Category: New Developments

Massive solar project 8 years in the making debuts in eastern Kern

Eastern Kern County’s vast renewable-energy potential will shine brightly Friday as corporate and government leaders celebrate the completion of an eight-year, roughly 1,400-acre photovoltaic project designed to generate enough electricity to power more than 150,000 homes in the Los Angeles area.

With a price tag estimated in the hundreds of millions of dollars, L.A.-based 8minute Solar Energy’s three-phase Springbok project in Cantil has put the area’s otherwise underused real estate to use creating some 850 construction and maintenance positions, as well as 1,100 indirect jobs.

Viewed in the context of existing wind farms in the Tehachapi area and a larger solar plant under development nearby by the same company, the project demonstrates the renewable-energy potential of a county that is sometimes overshadowed by its better-known oil and gas portfolio.

The project’s developer described its achievement in historic terms.

“The Springbok cluster is the first place in the country where solar beat the price of fossil fuels,” 8minute Solar spokesman Jeff McKay said by email. “This is where we helped prove to the world that the future of energy belongs to solar.”

County Supervisor Zack Scrivner, whose district encompasses the project, welcomed the project’s completion.

“I support appropriately located renewable energy projects that hire locally and contribute to the organizations and needs of the community,” Scrivner said by email. “8Minute Energy has shown they are here for the long term and I congratulate them on another successful project in the center of energy for California.”

The project’s 448-megawatt-dc of electricity is being sold to the Los Angeles Department of Water and Power and the city of Glendale.

Next up for 8minute Solar is the project known as Eland, a more than $1 billion installation touted as the nation’s largest solar energy project. Sited a little more than half a mile away from the Springbok cluster, it was recently approved by the city of Los Angeles.

What makes Eland special is its energy-storage capacity. Besides generating some 400 megawatts of power, it is designed to store up to 1,200 megawatt-hours of electricity when it opens in 2023, according to 8minute Solar.

Also extraordinary is its cost: Eland is said to offer the lowest combined solar and storage prices anywhere.

https://www.bakersfield.com/news/massive-solar-project-years-in-the-making-debuts-in-eastern/article_50683350-0735-11ea-b562-df2a68bf6796.html

MADERA COUNTY HOUSING BOOM COULD SPUR AT LEAST ONE NEW CITY

Brent McCaffrey, president of Tesoro Viejo and McCaffrey Homes, shows visitors from the real estate industry and local governments a model of the town center at Tesoro Viejo, a large, mixed-use community being built in southeast Madera County. Photo by David Castellon

Published On October 25, 2019 – 1:35 PM
Written By 

It’s been about three years since the groundbreaking ceremony for Riverstone, one of two massive planned housing developments being built off Highway 41 in southeast Madera County.

Considering the estimated scope of the project — 6,578 homes on about 2,000 acres — it may not be completed for 30 years or more.

But Riverstone and the other big Madera County development to the north along 41, Tesoro Viejo, aren’t just about home building.

In the mix

Both are mixed-use developments with plans to include commercial, comprised of spaces for office, retail and light industrial businesses alongside stylish homes and recreation options that include parks, community centers and trails that will allow residents to walk, jog or bicycle to the nearby San Joaquin River.

In fact, development groups involved with the 1,600-acre Tesoro Viejo development have erected a little more than 70 of the 5,190 homes planned to be built there, and they’ve already built a Madera County fire station and a county sheriff’s sub station on site, as well as “The Hub,” a welcome center for potential homebuyers, along with a restaurant and a brew house planned for the future.

 

Educational opportunities

Tesoro Viejo has also completed a kindergarten-through-eighth-grade elementary school, and even though only about 20 homes have been occupied, the school is fully operational with children from outside the development bussed in.

Eventually, the plan is for the elementary school to mostly serve children living in Tesoro Viejo, said Brent McCaffrey, president of Tesoro Viejo and McCaffrey Homes, the lead developer on the project.

As for Riverstone, the developers there held a second groundbreaking off 41 and Avenue 12 Thursday afternoon for Riverwalk, the first commercial portion of that project.

The plan is for Riverstone to have 1.5 million square feet of commercial space, with Riverwalk comprising about two-thirds of that, said Timothy Jones, a developer and principal in the company that oversees the development, Riverstone Development LLC.

“We have 95 acres along 41,” for Riverwalk, he said.

 

Multi-family in the works

And the commercial area — which unlike Tesoro Viejo will have no industrial businesses — will be mixed use, meaning that some residential and office spaces will be available above some retail and office spaces, Jones said.

