The school would likely need $500 million to get started.
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.
21 percent of employers nationwide plan to add employees
Two Central Valley metros are topping that
In the third quarter of 2019, 27 percent of U.S. employers expect to increase payrolls, 3 percent anticipate a decrease and 69 percent expect no change.
Once the data is adjusted to allow for seasonal variation, the national Net Employment Outlook for the U.S. stands at +21 percent, the strongest reported in 13 years.
Hiring intentions are 2 percentage points stronger when compared with the previous quarter, and improve by 3 percentage points in comparison with this time one year ago.
Employers in 28 percent of businesses surveyed in the West expect workforce gains during the coming quarter, while 3 percent anticipate a decrease and 68 percent expect no change. The resulting Net Employment Outlook stands at +25 percent. Once the data is adjusted to allow for seasonal variation, hiring plans for the region are the strongest reported in more than 11 years. Employers report a slight quarter-over-quarter improvement in the Outlook, and a moderate increase when compared with this time one year ago.
In three of the West’s industry sectors, employers report moderately stronger hiring intentions for Quarter 3 2019 when compared with the previous quarter: information, professional & business services and transportation & utilities. Slightly stronger hiring prospects are reported in four of the region’s industry sectors: financial activities, government, leisure & hospitality and nondurable goods manufacturing.
Education & health services sector employers in the West report a relatively stable labor market in a comparison with the second quarter of 2019, Manpower says.
During the next three months, job seekers in the West’s durable goods manufacturing and other services sectors can expect moderately weaker hiring activity when compared with the previous quarter, according to employers. Employers in the region’s construction and wholesale & retail trade sectors report slightly weaker hiring plans.
Manpower says 31 percent of employers in the Sacramento metropolitan area expect a net employment increase in the third quarter, one of the strongest performances in the nation.
More than one out of four (26 percent) of employers in the Stockton metro expect a net employment increase in Q 3, on par with Boston, Columbus, Omaha, Phoenix, and Washington, D.C.
Twenty percent of Bakersfield employers told Manpower that they plan to increase their workforces in the third quarter and 19 percent of those in the Fresno MSA said the same.
Employers in the Midwest report the strongest hiring prospects in 18 years, with Manpower’s outlook improving by 2 percentage points in comparison with Quarter 2 2019.
In the Northeast, hiring plans are 1 percentage point stronger when compared with the previous quarter and the outlook reported in the South is unchanged. The strongest regional hiring pace is expected in the West, where the outlook is +22 percent. Midwest employers report an outlook of +21 percent, and outlooks stand at +20 percent and +19 percent in the South and the Northeast, respectively.
In a comparison with the second quarter of 2019, hiring prospects are slightly stronger in the West and the Midwest, says Manpower. Northeast employers report relatively stable hiring plans, and the outlook for the South is unchanged. When compared with this time one year ago, employers in the West report moderately stronger hiring intentions. Slight year-over-year improvements are reported in the Midwest and the Northeast, while employers in the South report relatively stable hiring plans.
Something new under the Valley sun: Marketing a table grape
• Delano growers start marketing what they say is a new table grape
• Tie marketing to pro basketball
Two families of grape growers in the Central Valley have partnered with the National Basketball Association to
introduce consumers to what they say is a new variety of table grapes.
The Campbell and Middleton families, owners of Blanc Vineyards in Bakersfield, have entered the company into a
multi-year licensing deal with the NBA that will see official league and team logos on packaging for its newest
varieties, including the “Pristine,” at supermarkets and in big box stores nationwide starting this month.
The Pristine, a large, crispy, green seedless grape, is the flagship proprietary variety grape of Blanc Vineyards. The
growers claim it is the best green variety globally. It’s the result of more than 20 years of cultivation, they say.
Sounding more like wine tasters, the growers say the grape “has a crisp snappy texture coupled with a taste that
starts off with a sweet vanilla streak and ends with a zesty Granny Smith apple finish.”
They are grown to retain firmness and fresh taste well after harvest. “Green grapes are natural, healthy snack food. To most
consumers, they’re all the same, but they’re really not, which is why we believe the NBA partnership makes
sense,” says Jack Campbell, co-owner of Blanc Vineyards. “The NBA does an unbelievable job ofhighlighting their athletes, and we are applying the same strategy to the grape industry.”
