HAVRE DE GRACE — The Maryland Opportunity Zone Leadership Task Force discussed the implementation of the federal Opportunity Zone program with local stakeholders from Cecil, Harford, and Carroll counties at a regional summit Wednesday.
The federal Opportunity Zone program, which was created under the 2017 Tax Cuts and Jobs Act, aims to infuse money into 8,700 rural and urban areas across the nation — 149 of which are in Maryland — that are facing economic challenges.
Investors who invest in an Opportunity Zone for a prolonged period of time could see anywhere from 10% to 100% of their gains excluded from taxation depending on the duration of their investment.
In Cecil County, there are currently three census tracts that have been designated as Opportunity Zones: two in Elkton, including the downtown area, and a third larger portion of land along U.S. Route 40 that reaches west to Principio Business Park, north to Interstate 95 and east to Charlestown.
At the third regional summit held by the task force — the first two were held in Salisbury and Baltimore — Lt. Gov. Boyd K. Rutherford, who chairs the task force, said the feedback gained through these forums would be used to design a State Opportunity Plan that will “align the Opportunity Zone goals with state and local economic and cultural priorities.”
“It’s most important that we work with the local jurisdictions, the local stakeholders, to make sure that it fits what you’re trying to do in your communities,” Rutherford said. “We’re not taking a one-size-fits-all approach to this or sending out some kind of orders from mountain high. This is all going to be done and decided at the local levels.”
That idea of working with local governments and communities was front and center as the task force heard from community members about what they would like to see come from the Opportunity Zones.
Harford County resident Barbara Risacher expressed her concerns about warehouses being built in Opportunity Zones.
“We have many vacant warehouses in Harford County … I’m hoping we’re not giving tax incentives for people to build warehouses and let them sit empty for years and years,” she said.
However, Maryland Secretary of Commerce Kelly Schulz, who is a member of the task force, assured Risacher that any businesses that do not produce the jobs they are required to will not receive tax breaks through the Opportunity Zone program.
“Any tax credits and incentives that go forward are based on the number of jobs that are created. The state, with these incentive packages, would not provide funding if there were no jobs that were created in occupancy of those warehouses,” Schulz said, adding that the state follows up on an annual basis to make sure those businesses are continuing to provide jobs to maintain funding.
Maryland Secretary of Housing and Community Development Ken Holt, who also sits on the task force, said the state is working with local municipalities to create community engagement centers that will meet some of the needs of the underserved communities in the Opportunity Zones. He added that such centers are currently being worked on in Cambridge and Baltimore.
“We believe that these community engagement centers, if built right, can provide the kind of health counseling and support, maybe some after-school educational support, some recreational support, to become sort of the core of a neighborhood to galvanize the community around improved opportunities,” Holt said. “Not just opportunities that are coming from private equity and the private marketplace, but opportunities that are going to be spinoff benefits to the community because of jobs that are created by some of these private sector endeavors.”
Delegate Steve Johnson, a Democrat who represents District 34A at the southern end of Harford County, said Opportunity Zones often include food deserts with limited access to grocery stores. Because of that, Johnson said “dollar stores have targeted our disenfranchised and lower-income communities, and they offer little to no nutritious foods.”
“As a state, we struggled with high health care costs and high prescription drug costs, and we’ve been trying to address those issues,” Johnson said. “I have a little bit of concern about struggling and trying to address those issues on the backend, and then incentivizing businesses that promote poor health on the front end.”
Johnson suggested requiring stores to have a certain percentage of their square footage for food include healthy food options and, or, produce.
Chris Moyer, economic development director for Cecil County, said he would like counties to be able to decide what types of businesses would be allowed to benefit from Opportunity Zone tax credits, so that Cecil County could attract more manufacturers and other businesses to Principio Business Park rather than distribution centers.
“If all 14 million square feet of that is distribution at $13-15 an hour in job wages, that’s going to have a potentially negative impact on Cecil County,” he said. “We would love to further incentivize manufacturing at Principio and other types of uses, corporate headquarters, things like that.”
However, Schulz said the decision as to what types of businesses can set up shop in Opportunity Zones is already determined at the local level.
“The state is not choosing the economic development opportunities that are happening in each of the jurisdictions and each of the census tracts that are out there … Whereas the state can help to provide the resources, the community is really the entity that is really supposed to, and should in all likelihood, determine what you want your community to end up looking like at the end of the day,” she said.
Several community members advocated for the promotion of vocational training so that residents will be equipped for employment at the businesses that move into these Opportunity Zones.
Cecil County Executive Alan McCarthy pointed to the work being done at the Cecil County School of Technology, where high school students learn trade skills that they will take with them as they enter the workforce and pursue higher education or other plans after graduation.
McCarthy encouraged communities, particularly those in Opportunity Zones, to work with local businesses and groups to help with vocational training and meet other needs.
“We put together a vocational school and it’s been open for approximately three years,” he said, referring to the new CCST facility on Appleton Road. “Needless to say, we have limited resources in the Cecil County Public School system. But we’ve reached out to Vulcan Materials, Caterpillar tractor dealers, and we basically received funding from them plus equipment from them, new and old, in order to educate students in our heavy industrial mechanics program.”
The next regional summit will be July 10, in western Maryland, however, the exact location has not yet been announced.