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Port Townsend council authorizes staff letter backing Opportunity Zone 2 nomination
Summary
After a presentation on the program’s ‘‘triple tax benefit,’’ the council voted to authorize a staff letter supporting nomination of Port Townsend’s eligible census tract for the federal Opportunity Zone 2 designation to encourage investment and potential housing and job projects.
David Ballas, executive director for the Jefferson Economic Development Council, told the Port Townsend City Council that the revived federal Opportunity Zone program could steer private capital into the city if the area wins state and federal nomination.
"The program has a triple tax benefit for investments in designated so called opportunity zones," Ballas said, explaining the deferral and step-up in basis rules and a larger rural bonus that could apply in Port Townsend.
Ballas described the state nomination process as competitive and urged the city and regional partners to assemble ‘‘real’’ investment-ready projects, letters of investor interest, evidence of permitting and business plans that match the Department of Commerce scoring rubric. He said the program’s benefits include deferred capital gains, a 30% rural basis step-up after five years in qualifying areas, and potential elimination of capital-gains on appreciation after 10 years for qualifying investments.
The council moved, seconded and approved a staff-recommended motion authorizing a letter of support for the city’s potential Opportunity Zone 2 nomination, citing potential advantages for workforce housing, new living-wage jobs and infrastructure improvements. The staff motion emphasized the need to demonstrate project readiness to win limited state nominations.
City staff said the governor will submit nominations to the federal Treasury and that competitive scoring by the state Department of Commerce will weigh investment-readiness and community benefits. Ballas and staff advised the council that the program’s new round will start January 1, 2027, and emphasized a tight timeline for assembling documentation and project commitments.
The council’s authorization directs staff to prepare a letter of support and continue coordinating with regional partners and potential investors. No fiscal commitment beyond staff time was approved at this meeting.