He says the growers thing that by putting consumers’ favorite sport- or team-logo on our packaging, they will be
able to instantly differentiate their products with a familiar and trusted name. “That gives us a huge advantage at
points of purchase and again for return sales,” Mr. Campbell says.
The NBA licensing agreement isn’t the first for the Campbells. Since 2015 the family has entered into licensing agreements with a variety of firms such as the Walt Disney Company to reach new customers.
According to the U.S. Department of Agriculture grapes represent a $6 billion crop in the U.S. with more than
seven million tons produced each year between 2015 and 2018, mostly in California. Blanc Vineyards is a joint venture between Four Star Fruit
Inc. and Delano Farms Inc. that began in 2010 in Delano, after growing grapes in Kern County for decades. This partnership gives both companies exclusive rights to grow and distribute Pristine variety grapes. The companies sell grapes from May to January and ship a combined 20 million boxes annually.
South Los Angeles, California (Photo: Alfred Twu/Wikimedia)
More than three million Californians live in some 879 federally designated Opportunity Zones in disadvantaged communities throughout the state. California has more Opportunity Zones than any other state.
The federal Opportunity Zone incentive allows investors to defer federal taxation on capital gains by investing the proceeds through a qualified opportunity fund into a designated Opportunity Zone. To be eligible for the full benefit, investments must be long-term (at least 10 years) and meet a set of rules designed to ensure these investments create additional economic activity in Opportunity Zone communities.
To maximize the potential impact for Opportunity Zone residents, the state needs to pass legislation that will help communities become “Opportunity Zone Ready.”
“No such action has been taken yet in California,” CA Fwd CEO Jim Mayer wrote recently. “This is a serious missed opportunity to tap an unprecedented source of private capital in communities that need it most, and the state is running out of time to act.”
Governor Newsom has shown support for Opportunity Zones and ensuring California is a competitive environment for impact investments that can support community-building projects and local businesses. As the governor said at the Opportunity Zone Investor Summit at Stanford University last month, for the program to succeed it must spark investment while benefiting existing residents, rather than just investors. “We don’t just believe in growth,” Gov. Newsom said at Stanford. “We believe in inclusion. You can’t have one without the other.”
“Opportunity Zones provide an excellent opportunity to revitalize low-income areas in California,” said Lenny Mendonca, chief economic and business advisor to Governor Newsom. “In order to move the economic needle for millions of Californians who are struggling, attracting investment in areas where they live is sound policy that can help us meet our objective of making California’s economy more sustainable and inclusive.”
One example of a community that could benefit is the city of Lynwood, where roughly 70,000 people live in the working-class area of south east Los Angeles County.
“Economic development is a strategic priority for our city and many more like us,” said Jose Ometeotl, Lynwood city manager. “This investment vehicle can help us attract capital, improve our tax base and create jobs for our residents. I expect Governor Newsom and the Legislature will make sure California conforms to the federal requirements so communities like ours can compete for investment. ”
CA Fwd and Golden State Opportunity will release a new study next week showing that between $745 million and $1.2 billion in new economic activity in Opportunity Zones could be generated this year. In subsequent years, increased economic activity would range from more than $700 million to nearly $500 million.
“This study reaffirms what we already believed. Opportunity Zones will generate a significant return on investment and a much-needed boost to underinvested communities at a relatively minor overall expense to the state,” said Josh Fryday, president of Golden State Opportunity. “Opportunity Zones can be an important community-driven investment tool that complements other investments by the state and philanthropy in people, places and much-needed projects.”
These incentives would mean a potential revenue loss to the state of $65 million annually between 2019 and 2025, while local tax revenue is expected to cumulatively increase by $68 million over that same time period. Critics have said this incentive is an unnecessary expense, but according to the study, state support for Opportunity Zones will generate at least 10 times the economic impact in these areas, and state tax revenue would be largely recovered when deferred capital gains taxes are paid following the 2026 year.