In addition, beyond building the single-family homes in the residential portions of Riverstone, “We anticipate having some apartments, definitely some [condominiums] in the mix,” he added.

Riverstone began construction before Tesoro Viejo, and homes started selling there in 2017. So far, about 400 completed, single-family homes have been occupied, with at least 50 more under construction, Jones said.

 

Building ahead

As for the demand among homebuyers, he said, “We’ve got six builders in there now. We’ve got a couple more trying to get in, and we are building ahead of our expected absorption.”

Some experts have said Madera is in the midst of a building boom, in part because spaces for developments with natural areas have become scarce in the Fresno area.

“Years ago, you had to live on a golf course. New people are requiring outdoor living and trails as the No. 1 thing they’re looking for. In all our entire master-planned communities here in Madera County, that is a big emphasis,” Madera County Supervisor Brett Frazier said.

 

New neighborhoods

At Tesoro Viejo, McCaffrey said the home building will be divided into nine “villages” — essentially neighborhoods — each with its own park, while Jones said 20-23 small parks are planned to be built throughout Riverstone.

Both also are planning to build multiple community centers, while Riverstone’s plans also include the construction of three elementary schools, along with a junior high school and high school.

“The first elementary school is set to break ground in January of 2020” and open in August of 2021, said Jones, adding that even after Riverstone is more fully developed, the schools likely will serve not only students there but also those in nearby areas, including The Ranchos and Rolling Hills.

 

Startups welcomed

Among the selling points at Tesoro Viejo — where three million square feet of commercial space is planned to be built — and Riverstone is residents who may start up or work at businesses in the developments will be able to avoid the traffic and time involved in commuting to and from Fresno, Madera and other nearby areas.

And with the addition of restaurants and possible places for entertainment and shopping, “When people come into the town center, they will hear about the lifestyle, not just a home to live in or a school to go to, but also the social infrastructure where you can live, work, play,” McCaffrey said last month to a group of real estate brokers, local government officials — Frazier among them — and others brought in to hear about the development on a bus tour put on by Fresno State’s Gazarian Real Estate Center.

 

Way of life

In fact, he said his family has donated land to build a Catholic church in the town center.

“So we’re trying to create not just a development, but also the social fabric of the community.”

If this all sounds like a couple of cities in the works, you wouldn’t be far off the mark.

In 1995, Madera County supervisors adopted the Rio Mesa Area Plan, which included supporting residential and commercial development along 15,000 acres of then mostly farmland bordered by Highway 41 to the west, the San Joaquin River to the south, east toward Millerton Lake and Highway 145 to the north.

The plan was to merge those developments into a city, which would be the third in Madera County, after Madera and Chowchilla.

Tesoro Viejo sits in those boundaries, and McCaffrey said he expects his development and possibly some proposed to the south of his could be incorporated someday into a single city.

 

Town of its own

For his part, Jones said his development is far enough south of the Rio Mesa area that it’s unlikely Riverstone is unlikely to be rolled into a city with Tesoro Viejo.

But Riverstone already is a larger development in terms of acreage and number of homes, and on top of that, the developers own about 5,000 adjoining acres they want to get zoned for housing and eventually build an additional 20,000 residential units and dedicate about 600 acres of that for additional commercial development.

“That whole area out there could be another city,” Jones said of Riverstone, but he shied away from saying whether he would support that happening. “You know, we are so far away from that. We’re talking 20 to 40 years before that’s in contemplation realistically. So I can’t tell you the answer to that. I don’t know.”

He added, “I think the issues of becoming a city are complicated.

2 years since its reopening, Fulton Street continues to develop

FRESNO, Calif. (KFSN) — As thousands celebrated year two of Fulton Street’s reopening, Valley native Reza Assemi took Action News inside one of his latest projects.

“I bought this with a partner Jamin Brazil,”

Assemi is one of the developers behind buildings like Iron Bird Lofts, Broadway Studios and the old theater three. But now he is looking to turn this 1918 building on Inyo and Fulton into something new.

“We are looking to do commercial space downstairs so hopefully taprooms, entertainment-driven businesses and upstairs tech space,” he said.

Assemi tells Action News for over two decades he has envisioned changing the scope of this area.

“I love downtown. It’s rich with visuals, so that’s exciting to take something beautiful, neglected and bring it back. And the gravy on top is to make it entertaining,” he said.

And it is happening. Many people are glad to see what was once shut down now thriving.

