Trump-era ‘opportunity zone’ off to a rough start in Avon | VailDaily.com
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Trump-era ‘opportunity zone’ off to a rough start in Avon

Town received little in return for a $32,000 payment for an opportunity zone prospectus

A page from a draft prospectus produced by the town of Avon.

Avon has been scammed by an “opportunity zone” profiteer, but not in the way Michigan Rep. Rashida Tlaib predicted it would happen.

The town recently paid $32,000 to a design firm in exchange for materials that tout and explain Avon’s status as an opportunity zone — a geographic area where developers can get breaks on capital gains taxes — only to have the firm provide little in return.

“It was originally a $50,000 contract … the Avon profile was to be the first element,” said Town Manager Eric Heil. “They got several months behind and then produced something that was not complete of an Avon profile, and that’s when I jumped in and made the decision to terminate.”

The town received a grant from the Colorado Department of Local Affairs covering half the expenses.

Heil says while there’s nothing Avon can do to get a reimbursement on the $32,000 paid, town staff learned a valuable lesson in the experience.

“We really don’t have recourse, but it’s something we’ve looked at in how we do our contracts,” Heil said. “We won’t repeat that.”

Increased scrutiny

The opportunity zones concept has come under increased scrutiny in recent months as developers seek to exploit the program, which was designed to spur investment in low-income areas and approved as part of the Tax Cuts and Jobs Act in 2017.

In Baltimore, a development project controlled by Under Armour’s billionaire CEO Kevin Plank, one of Maryland’s richest men, will receive millions in tax breaks, despite the fact that it is not in a census tract that is poor, reports propublica.org. In Detroit, wealthy downtown tracts with high-end tenants including Microsoft, JP Morgan and Quicken Loans, have also been included as opportunity zones.

In November, Tlaib introduced legislation to “explicitly repeal the Qualified Opportunity Zones that wealthy developers are exploiting to gentrify low- and moderate-income communities for capital gains tax breaks.”

Boulder, Denver and Avon have also been cited among the hot real estate markets where opportunity zones raise questions.

A January article from the Intercept shed light on the criticisms former Gov. John Hickenlooper is facing for his role in allowing “cash-flush cities to become part of state opportunity zones designed to benefit economically distressed areas.”

In a 2018 Denver Business Journal article, Hickenlooper said he supported opportunity zones for their ability to “attract investment in businesses, workforce housing and infrastructure where it is needed most.”

And while proponents in Avon point to the fact that the town is in need of workforce housing, affordable housing developers have yet to take advantage of the program in town.

Luxurious settings

For their part, Avon officials are hopeful that the prospectus they’re creating could entice developers to build more housing in Avon. After the firm they hired failed to provide the work they were looking for, the town took over the job, tasking town staff to complete the digital pamphlet.

Matt Pielsticker, the town’s planning director, said he was glad the town ended up producing the document in-house.

“We don’t want it to be a static document, and we were sort of concerned that was what we were going to end up with, through the consultant team,” Pielsticker said.

A page from a draft prospectus produced by the town of Avon.

A draft version of the document looked a bit like the news stories which are critical of opportunity zones, displaying pics of luxurious settings and facts on just how hot the housing market is in Avon. One page of the draft prospectus actually contains the headline “Demand for luxury housing.”

Among Tlaib’s major criticisms of opportunity zones: “Opportunity zones were supposed to help uplift low-income communities and those living in poverty, but instead, we are seeing them benefit billionaires and their luxury projects,” she wrote in a release touting the introduction of the Repeal Opportunity Zones Act of 2019.

“The American people have been scammed by opportunity zones,” she added.

Avon’s approved opportunity zone is within its census tract, which is 26.1 square miles and comprises the majority of the town and all developed and undeveloped portions of the valley floor.

The town intends to publish the prospectus touting its status as an opportunity zone on its website when it’s complete.


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