“We are encouraged by the excitement in the investor community and encourage everybody to think about these investments as not simply about a tax benefit but about measurable long-term economic impact on the communities they are meant to serve,” Mendonca added.
The California Economic Summit in 2018 developed a framework that emphasized three steps that must be taken to maximize the social benefits of Opportunity Zones:
Make state resources available to communities that want to be “Opportunity Zone-ready”
Align state community, economic and workforce development funds to leverage social and environmental benefits of Opportunity Zones
Conform state capital gains tax treatment to the new federal law
Governor Newsom and legislative leaders will be sent the report on Monday and a series of meetings explaining the potential benefits are being scheduled.
“California is one of few states that have not yet enacted legislation conforming to the federal program,” said Mayer. “We believe that as legislators learn more about the program, they’ll make sure California isn’t left behind.”
“It’s like a California version of the New York versus New Jersey thing—but maybe worse,” Smith says. “You’re so close to one of the biggest metro areas in the country, but never quite there.”
Like many of his generation, Smith, 37, moved to bigger cities in search of opportunity. In his case, he sought work in urban planning and commercial development in Los Angeles and the Bay Area. But as he developed a passion for downtown revitalization, he began wondering, why not Bakersfield? He returned to his hometown in 2014 with a hunch that the city was ripe for redevelopment, and soon began work on what would become the 17th Place Townhomes.
Since opening in 2016, the high-end three-story, 44-unit downtown development represents the first market-rate housing built in the city’s core in decades. It’s not every day the city gets new housing, complete with a dog park, fountains, and a fire pit. Now that the development is fully leased—not a small accomplishment for new housing asking the highest rent in town, at between $1,630 and $1,830 for a two-bedroom—its success has convinced Smith and his firm, Sage Equities Real Estate, to break ground later this year on a new 53-unit project downtown.
“What we’re doing is a real niche product,” he says. “But you can really start seeing people get excited about this neighborhood.”
A bet on Bakersfield and rebuilding downtown
Smith’s bet on Bakersfield represents a new era of development, however small, for this Central Valley city. A recent report from the National Association of Realtors (NAR) found Bakersfield to have one of the highest rates of millennial movers and homeowners, setting off a series of stories written with a tone of “wait, that Bakersfield?” as if it were a shock that somebody might find the city was both a good value and a good opportunity.
After all, compared to coastal California, where were the high-paying tech jobs and new homes? When California Gov. Gavin Newsom announced the state’s troubled high-speed rail project would focus on the Bakersfield to Merced section, connecting two Central Valley locations, many rail supporters felt Newsom was saying the train would never connect to LA or San Francisco.
The 17th Place Townhomes helped bring more attention to a newly christened neighborhood, Eastchester, that’s beginning to blossom, and includes restaurants, coffee shops, and new businesses. In this formerly industrial stretch of town, business owners are finding new uses for old buildings, including Cafe Smitten, another Smith project, and Dot x Ott, a just-opened seasonal kitchen that sources its produce from a farm 10 miles away.
Though tiny, the downtown turnaround is palpable, says Debbie Lewis, a wealth manager who moved back to Bakersfield a few years ago.
“The downtown that I grew up hearing about and knew as a young adult was a ghost town that people were hesitant to visit and a place that businesses had a hard time sustaining,” she says. “Now, it appears to be growing at a slow but steady pace and an inspiring amount of businesses have are continuing to decide to take that leap, get creative, and get in on the action. People are starting to see the positive impact of investing more care, money, and time in our downtown.”
While the city’s current growth spurt has been out, not up, as nearby farmland has been turned into housing developments, there are a lot of buildings with good bones downtown, according to Gunnar Hand, an urban designer with architecture and planning firm Skidmore, Owings & Merrill (SOM). Hand led a team that devised a new downtown plan for Bakersfield in 2016, in anticipation of the arrival of high-speed rail. They found the beginning stages of placemaking investments had already laid the groundwork for the nexus of new downtown development.
“This is, for lack of a better term, a third-tier city that’s only now coming around to urban revitalization,” says Hand. “Los Angeles is 20 to 30 years into revitalizing its downtown. Kansas City, [Missouri], my hometown, is 10 years in. Bakersfield is in, like, year one.”
