A New Generation of Opportunity Zones Is Taking Shape
North Carolina is preparing to recommend a new slate of federally designated Opportunity Zones as the 2018 program nears its expiration. Qualified Opportunity Funds held about $3.44 billion worth of property in the state’s zones at the end of 2024, ranking North Carolina ninth nationally in investment, according to a June report from the U.S. Treasury Department. About 86% of the state’s 252 zones received qualified investment, compared with 77% nationally. The updated program, taking effect January 1, 2027, will reduce North Carolina’s total zones from 252 to 202, eliminate contiguous tracts that did not independently qualify as low income, and replace the original capital gains tax deferral with a rolling five-year deferral based on when the investment is made.
State and local officials report difficulty separating projects that used the tax incentive from those that would have proceeded anyway. Nash County’s Susan Phelps said most projects in her area’s Opportunity Zone started before designation, though the incentive attracted inquiries. Person County Manager Katherine Cathey said the 1,350-acre mega park purchased by Microsoft in 2024 for a data center campus sits within an Opportunity Zone, but the designation did not play a role in attracting the project. Granville County’s largest employers, including building materials manufacturer CertainTeed and zipper maker Ideal Fastener, all fall within an existing zone but were located there prior to the program.
Kevin Dougherty, developer of the 3 million-square-foot Eastfield Crossing project in Selma, said the incentive prompted his team to expand from roughly 180 acres to about 435 acres and raise an estimated $14 million to $15 million in Opportunity Zone funds representing roughly 80% of the project’s equity. Target opened its first Johnston County store in the development in May. North Carolina does not have access to data that tracks outcomes across Opportunity Zone projects, according to the state Department of Commerce, making it difficult to determine how investments affected jobs, development and local economies.
The state is evaluating nominations using three principles: business development and job creation, strategic local revitalization, and pathways to increasing housing supply in high-need areas. Seven counties do not have any census tracts eligible for designation in the new round. Jill Homan, deputy director of economy and trade at the America First Policy Institute and member of North Carolina Commerce’s Economic Investment Committee, said investors in rural Opportunity Zones will receive triple the benefits under the redesigned program. Jimmy Randolph of the Sanford Area Growth Alliance said his organization plans to work with financial advisers and university partners to educate investors and better market qualifying properties if Lee County receives a new designation.
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