Opportunity Zones
Investment Advantages
The Opportunity Zones program is a federal program designed to spur community investment by providing tax benefits to investors. The City of Mesa has 11 census tracts that have been designated Opportunity Zones by the U.S. Department of the Treasury. The map below highlights these tracts within the city boundaries.
The Arizona Governor’s Office and the Arizona Commerce Authority worked with local governments, tribal communities, and counties to decide which census tracts would be submitted for consideration by the federal government. As of April 9, 2018, all of Arizona’s 168 submitted tracts became officially designated as Opportunity Zones.
Mesa’s designated Opportunity Zones are anchored by our four central business districts: Downtown Mesa, the Fiesta District, the Falcon District, and the Gateway Area.
Mesa’s Opportunity Zone Funded Projects
| Opportunity Zone Area | Property Name | Project Description | # of Sites |
|---|---|---|---|
| Falcon District | Longbow Hotel and Mixed-Use Development | This 111-key hotel boasts multiple terraces and patios, an outdoor pool with golf course views, and direct access via golf cart to the adjacent course. | 1 |
| Falcon District | Mesa Hangars at Falcon Field | This 23-acre, six-building, $65 million development includes more than 375,000 square feet of hangars in addition to ancillary office space, aircraft staging ramp, and vehicle parking areas. This project is well-positioned for aviation and aerospace businesses. | 1 |
| Gateway Area | Abington Emerson | This industrial project includes two buildings totally nearly 67,000 square feet and is located adjacent to the Mesa Gateway Airport. | 1 |
| Downtown Mesa | 29 W. Main | The project consists of a 15-story building with a 75-room boutique hotel and 75 luxury apartments above a city-owned surface parking lot, and redevelopment of an existing Main Street building with 7,000 square feet of restaurant and/or retail space. | 1 |
| Downtown Mesa | Apartments on Pepper Place Parking Lot | This development has 70 market-rate and luxury apartments and 5,000 square feet of commercial space at street level. The apartments are oriented toward sustainable living with most of the power being generated on-site by renewable energy sources. | 1 |
| Downtown Mesa | Caliber Downtown Mesa Portfolio | The Downtown Mesa portfolio of properties consists of ten historic buildings located on Main Street, totaling 100,000 square feet and occupying 25% of the frontage on the popular Main Street. | 10 |
| Downtown Mesa | Country Club and Main Project | This is a high intensity, modern, urban development that contributes to an active and livable downtown and complements the community's vision. The mixed-use project includes 200 market-rate rental units and 20,000 square feet of commercial space. | 1 |
| Downtown Mesa | ECO Mesa, Purple Lot | This mixed-use development is located near the southeast corner of West Pepper Place and North Robson. It includes 102 market-rate apartments and 4,000 square feet of commercial space at street level. | 1 |
| Downtown Mesa | The Grid | This $75 million mixed-use development brings together lifestyle amenities, three housing options, a healthy, full-service restaurant, and creative Class A office space. The mid-rise structure is on 3.3 acres of fronting Main Street, reimagining it as an inclusive urban mixed-use community. Featuring micro-units to market-rate apartments to contemporary rowhomes, it will be a unique offering in the heart of downtown. | 1 |
Note: Due to recent congressional action, Opportunity Zone policy is no longer sunset-dated. It will become a standing component of the Internal Revenue Code.
Requirements for Tax Incentives
To have a qualified investment in an Opportunity Zone eligible for the tax incentives, two qualifications must be met:
- The investment must be made via a qualified Opportunity Fund. An Opportunity Fund is a privately managed investment vehicle organized as a corporation or a partnership for the purpose of investing in qualified Opportunity Zone businesses. The fund must hold at least 90% of its assets in such property.
- The investment must be derived from a gain in another investment and transferred into an Opportunity Fund within 180 days of realizing the gain.
Requirements Related to Capital Gains
If these qualifications are met, investors can receive reductions on capital gains taxes relative to the years of their investment in an Opportunity Fund after five years.
- If the investment is held for a minimum of five years, the taxable amount of the capital gains reinvested is reduced by 10%.
- If the investment is held for seven years, the taxable amount of capital gains reinvested is reduced by an additional 5%, bringing the total reduction to 15%.
- After holding for ten years, there is a permanent exclusion from taxable income on the capital gains from the investment in the Opportunity Fund.
Definition of a Qualified Opportunity Zone Business
A business in which substantially all of the tangible property owned or leased by the business is used in an Opportunity Zone, with at least 50% of the gross income earned by the business coming from the active conduct of business within an Opportunity Zone.
Example Businesses That Do Qualify
- Mixed-use developments
- Market-rate rental housing
- Strip centers
- Parking facilities
- Retail/grocery stores
- Hotels
- Restaurants
- Sports facilities
- Health clinics
- Offices
- Manufacturing
Example Businesses That Do Not Qualify
- Private or commercial golf course
- Country club
- Massage parlor
- Suntan or hot tub facility
- Racetrack or other establishment used for gambling
- Any store whose principal purpose is the sale of alcoholic beverages for consumption off the premises
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