later than December 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund, an investment vehicle organized to make investments in Qualified Opportunity Zones.”
Face of development
Over the next few years, Camp Verde is looking at somewhere between $100 million and $200 million connected to three projects, Ayers said.
The 400-plus unit Red Moon RV park under construction is an investment “in excess of $10 million,” Ayers said. And the developer who purchased 80-plus acres behind the Burger King on SR 260 at I-17 has proposed a commercial development with a “potential investment between $30 million and $60 million.
The third project Camp Verde looks forward to is the Simonton Ranch subdivision on Finnie Flat Road, which Ayers said Tuesday is “currently in escrow.”
Simonton Roach, Ayers said, has an “estimated buildout” of $75 million.
“The Opportunity Zone designation has changed the face of development around here,” Ayers said.
And thanks to monthly taxes, Camp Verde is “in a really good place right now.”
“Barring any outside influences on the larger economy,” Ayers said. “This trend should continue.”
-- Follow Bill Helm on Twitter @BillHelm42