A new economic development tool created out of the federal Tax Cuts and Jobs Act of 2017 is poised to make a difference in Reynoldsburg, with the creation of an "opportunity zone" of more than 14 million square feet.

Development Director Andrew Bowsher called it "a great victory for the city."

It's one of 320 such zones recommended to the federal government by the Ohio Development Services Agency.

Bowsher said he wrote several letters over the past few months and spoke to officials at the agency, urging them to consider the city for at least one opportunity zone that allows businesses to get significant federal tax breaks.

Reynoldsburg's opportunity zone stretches from the corner of Brice Road and Main Street east to Main at Rosehill Road, south to Rosehill at Livingston Avenue and west to Brice and Livingston Avenue. The area includes a shopping center on Livingston Avenue that's the site of a Big Lots (6300 E. Livingston Ave.) and Save-A-Lot (6308 E. Livingston Ave.), as well as a shopping center on Brice Road where Kmart operated until it closed in 2017.

"This large section of land encompasses over 14 million square feet or 330 acres of prime reinvestment opportunity," Bowsher said. "One of the hardest-hit areas within the community could get a much-needed push of investment from investors looking to get federal tax breaks by creating jobs and revitalizing the area."

Bowsher said the program has the potential "to give a powerful boost to economically struggling communities."

"These zones target low-income census tracts across the United States," he said.

Todd Walker, chief communications officer for the Ohio Development Services Agency, said the federal government allowed states to identify areas that would benefit from being named opportunity zones.

"Our role was to recommend up to 25 percent of the low-income, high-poverty census tracts to the U. S Treasury," he said.

The 320 areas the agency recommended comprise 25 percent of 1,280 eligible tracts -- the state's full allocation.

U. S. Treasury Secretary Steven T. Mnuchin said in a press release the opportunity zone program was created to spur investment in low-income communities.

"Attracting needed private investment into these low-income communities will lead to economic revitalization and ensure economic growth is experienced throughout the nation," he said.

Tax benefits

Developers investing in opportunity zones may defer taxes on any prior gains until the date on which an investment is sold or exchanged or Dec. 31, 2026 -- whichever comes first -- as long as the gain is reinvested in a qualified opportunity fund, Bowsher said.

Tax-abated capital gains from the investment will go into the fund instead of going to the federal government, he said.

"Once put into these funds, the gains can be utilized within the opportunity zones to rebuild, revitalize and redevelop the zone," he said. "It's a mechanism to ensure that all funds which these businesses are saving go back into the same area."

If an investor holds the investment in the opportunity fund for at least 10 years, the investor would be eligible for an increase in value equal to the fair market value of the investment on the date it is sold or exchanged, he said.

Capital gains taxes would go back to the individual or company that is creating jobs within the opportunity zone.

The federal program is "a work in progress," however.

"All the rules are still formulating, but as more information gets disseminated from Congress and everything comes together, we will get to see just what sort of numbers our zone will attract," Bowsher said.

He said the U.S. Treasury and IRS plan to issue additional information on qualified opportunity funds, which are required to have at least 90 percent of fund assets invested in opportunity zones.

Mayor Brad McCloud said he is very pleased with Bowsher's work on behalf of the city.

"His efforts are testimony to the dedication and commitment that Andrew has in finding ways to bring in development opportunities," he said.

The city's development potential is already being realized in many areas, he said.

"Growth and development are at an incline, with the building of the future 100,000-square-foot Kroger store and our 55,000-square-foot YMCA Community Center, both of which will reside on East Main Street," McCloud said.

Filling vacancies

Aside from the opportunity zone, plans are in place to fill a number of vacant buildings in Reynoldsburg, Bowsher said.

A Big Sandy Superstore will move into the old Gander Mountain space, 2644 Taylor Road Extension, in the coming months and an Ashley Home Furniture Store will fill space formerly occupied by HH Gregg, 2339 Taylor Park Drive -- two big-box stores that closed last year.

"Small business is also expanding, with the city on a trajectory to surpass the last 10 years for new-business growth," Bowsher said.

He said the owners of Prost restaurant on East Main Street will open a sister location next door to be called Tempe Taco Co.

"This is a street taco/Mexican restaurant with open-air, two-tiered decks facing East Main," he said.

In addition, he said, Chick-Fil-A plans to build a new store off state Route 256 and new tenants are interested in filling the Big Lots/Save-A-Lot areas on Brice Road.

The city parking lot planned at Lancaster Avenue and East Main Street will help accommodate increased traffic coming to Old Reynoldsburg as that area continues to grow, Bowsher said.

Reynoldsburg's development department website now has several local properties listed, so business owners can see which areas are available or ready for expansion.

"While the city dives faster into the comprehensive plan, we are creating ideas for the vibrancy and revitalization of city, as we grow into a more inclusive and prosperous city," Bowsher said. "This is an exciting time for us."

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