“It seems like it turned around it’s a beautiful place to be,” said Shane Baker of Fresno.

“It’s kinda cool because I started to come down for the Fuego games and foxes and then noticing all beer gardens and cool events,” said Tony Dusan of Madera.

Mark Standriff with the City of Fresno says the reopening of Fulton Street has increased gross revenue and boosted the economy.

“It has grown over 1,500% which is an amazing figure, so this kind of growth is just the beginning,” he said.

And as Assemi works to continue investing and revitalizing downtown Fresno, people can be seen from the second-floor window of his next project taking in what he and many others hoped to create.

“It doesn’t exist without that interest without the public, so I really think they are the ones making this happen,” he said.

Assemi says construction on this project will likely begin next month. He tells Action News it might take about five months to complete, but he and his partner are hoping it will be ready by next spring.

https://abc30.com/2-years-since-its-reopening-fulton-street-continues-to-develop/5632356/

Merced points to thriving industrial base

 

Central Valley Business Times

August 23, 2019

  • Cites five firms expanding in Merced
  • “An expansion that is bringing jobs and revenue to the community”

The city of Merced is touting its industrial base, saying it is thriving.

“Our retail and commercial sector is doing well, along with our housing market, and so is our industrial side,” says City Manager Steve Carrigan. “The industrial side of Merced is undergoing an expansion that is bringing jobs and revenue to the community. We are getting construction jobs, and then permanent jobs for Merced.”

Merced officials point to the expansion of existing businesses and the addition of new industrial buildings, with the growth spread across a variety of markets.

“That’s a good indicator of the city’s economic vitality,” says Assistant City Manager Stephanie Dietz.

The companies are located throughout the city’s industrial zones. “We are seeing these expansions in several of our industrial parks across the southern section of the city,” says Ms. Dietz. “It’s not just concentrated in one area.”

In the case of Titan Metal Products, the expansion is doubling the size of its facilities. Titan Doors, 1891 Wardrobe Ave., makes stock and custom doors, door frames and assemblies. Some of the firm’s doors are fire and ballistic rated. Titan’s products were recently used in the Museum of Modern Art in San Francisco.

The existing Titan plant spreads over 18,725 square feet, and the company is adding another 19,000 square feet of space to the door and assembly area. Centurion Boats, 2047 Grogan Ave., has been a maker of high performance towboats since 1976, specializing in wake-surfing towboats. A division of Correct Craft, Centurion is headquartered in Merced and offers sevenmodels, along with the ability to custom build a boat.

The company is undergoing a 24,234 square foot shop and office expansion, putting in a 3,600 square foot development and engineering facility, along with a test tank. All of the growth of the facility increases theresearch and development capacity to the facility.

O’Keeffe Safti-First, 220 S. R St., has specialized in architectural glass and metal products for 75 years. Some of O’Keeffe’s custom skylights, ladders and aluminum building products are in the Stanford Medical Center, the Intel Campus and the Ala Moana Center in Honolulu.

Safti-First is known for its fire-rated glass and framing systems, some of which are at the UC Davis campus, the U.S. Military Academy, West Point and Folsom Prison. The firm is adding a 30,651 square foot manufacturing facility plus a 7,764 square foot cold room to accommodate growing market demands.

Pacific Gas and Electric has expansion work going on at its service center and corporation yard located on the corner of Childs Avenue and Kibby Road. The utility is locating its regional management office at that site in a 15,400 square foot building, and installing a 9,100 square foot operations building. PG&E is also putting in a 23,500 square foot combination garage/warehouse at the site.

In addition to the existing plant expansions, developers are seeing a demand for more buildings that are ready for industrial tenants to move in, the city says. Lawler Excavation is constructing two new industrial buildings on Cessna Way in the city’s industrial park. The buildings, one 8,400 square feet and the other 7,500  square feet, could be used as warehouses or for other light industrial uses.

https://files.constantcontact.com/2cb20f61601/801ee0ec-f1f1-4db3-a4ba-a329c2b00017.pdf

$30 million boutique hotel planned for Three Rivers

It was standing room only at the Three Rivers Memorial Building on Wednesday evening, as more than 100 locals turned out to discuss the future of the small foothill community during a town hall meeting.

Much of the debate centered on a proposed 200-room, $30 million “luxury lodge” off Highway 198 and Old Three Rivers Road.

District 1 Supervisor Kuyler Crocker said the town hall meeting was intended to educate residents and hear their concerns.

