Mansfield’s new opportunity zones may lead to more investments in town

By: Antho­ny Zepperi 
April 26, 2019
Newswrit­ing 2 UConn

Of the 27 towns in Con­necti­cut with a fed­er­al­ly des­ig­nat­ed oppor­tu­ni­ty zone, Mans­field is the only rur­al town. Town offi­cials said that the Uni­ver­si­ty of Con­necti­cut itself can attract devel­op­ers who will want to build in the zones for the tax benefits.

Oppor­tu­ni­ty zones are pri­vate­ly owned areas of a par­tic­u­lar town where invest­ments in devel­op­ment can be made. The fed­er­al tax ben­e­fits that these zones offer are sus­pend­ing cap­i­tal gains inclu­sion in income and a per­ma­nent exclu­sion from tax­able income of cap­i­tal gains from the sale of an invest­ment in the zones, Court­ney Hen­dric­son, Vice Pres­i­dent of Munic­i­pal Ser­vices, for the Con­necti­cut Eco­nom­ic Resource Cen­ter, said. 

These zones were cre­at­ed from a 2017 tax law signed by Pres­i­dent Don­ald J. Trump that uses tax advan­tages to lure cap­i­tal to areas lack­ing eco­nom­ic development.

It is expect­ed spur devel­op­ment since the uni­ver­si­ty is an anchor insti­tu­tion, Hen­dric­son said.

Mans­field Town Coun­cil Mem­ber Ronald Schurin, a Demo­c­rat, said that there can be many dif­fer­ent busi­ness­es cre­at­ed in these zones.

“There can be oppor­tu­ni­ty for an increase in hous­ing invest­ments and com­mer­cial devel­op­ment,” Schurin said.

Schurin said that the town was approved for these zones due to income lev­els in Mans­field. The income of UConn stu­dents is includ­ed in the town’s demo­graph­ic profile. 

“These zones were cre­at­ed through fed­er­al law,” Schurin said. “We became eli­gi­ble because of income statistics.”

There are 9,000 oppor­tu­ni­ty zones in the Unit­ed States, includ­ing 72 zones in 27  Con­necti­cut towns, Hen­dric­son said.

“These zones are an incen­tive for investors to defer and elim­i­nate cap­i­tal gains in cer­tain zones,” Hen­dric­son said. “These are zones based on cen­sus tract and those can be invest­ments made in real estate, busi­ness or infrastructure.”

The four oppor­tu­ni­ty zones in Mans­field were first pro­posed in August of last year and approved in Sep­tem­ber of the same year. The zones are locat­ed at the UConn’s Mans­field Depot Cam­pus, the UConn Tech­nol­o­gy Park, Four Cor­ners and the North Eagleville Road and Hill­side Road intersection.

Hen­dric­son said that invest­ments made depend on the type of area these zones are in.

“Funds are based on geog­ra­phy,” Hen­dric­son said. “Some might focus on specif­i­cal­ly Con­necti­cut or Mans­field. Some oth­ers are going to be more the­mat­ic with a cen­tral focus on health care and energy.”

These zones are impor­tant because they bring in jobs and also cre­ate oth­er busi­ness oppor­tu­ni­ties as well for the town, offi­cials said. They help to keep the town sta­ble, finan­cial­ly speak­ing, offi­cials said. 

Hen­dric­son said that the town is work­ing hard to reach out to var­i­ous investors.

“Towns may not even know if funds are being set up and where invest­ments could go due to the fact that they are so pri­vate­ly dri­ven,” Hen­dric­son said. “The town and UConn have come togeth­er with the Con­necti­cut Eco­nom­ic Resource Cen­ter to become proac­tive in terms of out­reach to prop­er­ty own­ers, and poten­tial investors that see invest­ments into their prop­er­ties and businesses.”

Mansfield’s May­or Paul Shapiro said that these areas will allow for more hous­ing to be made with­in the zones so that it may solve the long-term prob­lem of UConn stu­dents liv­ing in res­i­den­tial neighborhoods. 

“The zones will allow more apart­ments to be made due to an increase of devel­op­ers in the area,” Shapiro, a Demo­c­rat, said. 

Mans­field Demo­c­ra­t­ic Town Coun­cil Mem­ber Ter­ry Berth­elot said that Mansfield’s zones would help to add more invest­ments in town.

“There is a chance that there could be an increase in the amount of restau­rants and hous­ing from these oppor­tu­ni­ty zones,” Berth­elot said.

Mans­field Repub­li­can Town Coun­cil Mem­ber David Freud­mann said that he is strong­ly opposed to these zones.

“I am hos­tile towards the idea of cor­po­rate wel­fare,” Freud­mann said. “I also believe that when projects of a com­mer­cial nature have eco­nom­ic jus­ti­fi­ca­tions they could no longer own, and they use their own mon­ey. It doesn’t seem right. I don’t like it when they come to local gov­ern­ment for mon­ey and oth­er considerations.”

Freud­mann said that the town will end up with many extra­ne­ous payments. 

“We’re going to be hold­ing the bag with tax incen­tives and fee waivers,” Freud­mann said. 

Hen­dric­son said that there will be a board that will over­see the zones on a fre­quent basis.

“Our com­mit­tee is made up of key staff from the town and UConn,” Hen­dric­son said.

CERC will help the town in sev­er­al ways. 

“The first part of this scope is Devel­op­er Incen­tive Analy­sis, where the town ana­lyzes what is offered to poten­tial devel­op­ers in the area, accord­ing to Hendricson. 

Hen­dric­son said that there are a vari­ety of ben­e­fits with­in this analysis.

“It could include grants and loans as well as a busi­ness improve­ment dis­trict if the town pur­sued some­thing like that,” Hen­dric­son said. 

Hen­dric­son said that this com­po­nent involves lead­ing dis­cus­sions between the town, investors, devel­op­ers and stakeholders.

“There are going to be meet­ings with prop­er­ty own­ers, UConn staff, local busi­ness­es seek­ing  invest­ment, com­mer­cial real estate, and indus­try pro­fes­sion­als,” Hen­dric­son said. 

CERC will also con­duct mar­ket fea­si­bil­i­ty analy­sis for Mansfield. 

“This is where we iden­ti­fy indus­tries that prove Mans­field a com­pet­i­tive edge and are strong dri­vers of eco­nom­ic growth,” Hen­dric­son said. 

Hen­dric­son said that the town will be hold­ing sev­er­al meet­ings regard­ing these zones.

“We’re going to be doing events through the mid­dle of March through the mid­dle to end of May based on UConn sched­ul­ing with stu­dents to make sure we get the most audi­ence we can,” Hen­dric­son said. 

Town Man­ag­er Der­rik Kennedy said that hous­ing at Four Cor­ners could help alle­vi­ate the par­ty house issue.

“It’s my under­stand­ing since I’ve been here that it has been pret­ty calm and qui­et in the town,” Kennedy said. “This doesn’t mean that there could still be some issues every now and then. The real issue comes in with the amount of sin­gle fam­i­ly own­ers in neigh­bor­hoods who are sell­ing their homes to make them rentals for students.”