Stockton did not fall behind by accident. Years of redlining, tax structures that undercut development and missed opportunities led to California’s fragmented economy. It doesn’t have to be this way. One way we can spur a resurgence of economic prosperity is to use a new tax incentive called opportunity zones.
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By Michael Tubbs
Stockton Mayor Michael Tubbs is a Stanford graduate who returned home. Mayor@stocktonca.gov He wrote this commentary for CALmatters
While we aspire to build a #CaliforniaForAll, our state faces serious divides between regions of enormous wealth and regions of deep poverty.
Communities like my hometown of Stockton did not fall behind by accident. Years of redlining, tax structures that undercut development and missed opportunities led to the fragmented economy that exists in California.
It doesn’t have to be this way.
One way we can spur a resurgence of economic prosperity is to use a new concept known as opportunity zones, one of the positive aspects of the 2017 federal tax overhaul.
The intent is to encourage investment by providing businesses with tax incentives to invest in economically distressed regions. Gov. Gavin Newsom and the Legislature are shaping the California version of these zones now.
We believe that the state can support communities across the state by pursuing the following strategies for opportunity zones:
- Ensure clear reporting and transparency requirements for opportunity zones funds and projects, so we can track and understand the impact of this new economic development tool.
- Enable community sponsorship for a California Opportunity Zone incentive. Each of the California communities that include California’s 879 opportunity zones is unique with a different history and specific needs. Building on the governor’s request for a California incentive that prioritizes affordable housing and clean energy, the Legislature should empower communities to request similar incentives for economic development projects with broad community support – including investments in broadband, job-creating startups, and local small businesses.
- State support for local regional economic development capacity. Help local communities lead in generating positive impact investments by ensuring they have the financial, development, and technical support to build and implement an opportunity zone strategy, including pre-development grants and loans, technical assistance, and access to expertise.
Traditionally, the Silicon Valley and coastal California have been seen as the most desirable for investment, overshadowing the immense potential and promise held in heartland communities, including Stockton.
But Stockton is home to 320,000 residents and is centrally located approximately 75 miles away from San Jose Valley and about 40 miles from Sacramento. The city long since emerged from 2012’s bankruptcy as an All-American City and is the one of the most fiscally healthy in the state.
With its inland port, fertile land, affordable real estate, diversity, and myriad of opportunities to make an impact, Stockton is poised to show how opportunity zones can be done right.
But like other parts of the Central Valley, we need access to capital and sustained investment. With the promise of opportunity zones, we have a unique opportunity to rectify investment decisions of the past by equitably investing in our future.
For example, what if we used these tax incentive tools to lay the badly-needed digital infrastructure and fiber services required for citizens to compete in the 21st century economy?
That would help kids do their homework in the evenings, and colleges offer high quality curriculum that relies on interactive technology.
It would assist companies that want to be able to access industrial-strength data capabilities to build a future in Stockton.
To compete in a new economy, we in the heartland of California need to make sure we can attract and retain high-quality teachers. Opportunity zone investments could be directed into new models of redevelopment that include affordable teacher housing.
We are a city on the rise. Just look at our downtown and waterfront, two of the best hidden jewels in California. We already are home to major sports and entertainment facilities. With the right opportunity zone investments, our waterfront could become a true destination.
After decades of decline, we are seeing a resurgence in our downtown. Left empty for decades, one of our tallest buildings is now being restored as artist lofts. It’s a reflection of renewed energy in our downtown.
Stockton has always been a place full of potential, but we’ve lacked the financial capacity to drive innovation for businesses and green economy opportunities that could spur new job growth.
Without it, many of our most talented individuals leave for work and educational opportunities. Each day over 70,000 people from our Stockton region make their way west to work in the Silicon Valley.
We rank number one in the nation for super commuters, people traveling 90 minutes or more, one way, for work.
With the right opportunity zone investments, local talent could help grow our economy as entrepreneurs starting new businesses, or working for businesses that would locate in our downtown.
Opportunity zones would be a way to not just invest in land and buildings, but to also invest in our people. Let’s build a California that is truly golden for all, by ensuring that cities like Stockton share in the economic growth along with the rest of the state.