Hello again and welcome to The
County Seat I'm your host Chad
Booth. Today we are going to take a
look at programs that help rural
economic counties get into a growth
mode. There are existing programs
and there are new one coming down
the pike and that is what we are
going to talk about. If this seems pie
in the sky there have been programs
to assist counties for a long time state
and private grants and some federal
we are going to take a look and start
by taking an analysis of one company
and the impact it has had in their
local community.
So the FORGE project is a new method of
creating geothermal heat, so this is a research
and development project to see if they can go
and fracture hot granite rock that's below the
surface and then circulate regular water that
they pump down into that rock system and then
bring that up to create the geothermal heat and
the steam.
We were made aware of the Department of
Energy Grant. We submitted the Milford site as
a potential site. It was a several year process
they had many sites around the United States
that were competing for this grant. Last year
they decided on the Milford site it had all the
right characteristics, good public access, utilities
within close proximity, and the rock formation
was what they needed to do the research and
development.
The Governor's Office of Economic
Development, and the Economic Development
Corporation of Utah are great partners for the
rural communities to explore opportunities in
economic development and really know how to
go about doing economic development there
are many resources at a state level that we
don't have at a local level and those two
organizations can help you access those
resources and lead you along the way.
There is no way that we could do a lot of these
projects, if it wasn't for the Department of
Energy grant and the State of Utah Grant, and
many volunteer hours and the state level and
local level. This project wouldn't be possible, it's
a 140 million dollar grant and that's going to be
funneled through m any entities in the state of
Utah and Beaver County and make a huge
difference.
Really excited for the opportunities that the
FORGE project gives us it has been a long
process we started back in 2014 and you have
to stick with it and persevere and work hard to
be able to make these projects possible. We are
excited on what this will do for us both short
term and long term, we think it will really put
Beaver County on the map for renewable
energy as well as help our local businesses and
service providers.
So we have talked about all the
chimpanzees in the room now the
gorilla is going to come in when we
come back we are going to talk about
a new program that is just starting to
gear up here in Utah that could really
be a game changer for rural local
communities we will be right back
with the County Seat.
Welcome back to The County Seat we
are continuing our conversation
about economic opportunity in rural
Utah and a new program and we
would like to introduce you to the
people running the program if I
understand this it is a grant that
comes from the state and lead to2
new people working for the Utah
Assoc. of Counties and in introduce
Patrick Mullin and Stewart Claassen
who are heading this project up have
different titles in there but that will
become obvious in the conversation
so I want to start by getting an
overview by just what is going on
with this new program just put into
effect last year by the federal
government. What is this
opportunity zone program?
So the opportunity zone legislation
you are referencing past in the tax
cuts and jobs that was in late 2017
when it was passed under the Trump
administration written into it was a
little known provision called
opportunity zones and what
opportunity zones are is a direct
result of years of analysis of looking
at the country's economic growth
and realizing that most of America is
still economically distressed. Our
urban centers are growing at
unprecedented rates but you look at
some of the lower income rural or
middle America places they are
seeing not only slower growth but in
some cases decline. Business are
leaving people losing jobs and one of
the main reasons that was behind
this there was a real lack of investor
capitol and investments going into
the communities.
When you put federal government
into a sentences most people
immediate think subsidies grants how
does this work this is really different?
There is no federal money behind
this. There is no grants or subsidies
coming out of it what it is an
incentive to private investors to use
capital gains dollars so those are
dollars that come from a sale of an
asset or building or portfolio of stocks
and reinvesting those dollars
immediately into a newly formed
qualified opportunity zone fund
which for the investors the incentive
is they not only defer the taxes they
would have had on those capital
gains the day they sold them they get
180 days to roll it into this new fund
but as long as that fund is invested in
these newly designated opportunities
zones they don't have to pay taxes as
long as it's in the fund if they stay in
the fund for 5 years they get a 10
point step up in basis as long as it's
not a tax liability that 10 points
moves to 15 but the real carrot what
is designed to make these investors
in for the long run is if they stay for
ten years they not only have to pay
they only have to pay that initial tax
liability less the 15 point step up in
basis but its tax free for any new
growth that you have had.
Basically say you got 10 million you
get 2 million in capital gains you put it
into this fund you leave it there for
ten years you will pay 87% of that 2
million and the rest of the gains if it
turns into a 500 million portfolio you
get tax free.
You do, yes.
Holy smokes.
There are rules and I won't bore the
viewers with the pages of regulations
but it will be administered by the
treasury its designed to spur new
community developments they want
to see new buildings being
constructed they want to see new
jobs being brought in they want to
see businesses creating employment
hubs it is not designed for
corporations to take advantage of
explicitly written in the rules that
cannot be done but it has gotten the
attention of investors across the
country.
How does that relate to rural Utah?
Patrick correct me if I am wrong but
we have 15 zones in rural Utah?
15 counties.