“We are much closer to the starting line than the finish line here,” Crocker said of the proposed hotel. “Now is the opportunity to learn and give feedback.”

Dubbed Sequoia Resort and Spa in preliminary site plans, the boutique hotel would feature striking, earthen architecture and offer guests an experience directly inspired by the backdrop of Sequoia National Park.

Because the land is already zoned for hotel construction and abides by the Three River Community Plan, principal partner Guatam Patel could legally begin construction without public hearing.

However, Patel told the packed room he is committed to incorporating community feedback into the project’s design, having already sunk 2.5 years and more than $500,000 into finding an appropriate site.

“We are committed to having a local flair to this. That’s where modern hotel design is going,” he said. “Guests don’t want to sit trapped in their room for three nights. They want to go out and experience the local spots.”

The flair will cost you: Rooms at the resort are expected to run at least $300 a night, Patel said.

That was great news to at least one Three Rivers hotelier, who offers a comparatively humbler — and affordable — stay at the Sequoia Motel a mile up the road from the proposed resort.

“It’s not going to compete with us,” said Chris Schlossin, who opened the 12-room motel 23 years ago. “Three Rivers doesn’t have anything of that caliber. It would be a little glowing star on the map.”

Competition

For Schlossin, Airbnb is a much bigger threat to business.

Large groups of tourists rent out vacation homes on the app for rates at which local lodgings can’t compete. The county presented a draft short-term rental ordinance that Schlossin hopes will remedy the situation with occupancy limits on Airbnb homes.

Neither Airbnb or Sequoia Motel is likely to compete with the luxury project Patel envisions, however.

“It’s a high-end place. That’s something the county doesn’t have,” Schlossin said. “It’s encouraging that they’re reaching out to the community. You gotta give the man (Patel) credit for being a good neighbor.”

Patel committed to incorporating local businesses into the hotel’s operation, so long as they “meet a high operational standard,” including a restaurant and retail space. He hopes that the resort could be a draw during the off-season, benefiting local businesses.

“You only have three-to-four months to make your money here. If they could improve business during the shoulder months, that would be wonderful,” Schlossin said.

The bulk of the 102,000-square-foot project will be built offsite, so builders can erect the building in Three Rivers in a matter of days, minimizing disruption to the environment and neighbors, Patel said.

Housing for the hotel’s estimated 30 employees will be included with the project, so as not to further crunch Three River’s long-term rental and housing market.

He also addressed community concerns surrounding water and the area’s fickle water table.

“This is the water nobody else in the community wants, but that we will use and pay dearly to use,” Patel said, pointing to a state-of-the-art company the developer hopes to partner with to treat water and manage effluent.

Besides water, many residents were concerned about the possibility of a rumored incentive to build the $30 million hotel project in Tulare County.

Last year, the Sierra Star reported that Madera County supervisors cut Patel a deal to move ahead with a similar hotel project in Oakhurst, near Yosemite National Park.

The incentive took the form of a 50% rebate on the hotel’s transient occupancy tax over 25 years. TOT is a tax levied on travelers who stay at a hotel for fewer than 30 days.

The rate varies by county. In Tulare County, the TOT is 10%.

Crocker said the county hadn’t settled on a number yet and discussions with developer Patel Group were still ongoing.

“I understand why (the county) would (offer Patel) a deal for an upscale development, but it’s still frustrating that other hotels have to pay the full tax. We didn’t get any breaks,” Schlossin said.

The supervisor pointed out that such arrangements were common and would benefit both the county and the developer, providing financial incentives to build while capturing tax revenue that wouldn’t otherwise exist.

“The TOT rebate is favorable to attract business and generate long-term economic activity and taxable commerce,” Crocker said.

Some at the town hall questioned whether that tax should be used to benefit only the Three Rivers community, rather than the county’s general fund.

The argument was a no-go for Crocker.

“While Three Rivers does generate more TOT tax, other county communities generate much more sales tax or property tax and we don’t give them special treatment,” Crocker said. “I’m not going to write a blank check to Three Rivers or any other county community.”

The supervisor pointed to a $400,000 restroom project and expansion of the Three Rivers Historical Museum slated to be completed by the of the year.