Moving back and making a new start
When talking to Bakersfield residents who left town for college or careers and have now returned as older adults, affordability is a constant theme.
It helps in California to have housing that’s actually affordable. With a median home value of $241,000 as of last March, and median starter homes beginning at just $145,300 according to Zillow, it’s no surprise that the median age of a first-time buyer in Bakersfield is just 33. The city’s sprawling growth pattern has played a big role in creating cheap housing; as the city and metro region grew out, Bakersfield’s population ballooned from 70,000 in 1970 to more than 380,000 today.
According to NAR researcher Nadia Evangelou, these newly arrived millennials can afford to buy nearly 15 percent of homes currently listed for sale in Bakersfield, compared to only 4 percent in Los Angeles.
“Millennials still move to big metro areas such as Los Angeles and San Francisco,” she says. “But we see that they don’t stay in these areas, because of weak affordability conditions.”
But the real draw goes beyond affordability. Cheaper housing enables many of the Bakersfield boomerangs to buy rather than rent, have a better quality of life, and start businesses, all of which might be unaffordable in other California cities.
For Jessie Blackwell, a cofounder of Dot x Ott, the seasonal restaurant and market just a few blocks from the 17th Place Townhomes, now is the perfect time to open a new kind of business in town. The restaurant, which opened last month, is taking advantage of the region’s wealth of farms and fresh produce in a way that just wasn’t really done here just a decade ago
“There’s a food movement here,” she says. “You can see it in the revitalization of downtown, and the handful of farm-to-table restaurants that have come to town. In the last five years, you’ve just seen this boom in farmers markets and so many more local options.”
Melissa Delgado is a product manager for an agriculture company who returned to town in 2011 after studying in San Diego. She found that the city, with its low cost of living, was perfect for growing her career. With the $2,000 or more she would be spending per month on rent elsewhere, she’s been able to buy a house.
“When I first came back here, I hated it,” she says. “I wanted to go right back to the city. But I’ve been able to grow my career here, and the style of living is just so much better.”
Daniel Cater, an architect and designer who recently returned to town with his wife three years ago, has found great opportunity since moving home (Smith hired him to design the townhome project).
“You’re beginning to see a city of half a million support innovation and change,” he says. “For me, it’s exciting to watch a city that hasn’t really found itself, where the entrepreneurial spirit is alive. It’s fun to be in a place where you can get to know the people making an impact, and make an impact yourself.”
Placemaking and the Padre Hotel
Most of the Bakersfield residents interviewed for this story noted that a lot of the new energy downtown comes from people who have returned after moving away, not a flood of new arrivals from other parts of the state or country. There’s still a relatively tight-knit circle of businesses and entrepreneurs in town, often built on local networks. Smith’s dad, for instance, is city Councilmember Bob Smith. And compared to the urban renaissances touted in other cities, Bakersfield’s new developments are not linked to any kind of broad apartment-building boom or big economic expansion yet.
But the catalysts for such change seem to be in place: Two local groups, Kern Economic Development Corporation, a traditional local business group, and Be In Bakersfield, a grassroots nonprofit that promotes new local businesses, have started marketing the city as a place of opportunity.
With some additional investments in transit and placemaking, Bakersfield also has the potential to truly activate its downtown. According to SOM’s Hand, when the firm studied the city in 2016, it found that much of the infrastructure for downtown growth was already finished or in the works. As part of a larger community redevelopment project, Bakersfield developed Mill Creek, a River Walk-style public space and linear park lined with theaters and new businesses. It opened in 2010.
Many of SOM’s suggestions—to create new transit links, connect the city’s already impressive bike lane network, and tie together disparate parts of downtown—have already been done or are in development.
“Our main suggestion was to create infill that brings together Mill Creek with the downtown core,” he says. “That’s already happening now, without the rail station being built.”
In addition to larger urban plans setting the table for more dense development, the successful redevelopment of the Padre Hotel also served as a marker and milestone for downtown. A landmark from the ’20s that reopened in 2010, the ornate hotel at 18th and H streets, a four-star property in the Central Valley, showed many that the city’s stock of old buildings held promise.