So Patrick is leading out on that what
we saw at UAC was an opportunity
from the work that the Governor's
office and the world trade center did
with existing programs like tax
incremental financing the industrial
assistance fund the programs that we
have in place on a state level that
either empower counties and local
jurisdictions to create incentives
locally or the state programs we want
to stand them up beside opportunity
zone what we are seeing on a
national level is several states across
the country are actually creating new
programs that go lock and step with
the opportunity zones and I do not
know if we are going to get there but
what we want to make sure we are
taking all the existing programs
around economic development that
can benefit rural Utah and we are
aligning them with opportunity
zones.
Basically you are just taking what is
existing making sense out of it so it is
a one stop shop a county or city that
is one of these opportunity zones to
engage.
If I could add the way those zones
were selected it was by Governor
Herbert so the governors of all 50
states were given an chance to
nominate 25% of the low income
census track across the state as
opportunity zones so it cannot be all
of the low income tracks along Utah
but the governor really ran a
balanced approach and split this
pretty evenly across urban and rural
in Utah and its created a significant
opportunity across the state for lack
of a better term but what we want to
see here is particularly an
opportunity zones just started the
conversation across the state and
country there are a lot of investors
that say look I am really interested in
this incentive I would like to figure
out where I can park my capitol and
we want to make sure Utah is on that
map. But more specifically there are
other investors that say opportunity
zones may not make sense for me I
may not have the gains but this has
really spurred this idea that we
should be investing in these
communities in our own back yard
how are we going to be helping these
rural areas and with our large
banking community in Utah and all
the network we have here we are
really excited about bringing that
network together and making it the
best it can be for the state.
Excellent, we will take a quick break
and come back with some of the
details of how all these pieces
interrelate with each other here on
the County Seat. Stay with us.
Welcome back to The County Seat we
are having a conversation about a
new program that is designed to
bring private investments dollars with
great incentive to rural and urban
communities across the state. You
outlaid the structure of this program
but I would like to have a little bit of
discussing that the fact my question
is it Utah investors that are investing
in Utah or is it anybody?
It's all the above?
It's really a combination of both. Its
created a national buzz about it the
investor community whether that is
on the real estate side on the venture
capital small business side everybody
is talking about opportunity zones
and how they get involved in this
great new tax incentive but in the
local conversation I think we had we
have been in several rural counties
we obviously been in the salt lake
community very well I think mostly
local investors stepping up local
people say I have an asset in trying to
off load whether that is a building or
some personal gain I would love to
reinvest in the community could you
come help us how to structure that
where we could be putting the
money it think we will see a good
blend.
Basically you are saying John Price
could play in this on a local level but
Bane Capital could play in this on a
national level and still invest in Utah?
Correct.
How this going to work. Right now I
am thinking of commissioners I know
say in Daggett county good bunch of
guys and they are going that will be
great but how are we going to make
this work, how does it work do they
have to go find the investors
themselves or do they just say we will
put out pieces in place.
I think that is why the Utah Assoc. of
Counties has created the overall
program which is our regional growth
program. Within that we are
leveraging the grant that we received
from the Governor's office to help
the counties that have opportunities
zones in them but also building out
programs for counties throughout
the state one thing that has been on
the books since the 60's is tax
incremental financing and tax
incremental financing is a very
effective tool for economic
development it's been employed very
aggressively along the Wasatch Front
but in some of our rural communities
rural counties there is not necessarily
a understanding from the school
districts perspective or the other
taxing entities but we have found is
that counties have been coming to us
asking us for helping setting these
project areas up and we are doing
that but instead of being a consultant
who has come to town putting a deal
together we are there the Utah
Association of Counties has been
around since the 20's and our job is
to build our programming to support
our partner towns.
What is tax incremental financing?
Effectively what you have is you
designate a geographic space and you
put parcels in that space and you
want to see some kind of
development it could be a hotel a
large employer some entity is going
to come and make a substantial
investment in this area and by
designating it as a tiff area or a CRA is
what is now called under 17C, The
CRA stands for a Community
Reinvestment Area. So what you are
saying is you take a base year of 2019
and there is a value of it so if its
greenbelt its very minimum but then
you get a 20 million dollar investment
to come into that property and what
you are saying that any new
investment or new property tax
above the base value that is captured
over time and then used for
economic development it can be
used to build roads water sewer it
can be used to give an incentive to a
company for job creation and what
we want to see along with
opportunity zones is putting tax
incremental financing together along
with opportunities or maybe just
using tax incremental financing on its
own.
If I understand this correctly the
property value is going to go up with
the investment and the counties and
facilities of local taxing entities will
continue to get what they got before
but the new money goes the new
value the company is going to pay is
going to help build out other projects
and infrastructure.
Exactly. But then at some point in
time the project area phases out and
then all of the taxing entities get to
capture that new growth ten 15 20
years down the road.
How many programs are you guys
bundling together?
It depends on the community. We
have seen in going to these places
some of them have opportunity
zones and they are well positioned to
take advantage of that others either
do not have a zone or ours is kind of
in a residential area we don't see a
lot of development happening within
the zone what else can you do to help
us that is everything from looking at
state incentives with their incentive
program that they have for job
creation tax incremental financing
how they just incent these businesses
to get there we parachute in to help
the communities whatever ways that
are best for them. It's not about
bundling 8 things together and saying
here is your menu take your pick it's
about what are you trying to do and
how can we best plug in to help you.
