Indian Head, Waldorf granted redevelopment zone status
The Town of Indian Head and two areas in Waldorf have qualified for a federal program that offers tax incentives to private investors to encourage them to develop in economically distressed areas, the county learned last week.
Indian Head, the Washington Urban Redevelopment Corridor along Old Washington Road in Waldorf and the Waldorf Station development at the intersection of U.S. Route 301 and Mattawoman Beantown Road have been designated “opportunity zones” by the U.S. Department of the Treasury, along with 146 other census tracts across the state.
The opportunity zone program allows investors to defer paying federal taxes on the capital gains they make from selling assets such as stocks, bonds and real estate for up to 10 years, provided that they deposit the money into a specially designated opportunity fund.
The money in the opportunity fund is then used to invest in small businesses and development projects in the opportunity zone areas.
Unlike other federal tax credit programs, the amount of money that can be made available through the opportunity fund is not capped.
“Opportunity zones will mean more jobs in areas of the state that need them the most,” Maryland Secretary of Commerce Mike Gill said in a press release announcing the selection of the state’s 149 zones in April. “We expect that this program will supercharge economic growth in Maryland.”
The Maryland Department of Housing and Community Development will oversee the opportunity zone program in the state, in conjunction with the Maryland Department of Commerce.
The opportunity zone program is a new national development initiative established as part of last year’s federal tax reform law. Each Maryland county submitted to Gov. Larry Hogan (R) its nominations for census tracts that met the federal criteria of an individual poverty rate of at least 20 percent and a median family income that was no more than 80 percent of the area median.
Up to 25 percent of the state’s 589 qualifying census tracts could be nominated for consideration as opportunity zones.
In Charles County, the department of economic development was responsible for identifying candidate regions.
Deputy director Marcia Keeth told the Maryland Independent that eight census tracts in Charles County met the federal criteria.
“We looked at [the eight areas] and asked which ones would be the best for ... attracting potential investors,” Keeth said. “We identified three that we thought were very, very significant, and that really have an awful lot of potential for attracting investors and for economic growth in the county, which is what this whole program is aimed at.”
In its submission to the governor’s office, the economic development department wrote that investing in the revitalization of Indian Head is “imperative to future economic growth and to protecting the Town’s major employer, Naval Support Facility Indian Head.”
The Washington Urban Redevelopment Corridor, the department wrote, “has been in need of revitalization, reinvestment, and redevelopment for a generation” and is the proposed site for a future lightrail station.
The adjacent Waldorf Station tract is being redesigned as a “mixed use, transit-oriented development slated for high rise apartments, a retail shopping village, and Class ‘A’ office space.”
U.S. Rep. Steny Hoyer (D-Md., 5th), the Charles County delegation to the Maryland General Assembly, the Town of Indian Head and the Charles County Chamber of Commerce submitted letters to the Maryland Department of Housing and Community Development urging approval of the three sites.
Keeth said that given the limited number of locations that could be nominated by the state, the economic development department expected that at least two of the three would be forwarded to the treasury department.
“We are very grateful to the Hogan Administration for taking our suggestions,” she said.
Taylor Yewell, the department’s manager of redevelopment, said that investors are being encouraged to hold off on creating opportunity funds for the time being until the state housing and commerce departments determine how the program will be administered.
Yewell said that starting next month, the state agencies will begin rolling out a series of seminars describing how the program will work. The county economic development program will likely hold its own seminars and workshops for local investors after that.
“We can start creating awareness of the program now, but I don’t think anybody’s going to be up to speed on what the nuances are until they start these training sessions in July,” Yewell said.
“State agencies have to interpret the federal guidelines for this program and then pass that knowledge on to us,” Yewell explained. “They’re recommending that nobody really start to engage in the process of creating these opportunity funds until next fall.”
Yewell said that his department anticipates being “ready to roll out” the county’s opportunity zones in early 2019.
The opportunity zone program dovetails nicely with the economic development department’s fiveyear strategic plan, Keeth noted.
“One of our goals is to make Charles County as attractive as possible for investment and for business,” Keeth said. “The opportunity zone is a tool for that. It creates environments in which businesses can thrive.”