“The 17th Place Townhomes and the Padre Hotel are landmark projects for a town this size,” says Hand. “They signal something to the market that didn’t exist before, and it’s starting to snowball. There are local developers taking note.”
Continuing challenges to building a better Bakersfield
Bakersfield has gained momentum, but it still has a ways to go. Like many Central Valley cities, such as Merced, it’s pushing to diversify economically and build new industries, as well as regain the attention of state government after being ignored for many years.
As part of a larger demographic trend statewide, however, these Central Valley cities have seen more attention from new arrivals. Interior metros like Riverside, Fresno, and Sacramento have seen net domestic migration rise from 2012, when this region collectively lost 4,000 people, to 2017, when 38,000 arrived. At the same time, coastal parts of California have grown at a much slower pace, two-thirds less in 2017 than in 2012.
To capitalize on its growing population, Bakersfield’s economy needs to expand beyond health care, agriculture, and oil, and the region needs to invest in creating a more educated workforce. According to the Brookings Institution, among those ages 25 to 34 in the Bakersfield area, 29 percent are in poverty and only 14 percent graduated from college. The city’s persistent problems with air pollution, some of the worst in the state and nation, give potential residents pause.
“We have historically relied on cyclical industries like oil and agriculture, but the truth is, that’s not the future of where the world is moving,” says Anna Smith, a columnist for the Bakersfield Californian, and Austin’s wife. “We need to diversify, and bringing new minds here who have lived in other places is key to the 21st century.”
Anna Smith, like others, has pinned some hope on Newsom’s commitment to the Central Valley, including high-speed rail and other economic plans. Proposals at the local level, like Measure N, an initiative to revive state-funded community development, and a forthcoming update to the city’s general plan, could help finish out some of the placemaking plans SOM and others have proposed to knit together Bakersfield’s downtown.
“Newsom has the opportunity to show us that he can make connections here,” says Smith.
Coming back to feel more connected
The small cadre of new businesses, and Bakersfield residents returning home, suggests a similar story—like those in places like Memphis, Tennessee, or Louisville, Kentucky—is starting to play out. Bakersfield hasn’t had a downtown boom, at least not yet, but the seeds have been planted.
As Debbie Lewis, the wealth manager, suggests, there’s a hunger among young adults to make a mark on their environment.
“They don’t just want to be one of the millions of people swallowed by social media and all the reminders that we’re broke and don’t have any money,” she says. “All that negativity is pushing people to connect with a place and make a difference, and I think that’s possible here in Bakersfield.”
Or, as Anna Smith suggests, affordability isn’t the entire answer, it’s just the beginning. Without the pressure to pay for increasingly high rents, having more time to focus on passion projects and community engagement makes a real difference.
“If you want to say it’s just about affordable housing, that’s not all there is the Bakersfield,” she says. “Young professionals can come here, start a business, and find lower barriers to entry. Most importantly, they can feel connected to the community and make a real impact.”
Published On April 11, 2019 – 2:13 PM Written By David Castellon
California once again led the nation in agricultural sales in 2017, with six Valley counties — along with one along the state’s Central Coast — topping ag sales across the nation.
This according to the U.S. Department of Agriculture’s 2017 Census of Agriculture, which gathers information annually on U.S. farms and ranches and the people who operate them.
Agricultural sales in California exceeded $45 billion in 2017 — about 12 percent of total U.S. ag sales — far outpacing the No. 2 state, Iowa, which had sales totaling about $29 billion, followed by Texas, Nebraska, Kansas, Minnesota, North Carolina, Wisconsin and Indiana.
But while the USDA lists the same top ag counties as the California Department of Agriculture, they don’t list them in the same order.
Most notably, the federal agency lists Fresno County as the top ag county in the nation for 2017.
CDFA placed Fresno County as third in sales that year, behind Kern and Tulare counties, respectively.
CDFA officials couldn’t be immediately reached to determine if the USDA census used different criteria in determining total ag sales.
The other four top ag counties were, in order, Monterey, Stanislaus, Merced and San Joaquin, all of which also are among the top seven ag counties on the USDA’s list.
The top commodities produced on farms nationally were cattle and calves, followed by corn, poultry and eggs, soybeans and milk. California lead the nation in milk production, a total of 18 percent.