If I may it's about not taking a top
down approach. Before the show we
were talking about the 25 thousand
jobs I think that was a good effort to
empower local communities to start
taking the lead but the local
communities need to understand the
tools that they have now and the
tools that we need to create and
what an exciting tool that I think
could be a better segue another
conversation is the Utah Inland Port
Authority in my previous position I
was a board member so the Director
or Economic Development for Salt
Lake County is written in statute as a
board member of the Utah Inland
Port I have always said I have said to
legislative leadership the Chairman of
the Board Derek Miller that the Utah
Inland Port is not about a piece of dirt
west of the airport in Salt Lake City
the Utah Inland Port is a state
authority that has the ability to
facilitate public private finance to
build out infrastructures so that we
can get Sevier county Box Elder
county Carbon county any county
that has a commodity or something
that we need to get into the global
supply chain they should be talking
right now with the Utah inland port
board.
The general theory and then we have
to take a break is that the port
authority was going to have 100 mile
radius impact but you are saying it
actually may be further than that.
Why not, that is the really exciting
thing what UAC is a perfect platform
to role this out because UAC has
these really substantial relationships
on the county level.
Great we have to take a quick break
and we will be right back with The
County Seat and we will finish up our
conversation.
Welcome back to The County Seat we
are having a chat with a couple of
new faces at UAC about rural
economic development and a new
federal program I do want to ask this
one question it stems out of a story
that comes out of Utah's smallest
counties the state came in the
governor's office of economic
development and one of their
representatives told the
commissioners there this is great
there is a great big grant and you just
have to write a grant proposal for its
and you can get 80% matching
money and you should take this and
go and the commissioners response
was I will be glad to do that as soon
as I actually have an economic
development director or a grant
writer.
Some of these counties you have part
time locally elected officials who are
basically carrying the water for the
entire county how do they participate
in this?
I think that is exactly what we are
trying to provide to these counties I
will let Stuart speak specifically to
UAC's service offering to rural
counties but to the governors grant
that funded our involvement was
specifically to go and create this
pathway for rural counties in Utah
with opportunity zones to be on a
map to be seen by these nationwide
investors to be promoting their
opportunities partnered with the
Univ. of Utah Gardner policy institute
as well to build investment
perspicuous and marketing material
and the governor's office is going to
have a website up at the end of the
year that will have every single one of
these opportunities zones deals
posted on it. It's going to create
hopefully what can turn into Utah as
a leader in this market place one
example I think to more directly
answer your question I don't know if
you want to speak to the economic
development director piece.
It's almost as if we had rehearsed
before we went on today. we are
sitting here because one there was a
grant opportunity that UAC went
after and they created the
opportunity for Patrick and then two
in my previous life as director of
economic development for Summit
county I was asked to speak at UAC
events and at their November event
Adam and Brandy Grace and myself
were approached by some of our
commissioners in a county and were
offering me a job and I was quite
honored and be a lot of fun to go into
their community but I made it clear I
don't think I would get my wife to
move from downtown Salt Lake but
what I wanted to do is take the work
from Salt Lake County and take it to
the rest of the state and so what they
offered was to pay for specific
economic development services and
we have executed an agreement and
there a handful of counties to come
on and those services are tailored
specifically to those county needs as
every county in the state are
different some counties do have full
time people every county is uniquely
positioned and what we want to do is
not come from the top down and say
we have this great opportunity we
just need to do it these communities
they know what their opportunities
are they just need experts to help
them execute and push the water
down the line.
Bring the investors to them which is
what your job is.
Exactly we are excited about this
instead of dictating from top down I
grew up in a rural community from
my accent in not from here there is
nothing worse than somebody from a
slick suit coming to town telling you
what you need to do you know your
community what we want to do is
you tell us and we help execute.
This is appropriate the first time I
talked face to face about this I
believe you were wearing a flannel
shirt.
Yes I put on a suit and tie for you this
morning I needed to look respectable
and I had a beard too.
Here is my final question we have
obviously gotten some community
leaders attention with this program
today what do they do and how do
they reach out to you gentlemen.
Call UAC, uac.net is our website we
are both listed on the website we are
building out the content this all
happened at the first of the year so
we are moving very quickly but I think
you do business face to face give us a
call we have already visited about 5
rural counties we are fully prepared
and on the road and want to come
out and have meetings and
understand what is going on in every
ones communities.
It's not that bad of a life being rural
road warrior.
Someone not from Utah it blows me
away it's so beautiful.
Thank you gentlemen we have run
out of time thank you for tuning in
each week this is an important
program for rural Utah if you watch
this please share this with all
community leaders and get the
conversation rolling. Remember local
government is where your life
happens, so be part of it be involved
and see you next week.
Không có nhận xét nào:
Đăng nhận xét