The project was paid for out of the county’s general fund, Crocker said.

https://www.visaliatimesdelta.com/story/news/local/visalia/2019/07/26/30-million-boutique-hotel-planned-three-rivers-despite-concerns/1827892001/

Cutting Edge Company Creates Opportunity Zone Fund

PRESS RELEASE

 

July 19, 2019

 

FOR IMMEDIATE RELEASE

 

Contact:

Bobby Kahn

Executive Director

Madera County EDC

559-675-7768

bkahn@madercountyedc.com

 

Bill Pitman

CEO/Managing Member – Benton Enterprises

(559) 664-0800

bill@elkridgealmonds.com

 

Cutting Edge Company Creates Opportunity Zone Fund

A Madera County business specializing in state-of-the-art food safety technology has launched the region’s first qualified Opportunity Zone business and on June 19, 2019, The Berenda Opportunity Fund, LLC was formed. Also organized at that time, a second new entity named H-ATS to acquire certain assets of Benton Enterprises, LLC including, intellectual property under the name Adaptable Technology Systems (ATS), Heart Ridge Farms (HRF) and Elk Ridge Almonds (ERA).

ATS developed a proprietary process to reduce pathogens through a science and energy based technology to maximize food safety, preserve the integrity and taste of the food products. These techniques will significantly improve safe food handling for a wide variety of foods. Both Heart Ridge Farms and Elk Ridge Almonds currently utilize this technology for the retail brand (HRF) and bulk processing of almonds and pistachios (ERA).

Opportunity Zones are census tracts that were nominated by governors of each state and certified by the United States Treasury into which investors can invest in new projects to spur economic development in exchange for certain federal capital gains tax advantages. The opportunity zone tax incentive was adopted on December 22, 2017 as part of the Tax Cuts and Jobs Act that provides tax incentives for investments in underserved communities.

Opportunity Zone Funds are investment vehicles that require at least 90% of their capital in “Qualified Property,” which includes stock, partnerships, interests and business property. The fund model enables a broad array of investors to pool their resources in Qualified Zone Property, increasing the scale of capital going to investments in which the Opportunity Zone Fund will invest. An Opportunity Zone Fund provides material tax benefits for investors with capital gains from other investments.

William B. Pitman, with over 40 years of farming and food processing experience, founded Benton Enterprises in 2013. Recognizing the need for improved food safety while preserving and enhancing its product integrity, led to the development of a low temperature process for several types of locally grown nuts marketed for retail sales under brands Heart Ridge Farms (retail) and under Elk Ridge Almonds (bulk). “The H-ATS combination of the Benton businesses and the ATS technologies creates a food safety solution worldwide” said Pitman. “The need for better food safety while preserving the quality is critical and we feel we can help meet those needs with our proprietary technologies,” he added.

Pitman met with the Madera County Economic Development Commission to obtain information about Opportunity Zones and had this to say, “Bobby Kahn was very helpful in getting me started in the right direction”. “Bobby explained the basics of how an Opportunity Zone Fund works and provided me with names of people that could provide the expertise in the formation of an Opportunity Zone Fund” Pitman added.  It is interesting to note that Pitman represents a 7th generation Madera county family that has deep roots in agriculture.  The project consultants are the accounting firm of Moss Adams LLP (Fresno) and the legal firm, Cutting Edge Counsel (Oakland).

 

###

 

About Opportunity Zones: Opportunity Zones are a new tool for community development. Established in the Tax Cuts and Jobs Act of 2017, Opportunity Zones provide tax incentives for investment in designated census tracts. https://opzones.ca.gov/

 

About The Berenda Opportunity Zone Fund: Located inside a qualified Opportunity Zone. Under this new tax codes, this is a qualified fund for the new investors to enter through.

 

About H-ATS:  An opportunity zone business that includes Heart Ridge Farms (HRF), Elk Ridge Almonds (ERA) and Adaptable Technology Systems (ATS).

 

About Benton Enterprises: Benton Enterprises will manage both H-ATS and The Berenda Opportunity Fund.

 

About Madera County EDC: Madera County Economic Development Commission (MCEDC) is a joint Powers Authority comprised of the County of Madera, the City of Madera, and the City of Chowchilla. MCEDC’s mission is to support dynamic and diverse industry sectors that provide family sustaining wages and a high quality of life. MCEDC assists business with development projects, site selection, demographics, and business incentives. www.maderacountyedc.com

Plans to create medical school in Valley takes shape

Friday, June 7, 2019 6:29PM

FRESNO, Calif. (KFSN) — Creating a medical school in the Valley brought dozens of leaders to UCSF Fresno.

“The San Joaquin Valley has roughly 150 doctors per 100,000 residents. In contrast, San Francisco has 411 per 100,000 residents. You can see the dramatic difference that exists. This is one of the most underserved medical regions in the country,” said Assemblymember Adam Gray.