Other California highlights from the farm census:
– The state’s top commodities were fruits and nuts, with $17.5 billion in combined sales; vegetables, with $8.2 billion; milk, with $6.5 billion; cattle and calves, with $3.1 billion; and horticulture, with $2.9 billion.
– Total farm production expenses for California totaled $37.8 billion.
– The average age of the California farmer was 59.2 years old, compared to the national average of 57.5 years old.
– Military veterans accounted for 10 percent of California farmers, compared to about 11 percent, nationally.
– At 14,552 farms, California was the top state using renewable energy-producing systems in agriculture. Solar was the most common renewable energy-producing system on farms and ranches in the state.
• They’ll be at a new T-Mobile customer call center in Kingsburg
• Company says it will offer a new level of customer service
T-Mobile U.S. and Sprint have picked Kingsburg in Fresno County as the location for their previously announced Central Valley “Customer Experience Center.” The new call center will have more than 1,000 employees. The companies say the new workers will earn wages on
average over 50 percent higher than the average wages in Fresno County, which will also make the the call center one of the highest-paying employers in the area.
The Kingsburg call center is to have what T-Mobile terms its “Team of Experts” service model, which provides customers direct personal access to a dedicated team of specialists when they call or message for assistance. The specialists are to work with local retail and engineering eams to address a wide variety of topics and tackle complex challenges for customers primarily based in California.
The combined company will have 7,500 more customer care workers in 2024 than the two stand-alone companies would have employed, they say. It all depends, however, on the closing of their merger to become what the companies want to call the “New TMobile.”
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.
When Raj Kahlon was a young boy he had dreams of one day becoming a farmer, even though his father was a businessman. Little did he know, his humble beginnings would lead to that dream becoming a reality. In a relatively short amount of time, Kahlon has become a prominent local pistachio and almond farmer, building the Kahlon family business. Kahlon is now giving back to the community with a $5-million donation to support the agricultural programs at Merced College and the future 20,000-square foot Agriculture and Industrial Technology Complex.
“I believe that Merced College is the foundation of the Merced community,” Kahlon said. “They’ve had strong ties to local agriculture since the school opened and continue to educate the area’s future agriculturists and leaders.
Raj Kahlon is making a $5-million donation to support the agricultural programs at Merced College and the future 20,000-square foot Agriculture and Industrial Technology Complex. It’s the largest gift in the college’s history.
/Courtesy Merced College
The partnership agreement, approved by the Merced College Board of Trustees on Tuesday evening, between Kahlon and the Merced College Foundation will include developing approximately 100-acres of pistachios, which will generate additional funds for the college as well as provide an agricultural land lab for students to learn production and harvesting practices.
“This is the largest gift in Merced College history and the beginning of big things to come,” Merced College Superintendent/President Chris Vitelli said. “I’m proud of the work done by the Merced College Foundation to help make this happen and grateful to Raj Kahlon for his investment in our students and agricultural programs.
“Throughout this process, Raj has expressed his desire to give back to the community who has given him so much. I couldn’t be more appreciative of his incredible generosity and the long-term impact of this donation.”
Kahlon will be honored as the President’s Medallion recipient at the seventh annual State of the College luncheon, which is set to be held on May 8. Vitelli will also recommend to the Merced College Board of Trustees that the College’s new Agriculture and Industrial Technology Building is named after Kahlon.
Jill Cunningham, executive director of the Merced College Foundation, said this gift is near and dear to the school administration’s heart. Vitelli studied agriculture and was very active in the FFA, while Cunningham has deep roots in the Le Grand farming community.
“I’m a third generation Merced College family and I’m thrilled that this donation will propel the next generations to come.”
For more information about the upcoming State of the College luncheon visit www.mccd.edu/foundation or call 209-384-6470.
Blue Devil Notebook is compiled by Merced College staff. It will run occasionally and contain news, information and events happening at the college.
Raj Kahlon is making a $5-million donation to support the agricultural programs at Merced College and the future 20,000-square foot Agriculture and Industrial Technology Complex. It’s the largest gift in the college’s history./Courtesy Merced College