Qualified Opportunity Zones

Opportunity Zones, created in 2017 under the Federal Tax Cuts and Jobs Act, are designed to stimulate economic development and job creation by incentivizing long-term investments in low-income neighborhoods. Zones are designated by census tract where private investment—under certain conditions—can be eligible for capital gain tax incentives. All four census tracts that make up the lion’s share of the City of Coatesville are designated Qualified Opportunity Zones.

How it works:

The QOZ tax incentive works by allowing investors to roll over capital gains from other investments into Qualified Opportunity Funds (QOFs), which invest their assets in real estate and/or business equity within Qualified Opportunity Zones. There are three primary tax benefits investors can reap:

1. Deferral of capital gain income: Investors can roll over capital gains from other investments into a QOF and defer tax due on the gain until they exit the fund or December 31, 2026, whichever is first.
2. Reduce tax liability: Capital gains that remain invested in a QOF for 5 years (must invest by December 31, 2021) receive a step up in basis of 10%, and an additional 5% for investments held for 7 years (must invest by December 31, 2019).
3. Tax-free investment returns: Any capital gains that accrue from the QOF investment are tax free if the investment is held in the fund for ten years or more.

Source: Rachael Griffith, Fels Institute of Government, University of Pennsylvania

Contact us directly to discuss how this incentive might benefit your business or development project.

Downtown Façade Improvement Grant

The 2nd Century Alliance, through its downtown revitalization initiative, offers matching grants up to $7,500 to property owners making improvements to their building façades. Three grants are awarded each year to property owners within the central business district in an effort to improve the aesthetic environment.

Downtown Small Business Support Grant Program

The 2nd Century Alliance Small Business Support grant program provides 75% of project costs not to exceed $2,500.00 to help downtown businesses address a tangible need that will help them launch or grow to the next level. Awards will be based on qualifying project scope, Grant Review Committee recommendations and availability of funds.

Contact Amber@2ndCenturyAlliance.org for more information.

LERTA

The Local Economic Revitalization Tax Assistance (LERTA) program allows for the graduated payment of tax assessments relative to any building or property improvements. The LERTA district overlay includes the central business district and provides an incentive for property improvements. More information is in the LERTA Ordinance. Here’s an example of the benefits:

• Current property tax assessment: $100,000
• After repair/improvement tax assessment: $150,000
• Tax payments continue at the base assessment level but the differential ($50,000 assessment value) is graduated over five years.

Neighborhood Assistance Program (NAP)

Tax credit program to encourage businesses to invest in projects which improve distressed areas.

The Neighborhood Assistance Program (NAP) and the Neighborhood Partnership Program (NPP) initiative is designed to stimulate positive change in distressed areas by encouraging businesses to invest in projects that enhance these communities. These projects range from infrastructure improvements to community services, all contributing to the revitalization of neighborhoods in need.

Our Downtown Revitalization Initiatives are funded through the Neighborhood Partnership Program (NPP), which fosters long-term collaborations between businesses, government entities, and community leaders. Together, they develop comprehensive strategies for community development, leveraging assets and relationships to drive sustainable change.

Businesses participating in NPP can receive tax credits of up to 75% or 80%, depending on the length of their commitment to the program. These priorities target specific issues and projects identified by the state as crucial for the revitalization of distressed areas.

We invite you to reach out to us for more information on how you can contribute to the positive transformation of our community through these programs.

• Current property tax assessment: $100,000
• After repair/improvement tax assessment: $150,000
• Tax payments continue at the base assessment level but the differential ($50,000 assessment value) is graduated over five years.