Gray helped lead the first San Joaquin Valley Coalition for Medical Education. He’s currently working on AB 1606 to help fund the school by not allowing people to write off their gambling losses on their taxes and using that fund.

The school would likely need $500 million to get started.

At Friday’s meeting leaders spoke about combining facilities and programs to jumpstart the school.

UCSF Fresno and UC Merced would combine forces to educate students.

“Getting a medical school started is extremely complicated there are a lot of regulatory barriers, political challenges and funding challenges. We’re excited to be partnering with UCSF, the Fresno office on a path to solving those problems,” said Gregg Camfield, UC Merced Executive Vice Chancellor.

UC Merced is working to create programs for the next generation.

“You name it, every kind of health professional is needed in the Valley and we’re committed to helping to produce that workforce,” said Camfield.

More than 300 doctors are currently training in the Valley through UCSF Fresno.

“Helping to develop students from the region who come from in those underrepresented areas in medicine will allow us to put people out into the community to provide care” Michael Peterson, UCSF Fresno Associate Dean.

Keeping the community healthy with a strong workforce of health professionals

“Lawmakers, University officials and leaders hope to the ideas from this meeting and to build more partnerships and find more funding. The San Joaquin Calley Coalition for medical education plans to meet later this year.

Hotel construction is booming as developers bet on Bakersfield’s economy

Expectations that Bakersfield’s economy is on the rise have created the city’s biggest hotel boom since the Great Recession.

Half a dozen hotels with a combined 658 rooms are proposed or under construction, all on the city’s west side and many of them extended-stay properties geared toward business travelers. Some of the incoming brands are entirely new to the city.

Hoteliers say the rush of private investment is being driven in part by other local projects, such as the Amazon distribution center under construction near Meadows Field Airport. There’s also a sense the city’s relatively low housing and labor costs have created an incentive to build while the savings last.

IMPROVING CONDITIONS

Conditions in Bakersfield’s hotel market have improved significantly during the past decade — the city’s occupancy rate is up more than six points, average room rates have increased 25 percent and Bakersfield’s hotel room inventory is up 12 percent, according to hotel data tracker STR.

Those numbers alone don’t explain the construction seen in the market lately, said Francois Khoury, general manager of the DoubleTree by Hilton Bakersfield, which is finishing up more than $15 million of renovations that began in April of last year.

He said a bigger factor in the recent investment is anticipation that oil prices are on the way up and that now’s the time to prepare for good times ahead in the local economy.

“Everybody wants to be ready,” he said.

AFFORDABILITY AND GROWTH

Jenny Hlaudy, general manager of The Courtyard by Marriott, sees affordability as bringing investor attention to the Bakersfield market. Land is inexpensive locally, she said, and so are housing costs.

At the same time, the area’s overall growth, combined with large construction projects going on around town, are helping not just hotels but also local restaurants and stores. She said the net effect is a desirable place to build new lodging.

“It’s huge,” she said of the hotel boom. “We haven’t had that much growth, as far as hotels, in many years. … It’s going to truly impact this city.”

One of the new hotels coming online later this year is a 113-room Home2 Suites by Hilton west of Coffee Road near Brimhall Road. Director of Sales Denise Connor said a large housing-residential-retail project proposed nearby, the Bakersfield Commons proposal, is probably one reason why the hotel is being built.

“With the Bakersfield Commons coming in, that is going to bring in potential new growth,” Connor said. She added that new roads projects and the Amazon center are further positive signs that could lead to business for the hotel.

SHARED BENEFITS

David Lyman, manager of Visit Bakersfield, the city’s convention and visitors bureau credited an increase in local events for recent hotel investments, as well as travelers stopping overnight on their way to national parks to the north and south.

Whatever the reason, Bakersfield’s hotel tax — a 12 percent addition to the cost of a room — is now bringing in more money than it ever has. This fiscal year alone the tax is projected to raise $9.7 million for the city’s general fund.

Add that to the money visitors spend on meals and supplies, he said, and the local hospitality industry becomes an economic force that is growing fast.

“These projects create and retain jobs, not just the people who work in the hotels and restaurants,” he said. “We all like to keep that money flowing locally.”

https://www.bakersfield.com/news/hotel-construction-is-booming-as-developers-bet-on-bakersfield-s/article_b7730026-87e1-11e9-8101-2fe0197fa532.html

Opportunity Zones’ Spur New State Tax Incentives

 

STATELINE ARTICLE

April 3, 2019

By: Sophie Quinton

 

Editor’s note: This story was corrected April 4. Due to an editing error, an earlier version of this story incorrectly named Novogradac & Co. LLP.

