The fortunes of five Burlington County towns where efforts are underway to redevelop vacant or underused properties or business districts just improved.
The U.S. Department of Treasury approved designating portions of Burlington City, Palmyra, Pemberton Township, Riverside and Willingboro as “economic opportunity zones” under the new federal tax law.
The new designation is intended to help spur development in low-income areas. Only towns or census tracts with poverty rates over 20 percent or where the median family income is less than 80 percent of the area’s median family income were eligible.
Statewide, a total of 169 zones in about 75 cities and municipalities were submitted to Treasury by Gov. Phil Murphy’s administration for consideration. All 169 zones were approved, according to the Governor’s Office.
“Now, these cities and towns will have additional means to generate economic growth throughout their respective communities and, more importantly, create economic opportunities for their residents,” Murphy said Monday after the approvals were announced.
Under the law, investors will be able to defer taxes for investing unrealized capital gains into so-called “opportunity funds” that can be tapped for development or business expansion in the designated zones. Those who invest in the funds will also be eligible for substantial tax breaks on those investments.
Pemberton Township Mayor David Patriarca has said he believes the tax benefits could help spur a developer to take the leap and invest in redeveloping the township’s Browns Mills Shopping Center or other portions of its Town Center commercial district.
“It certainly sweetens the pot. It probably will incentivize some developers to take a second look,” the mayor said last month.
A new developer has also been designated to research further redevelopment of the former U.S. Pipe and Foundry site along Pearl Street and the Delaware River. Amazon.com is expected to lease a large warehouse planned for a portion of the site.
Palmyra, Riverside and Willingboro also have targeted portions of their towns for redevelopment.
The zones are a little-known component of the federal tax overhaul approved by the Republican-controlled Congress and signed by President Donald Trump last year.
The sprawling tax rewrite is best known for its deep cut in the federal corporate tax rate and its reductions in individual tax rates. The law also made several other changes, including a boost in the standard deduction and the child tax credit, but eliminated or capped several other deductions, notably the deduction for state and local taxes used by many New Jerseyans to write off their property taxes and state income tax.
Congressman Tom MacArthur, R-3rd of Toms River, was the only member of New Jersey’s congressional delegation to vote in favor of the law. He said the redevelopment incentive was another example of how the law benefits South Jersey.
“The Opportunity Zones designations will help bring new investments into these South Jersey communities that have been disadvantaged. By encouraging long-term investment in these areas, we will revitalize neighborhoods right here in South Jersey,” MacArthur said. “I supported the Tax Cuts and Jobs Act because of the benefits it would provide our state, and the Opportunity Zone designations, along with families being able to keep more of their hard earned money, is another example of how the tax cut legislation is benefiting South Jersey.”
Rep. Donald Norcross, D-1st of Camden, noted the opportunity zones were originally proposed in separate bipartisan legislation sponsored by U.S. Senators Corey Booker and Tim Scott that was added to the tax overhaul legislation.
“We’re bringing much-needed investment to our communities and I look forward to welcoming new businesses to South Jersey,” Norcross said. “I am excited to see how these ‘opportunity zones’ will grow into places that will attract and sustain the best New Jersey has to offer.”