MERIDEN — City officials are exploring a federal program that encourages private investment through tax incentives in low-income neighborhoods, deemed “opportunity zones.”
Ten Meriden neighborhoods would be eligible, according to census data. Officials believe the program could also provide indirect economic benefits through property taxes and job creation.
“I don’t see any downside if we would qualify,” said City Council Majority Leader David Lowell.
New federal tax law allows states to designate “qualified opportunity zones” in low-income neighborhoods and provide tax incentives for private investment. Census tracts, or geographical areas consisting of between 1,200 and 8,000 people, where more than 51 percent of households earn less than 80 percent of the area median income are considered low income, according to the U.S. Department of Housing and Urban Development.
Ten sections of Meriden meet the criteria, Lowell said.
A resolution to determine which low-income neighborhoods could qualify was referred to the city’s Economic Development, Housing and Zoning Committee by the City Council last week.
Benefits include the deferral of capital gains that are reinvested in the zones. Finance Director Michael Lupkas said the program could attract businesses to low-income neighborhoods.
The legislation will allow up to 25 low income census tracts statewide to be designated as opportunity zones, putting Meriden in competition with cities such as Hartford, Bridgeport, New Haven and Waterbury.
State officials are also exploring how the program could benefit local communities, according to Daniel Arsenault, Department of Housing public information officer.
“Our staff is aware of the legislation,” Arsenault said. “We’re having internal discussions and evaluating how Connecticut may be able to take advantage of this new law.”
The federal legislation states that opportunity zones must be designated by March 22 in order to qualify for the benefit, Arsenault said.