Governors helped the U.S. Treasury Department choose nearly 9,000 economically distressed “opportunity zones” where people can get a tax break for investing in certain businesses and properties. But the 2017 federal tax law that created the zones doesn’t allow governors or state lawmakers to steer investors’ money into certain projects.

They’re trying to influence the market anyway.

This year 17 state legislatures have considered opportunity zone bills, including proposals for additional tax breaks to lure investors or encourage certain projects, such as affordable housing or solar energy development, according to Novogradac & Co. LLP, an accounting and consulting firm that is keeping track.

The federal government is expected to announce a second round of proposed opportunity zone regulations any day now, which would give many investors confidence to start striking deals.

“Through the added incentives, states can encourage the type of development they want to see in opportunity zones,” said Michael Novogradac, managing partner of Novogradac & Company.

Novogradac cautioned, however, that ultimately cities and counties may have more power over what gets built in a zone than states do. Last year, for example, the City Council in Boulder, Colorado, halted some development in its zone, citing the need for more planning.

“I do think they can bend the curve to be sure,” Novogradac said of states. “But at the end of the day it really depends on local government and local policies.”

Trump Tax Break Aims to Turn Distressed Areas Into ‘Opportunity Zones’

Much of the early investment in opportunity zones is flowing into real estate. Sales of undeveloped land, previously developed but vacant land, and properties ripe for demolition and redevelopment surged in zones last year, according to a December report from Real Capital Analytics, a company that tracks real estate markets.

New York City, Los Angeles and Phoenix may be the hottest markets for opportunity zone funds, the report said.

Some state lawmakers want to tip the scales in favor of projects their constituents need but may be riskier or less lucrative than a new hotel or apartment building in a big city.

California Gov. Gavin Newsom, a Democrat, has proposed a state tax break like the federal one, though it would apply only to green technology and affordable housing projects.

Maryland Gov. Larry Hogan, a Republican, wants to lure businesses into zones with additional tax breaks for creating jobs, expanded workforce training assistance, and more funding for affordable housing development and small-business loans, among other incentives.

 

 

Washington state Rep. Mike Chapman also is interested in offering state tax credits to opportunity zone investors who can create jobs in economically depressed rural areas.

“We don’t have a lack of construction work in this state, so it’s not like we need to build more buildings,” the Democrat said. “We need jobs in rural counties that are living wage jobs where people can consistently receive a paycheck.”

A ‘Windfall to Investors’

To get the federal tax break, people must invest earnings from selling stocks, bonds or property in a fund that, in turn, invests in businesses or property in an opportunity zone. Investors who put money into such a fund can defer paying taxes on their gains right away and earn a 15 percent tax cut on the gains after holding their shares for seven years.

Investors who hold their shares for 10 years don’t have to pay capital gains taxes on money they make from those shares.

Most states have adopted a similar tax break. Nine states have not aligned with the federal tax break because they don’t tax incomes. Lawmakers in eight states have either declined to offer the same incentive or haven’t acted yet, according to Novogradac. But it’s not clear that creating a state version of the federal opportunity zone tax break will make much of a difference to investors.

Federal tax law typically influences people’s choices more than state tax law, the California Legislative Analyst’s Office, a nonpartisan adviser to the legislature, said of Newsom’s plan in a recent report. “Any state tax benefit provided would be a ‘windfall’ to investors because they likely would have made the investment even without the state benefit,” the report said.

Some progressive advocacy groups say the state tax breaks are a waste of money.

“It’s going to be going to the investor class, which is not a piece of our society that we need to help,” said Jody Wiser, executive director of Tax Fairness Oregon, a nonprofit pushing to eliminate Oregon’s version of the opportunity zone tax break.

“Most of the money will be spent where money was going to be spent anyway,” she said.

She pointed to zones in downtown Portland that already are filling up with office buildings and trendy restaurants.

Piling on Tax Breaks

Lawmakers are looking for other ways to use the state tax code to spur investment, particularly in businesses.

Encouraging investors to put money into businesses under current opportunity zone rules could be a challenge. State economic development officials have called for clarifying some of the criteria, such as the requirement that eligible businesses must derive half their income within a zone.

That requirement could disqualify “most e-commerce companies, manufacturers, and other businesses with the potential to create significant numbers of new jobs and wealth for their communities,” officials from Rhode Island, Utah and Louisiana wrote in a recent op-ed in The Hill.

