An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation authority to the Internal Revenue Service.
Opportunity Zones provide a new tool for investors, fund managers, and communities by utilizing privately sourced funds into eligible economic development and community reinvestment projects.
The Tax Cuts and Jobs Act of 2017 were signed into law on December 22, 2017. This act created qualified opportunity zones, of which 879 are in the state of California. Of those 879, 11 census tracks are in the City of Riverside. • Under the “Opportunity Zones History” tab: Please change the last sentence to read: These census tracts were certified by the U.S. Treasury on April 9, 2018 and this certification is valid until December 31, 2028.
As noted, the program allows investors and/or developers to defer (and possibly forgo) paying capital gains taxes. Lenders are far more likely to provide financing for projects within the Opportunity Zone given their greater potential for profitability with the tax breaks. The program also encourages new construction, providing the biggest tax break to investors who keep their money in the Opportunity Zone for at least 10 years.
Investors and Developers who already have projects planned in the Opportunity Zone also stand to benefit enormously.
The City of Riverside has four, state-designated opportunity zones which are ready for investments and new commercial and residential investments which can be streamlined and has community support.
Zone 1 – Innovation District / Hunter Park
- Main Assets: UC Riverside, Bourns, Solarmax, CARB, Downtown Riverside, Mission Inn, Konica Minolta,
- # of Residents: 44,522
Zone 2 – Casa Blanca Auto Mall
- Main Assets: Riverside Auto Center – Audi, BMW, Mercedes, Lexux, Porsche, Harley Davidson, Carmax
- # of Residents : 2,929
Zone 3 – Arlanza
- Main Assets: Riverside Municipal Airport, UTC Aerospace Systems, Arlanza Public Library, 91 Freeway Frontage,
- # of Residents : 5,669
Zone 4 – Canyon Springs
- Main Assets: Power Retail Center – Target, Walmart, Sams Club, Best Buy, 60/215 Freeway Frontage,
- # of Residents: 3,965
- Strategic Locations: The Opportunity Zone’s boundaries encompass an expanding transit and alternative transportation network, research institutions associated with the University of California – Riverside, and the ever-expanding entertainment destinations in the downtown region. There are currently two Metrolink stations bordering two edges of the zone. This strategic area of the City is currently home to several under-utilized former fruit packing houses and industrial buildings which have the potential to serve as ideal co-working spaces for startup firms and other creative developments. Moreover, firms that focus on researching and bringing to market green transportation solutions could, given close proximity, find ideal partnerships with the nearby UCR Center for Environmental Research & Technology (CE-CERT) and the coming California Air Resources Board campus.
- Record Private/Public Investment: Private and public investment throughout the Opportunity Zone recently cleared $1 billion with the successful completion of the Imperial Hardware Lofts project – the area’s first urban housing project. Other current and future investments within the Opportunity Zone include, but are not limited to: California Air Resources Board new headquarters, the $400 million Riverside Alive project, the 132,000-square-foot Citrus Tower office building, Riverside Community Hospital expansion, Riverside City College Coil School for the Arts, Culinary Academy and District Office, Raincross Promenade Apartments, Centerpointe Apartments, Mission Loft Apartments, Main and Ninth Lofts, 125-room Hyatt Hotel, 140-room Hampton Inn Hotel, 140-room AC by Marriott boutique hotel, Riverside Food Lab, Riverside Game Lab, new Downtown Fire Station #1, and renovations to the Fox Performing Arts Theater, Riverside Municipal Auditorium, and a 29,000-square-foot expansion to the Riverside Convention Center.
- Innovation District: Riverside has created an innovation district, within the identical boundary of the Opportunity Zone, as yet another tool to attract new investment, retain local talent, encourage entrepreneurship, and create jobs. To date, companies such as Konica Minolta, a global technology firm, have relocated to the Innovation District in order to be part of Riverside’s innovation ecosystem and to be close to Riverside’s collegiate talent pool. The Innovation District also boasts several "creative" office locations including ExCITE, Spark Tank, and Mind and Mill. Most recently, two companies operating out of ExCITE, Globe Biomedical and Check Cherry, placed 2nd and 3rd at the Riverside County Innovation Month – Fast Pitch Competition.
- California Air Resources Board: In October of 2017, the California Air Resources Board (ARB) broke ground on its new $419 million state-of-the-art Southern California headquarters in Riverside’s Opportunity Zone. The 380,000-square-foot building and 19-acre campus will be home to one of the largest and most advanced vehicle emissions testing and research facilities in the world. The new headquarters, estimated to be open and operational in 2021, is designed to house research and testing of next-generation vehicles. The new facility continues a more than 50-year legacy of ARB’s groundbreaking work setting pollution standards for cars and trucks (for more information, please visit arb.ca.gov).
- Strategic Partnerships: Riverside is a community that knows how to collaborate and is proud to regularly team up with a vast network of partners who work to enrich the community and make Riverside a vibrant destination to invest and develop:
- Greater Riverside Chambers of Commerce
- Riverside Downtown Partnership
- Inland Empire Small Business Development Center
- UCR College of Engineering-Center for Environmental Research & Technology
- Community Benefits: Opportunity Zones can be used as part of an economic development strategy to create jobs, invest in startups, stimulate housing projects, or augment other tax incentive programs.
Developers and investors can take advantage of the City’s "One Stop Shop", which has brought together, on one floor, all City departments that are part of the development process, with exclusive use of an express elevator and a concierge-type system that helps customers obtain permits and approvals faster than ever.
The One Stop Shop is the latest evolution in the Streamline Riverside effort, which seeks to encourage development and investment in Riverside by reducing barriers, cutting entitlement and building permit review times, and decreasing costs for customers. Specifically, Streamline Riverside advantages include: Reliable, uniform plan check review times: All departments have a uniform review time of four weeks for large projects and two weeks for smaller projects. Preliminary Review: Riverside will review customer’s plans, sketch or idea with a comprehensive Streamline Riverside team and provide verbal feedback. A nominal fee for this review is credited to customer’s formal application fee so it costs no additional money for an early review. Development Review Committee: When complete plans are submitted, customers receive an appointment card complete with date and time to their application reviewed by the Development Review Committee (Fire, Planning, Building, Public Works, Public Utilities and others Departments as needed). After-hours expedited plan check: for a minimal fee, Building, Fire, Planning and Public Works now offer afterhours expedited plan check reviews that cut the turnaround time in half. Efficient internal review authority: eliminating layers of red tape is no easy task in government, but Riverside has undertaken a refresh of review process that empowers staff to make decisions administratively, reducing review times and processes wherever possible. For more information on Streamline Riverside, please visit https://www.riversideca.gov/buildriverside.
Riverside Opportunity Zone Interactive Map
Riverside’s officially designated Opportunity Zones are highlighted below in teal. Additionally, the City’s Innovation District is outlined in gold.