Sunrise Beach will likely soon be an official “opportunity zone.”

Sunrise Beach will likely soon be an official “opportunity zone.” 

The Village of Sunrise Beach has been notified that Missouri Governor Eric Greitens will recommend a census tract that encompasses most of the town for the new federal economic development designation that would then have a 30-day consideration period before final approval. 

City Planner Roger Corbin was excited to receive the news as this new tool could help revitalize development of the Sunrise Market Center, anchored by Woods Supermarket, as well as boost investment elsewhere in town. Census tract 9512 excludes some portions of the village to its extreme eastern and southern boundaries, but includes the majority of land in the Camden County portion of Sunrise Beach along Highway 5 and extending westward outside of city limits.

With the current tax incentives available at the commercial development at Highways 5 and F, Corbin was confident that it would be a boon to filling out the project. Approved around five years ago, Sunrise Market Center incentives include tax increment financing and a community improvement district that helped pay for excavation costs at the site.

There are still multiple utility-ready sites next to Woods Supermarket that have not been developed.

The setup of the new Opportunity Zone, however, could have more widespread implications for development in this area as it may also be able to incentivize housing developments, and given the income requirements for the zone, these projects could produce some affordable housing projects.

According to the Missouri Department of Economic Development (MDED) which with the US Treasury will help administer the program, the federal Tax Cuts and Jobs Act of 2017 allows the governor of each state to nominate certain census tracts for this designation which provides special federal tax treatment for capital gains invested in the zone. The designation allows investors to defer paying taxes on capital gains if they are invested in funds that invest in zones with the amount of deferral increasing with the amount of time the investment stays in the Fund, up to 10 years.

The number of opportunity zones in each state is limited and is based on the poverty rate of median family income of the census tract.

In non-metropolitan areas of the state, eligible tracts must have a poverty rate of at least 20 percent or the tract’s median family income does not exceed 80 percent of the statewide median family income, with the exception of high out-migration rural counties.

Only 25 percent of eligible communities may be designated though.

According to MDED, an investment vehicle organized as a corporation or partnership for the purpose of investing in an Opportunity Zone property and holds at least 90 percent of its assets in qualified Opportunity Zone property qualify as an Opportunity Fund that receives the special deferment on capital gains.

While it would be allowed under federal law, in Missouri, there are currently no state tax deferments attached to this zone. All local and state tax incentives — outside of grandfathered enterprise zones — are handled through the Missouri Works program under the MDED.