West Virginia Del. Joshua Higginbotham, a Republican, has proposed giving investors in zone businesses a 10-year reprieve from state income and business taxes.

“What we wanted to do in West Virginia,” he said, “is make sure that our 55 opportunity zones are the most competitive of any opportunity zones in the country.”

Last week West Virginia Republican Gov. Jim Justice vetoed Higginbotham’s proposal, but the legislator said he plans to push his bill again during an upcoming special session without the amendments Justice opposed.

Washington’s Chapman wants his state to offer $60 million in business tax credits to investors in opportunity zone funds focused on rural, economically depressed counties.

Funds would need permission from the state Department of Commerce to pass on the credits, and if they were to misuse the taxpayer dollars, they’d have to pay the state back.

The Senate has amended the bill to conduct a study on rural economic development programs, including tax credits, before the state makes any investments.

In Maryland, Hogan has proposed both new tax credits and expanding existing economic development programs — such as one that pays for the demolition of derelict buildings — to advance projects in opportunity zones.

“We’re really tying together everything that we were already doing and trying to use it to bolster the opportunity zone investment,” said Sara Luell, director of communications for the Maryland Department of Housing and Community Development.

The additional state assistance would be available to any business or real estate project in a zone, she said, even those not receiving money from an opportunity zone fund.

Hogan recently toured a real estate project that will turn 40 acres of parking lots near a light-rail station into a hotel, office space for health care company Kaiser Permanente, apartments, a parking garage, and shops and restaurants.

An opportunity zone fund will help finance the apartment buildings, said Scott Nordheimer, a partner at Urban Atlantic, the company behind the project. But the project also relies on a long list of other incentives, he said, including state income tax credits and Prince George’s County’s multimillion-dollar investment in streets, utilities and other infrastructure on the site.

Without county help, the development would still be a parking lot.

“You could not privately finance the infrastructure,” Nordheimer said.

https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2019/04/03/opportunity-zones-spur-new-state-tax-incentives?utm_campaign=2019-04-03+Stateline+Daily&utm_medium=email&utm_source=Pew

NEW STATE GROUP TO PROMOTE OPPORTUNITY ZONES

image via caloz.org

image via caloz.org

Published On March 25, 2019 – 11:58 AM
Written By The Business Journal Staff

A new California organization has been formed to help investors and developers take advantage of federal Opportunity Zones.

CalOZ “will promote competitive, equitable and sustainable Opportunity Zone investments in California,” according to a release from the organization.

“Our state must embrace new strategies to rebuild an upward economy that works for all Californians,” said Kunal Merchant, president and Co-Founder of CalOZ. “Opportunity zones offer an important new tool, not only to promote economic mobility and the green economy in areas of our state that need it most, but also to re-evaluate and re-imagine how business, government, and community work together to foster a more competitive, equitable and sustainable economy in California.”

In President Donald Trump’s 2016 Tax Cuts and Jobs Act, he outlined what was labeled Opportunity Zones, which offered tax breaks on capital gains for investments in distressed areas.

In Fresno, a number of the areas were established, including the Kings Canyon and Blackstone avenue corridors.

On average, Opportunity Zones have a poverty rate of nearly 31 percent with families making 59 percent of the median income for the area, according to the release, citing information from Economic Innovation Group.

“Opportunity zones offer an intriguing new pathway for our state to expand our middle class and restore the California Dream for all residents,” said Ashley Swearengin, Central Valley Community Foundation’s CEO and former Mayor of Fresno. “I’m thrilled to see CalOZ showing leadership on this issue and excited to support their work both in the Central Valley and state as a whole.”

CalOZ’s first priority will be coordinating with the state to create “high-impact” policies in addition to the ones being offered by the federal government. The plan is to create a “triple-bottom line mindset” for social, environmental and financial opportunities, according to the release.

“With more than three million Californians residing in opportunity zones, California can and must seize the chance to deploy an unprecedented source of private capital into the communities that need it most, “ said Jim Mayer, President and CEO of California Forward. “We’re proud to partner with CalOZ to support state and local action to ensure California emerges as a national leader in this program.”

The U.S. Department of the Treasury certified more than 8,700 qualified areas throughout the country. Of those, California has around 10 percent within its boundaries. And Fresno County is ranked third in terms of having the largest designated Opportunity Zones, according to Merchant.

Those designations will last through the end of 2028.

New state group to promote Opportunity Zones