Mayor Baldelli-Hunt has big ‘economic development news’ to share with public
WOONSOCKET — Mayor Lisa Baldelli-Hunt is inviting the general public to join members of the media for a press briefing on what she’s calling “important economic development news” at Harris Hall at 10 a.m. Friday.
In a statement issued yesterday, Baldelli-Hunt said the city, working with Commerce Rhode Island, state officials, and the U.S. Department of Treasury, will be making “a major announcement” regarding the city’s selection for a new economic development initiative.
The invitation doesn’t offer many specifics, but sources at City Hall say the announcement concerns the creation of Qualified Opportunity Zones, or QOZs, an initiative tied to the federal Tax Cut and Jobs Act of 2017 passed by Congress. The measure contained a little-noticed provision that allows for the creation of QOZs in economically struggling communities.
QOZs are a way for investors to defer or eliminate capital gains taxes – a type of tax generated by profits on real estate and equity transactions. Corporations and individuals can defer the burden by reinvesting it in a financial instrument known as an “opportunity fund” – or eliminate it altogether if the investment is held long enough.
Many officials are touting this relief as a potentially powerful incentive for investment in economic development.
Members of the General Assembly picked up on the QOZ provisions of the federal tax law and passed a resolution in February calling for the Blackstone River Corridor communities of Providence, Woonsocket, East Providence, Pawtucket and Central Falls to be officially designated by the state as a QOZ.
Commerce Rhode Island went a step further, asking for more communities to propose QOZs. The state agency later proposed 25 census tracts from 15 cities and towns for approval as QOZs by the U.S. Department of Treasury and the IRS. All were accepted by the federal agencies just over a week ago.
They include three census tracts in Woonsocket; four in Pawtucket; one in Central Falls; one in Cumberland; and one in East Providence.
Ironically, state lawmakers issued a statement yesterday about the latter development.
“A resolution passed by the House of Representatives requesting Qualified Opportunity Zone designations has borne fruit as the federal government has approved all of the state’s requests,” they said.
The resolution was sponsored by Rep. Kenneth A. Marshall (D-Dist. 68, Bristol, Warren), with Reps. Michael Morin (D-Dist. 49, Woonsocket), Shelby Maldonado (D-Dist. 56, Central Falls) and Jean Phillipe Barros (D-Dist. 59, Patwucket) signed on as co-sponsors.
“The entire House of Representatives is extremely gratified that these areas have been designated as opportunity zones,” said Rep. Marshall. “The distressed communities across our state that have been hit hardest by job loss and hard economic times can receive a much-needed boost by this designation to promote investment and raise income above the poverty level.”