- AL Reading Service
Alex Flachsbart’s business cards were hot properties at the Jefferson County Courthouse Tuesday after his presentation to the County Commission about opportunity zones in the area.
The founder and CEO of the nonprofit Opportunity Alabama briefed the commission on his group’s work with Opportunity Zones, which encourage investment in low-income areas.
“Our goal is to rally the ecosystem here in the state of Alabama around opportunism,” he said.
Flachsbart, a former tax attorney, said the zones were created with the passage of the tax bill in December. The idea is to give tax breaks to investors who put their money into a fund that then invests in businesses and real estate projects in low-income areas. The incentives grow the longer the money stays invested, he said.
“(It goes) all the way to the point where if you’re an investor who keeps their money in a fund that’s invested in the local community for 10 years or longer, you don’t pay any tax at all on the appreciation of your investment,” he said. “If I make a good bet on a place like Ensley, or a place like East Lake or a place like Fultondale, the good news (is) that, if my investment substantially improves, I get to walk away tax-free after 10 years.”
County commissioners were clearly impressed.
“The opportunity zones are a godsend for Birmingham and Jefferson County,” Commission President Jimmie Stephens said. “It allows an influx of investment that we haven’t had. It adds a tool to our toolbox in order to bring economic development and redevelopment back to Birmingham and to Jefferson County.”
The governor’s office, with advice from the Alabama Department of Economic and Community Affairs, has designated 158 areas across the state as Occupation Zones. The Birmingham area has 26 census tracts designated as Opportunity Zones. Many of those are clustered along the Interstate 20/59 corridor, at the I-20/459 junction and north along I-65.
The community benefits when Opportunity Alabama puts projects in front of potential investors, Flachsbart said.
“If we can find good, developable assets that have both the community benefit and a potential cash flow for investors, that’s our goal,” he said. “That’s what we’re looking to find.”
Flachsbart said the program is having an impact across the country.
“The treasury secretary estimates that about $100 billion worth of new investment will flow through this program before the end of 2019,” he said. “It’s an incredible new economic development tool. It has a national footprint and it just so happens that national footprint has a very large home here in Jefferson County.”