The Spokane area is the place—and now is the time—for investors to take advantage of Opportunity Zone incentives and accelerate economic development in low-income areas with potential for strong growth.

While the federal legislation that created the Opportunity Zone designation is so new that the Internal Revenue Service is still taking comments on regulations and guidelines for it, there’s cause for some sense of urgency for certain investors to get in on it before year-end to be eligible for full incentives.

The 11 Opportunity Zones designated for Spokane County include Airway Heights and census tracts within Spokane’s downtown core and the University District as well, as the West Central, East Sprague Avenue, lower South Hill, and Hillyard neighborhoods.

What should make the Spokane-area highly attractive for such investment is that infrastructure work is underway or planned in many of the Opportunity Zones. In other words, while they are in low-income areas, Opportunity Zones are primed for economic growth.

The Opportunity Zones here were designated by Gov. Jay Inslee as such in a competitive process because there’s already some interest in development in them, and Greater Spokane Incorporated has estimated that more than 30 projects valued at more than $375 million are in some stage of planning within the Opportunity Zones.

Opportunity Zones, established as part of the federal 2017 Tax Cuts and Jobs Act, are intended to bring private capital into low-income areas by encouraging investors to defer capital gains tax obligations and potentially eliminate a portion of them by putting those gains from other investments to work in low-income neighborhoods.

The sooner they do so, the better—for the investors and the communities they invest in. The way the legislation is written, taxes on capital gains that are reinvested in qualified Opportunity Zone funds are deferred until 2026. However, 10% of the original invested gains can be excluded from taxation if the investment is held for five years. That’s bumped up to 15% if such investments are held for seven years by that 2026 date, meaning investors should be looking at Opportunity Zones this year to receive the maximum benefits of such investments.

Aside from the permanent exclusion aspect regarding the original Opportunity Fund investments, investors still have until 2026 to invest in such funds to receive some substantial benefit. For example, gains accrued by the Opportunity Zone investment itself can be excluded from taxable income if the investment is held for at least 10 years.

It’s not just massive projects, such as the recently announced plans for the Mullen Technologies Inc. electric car manufacturing plant and lithium ion battery research facility on the West Plains, that are eligible for Opportunity Zone incentives. Potential development within some of the zones include residential, commercial, retail, and mixed uses.

Spokane is positioned well for Opportunity Zones to spark a boost in economic activity in some of the neighborhoods that need it the most.

In coming months, economic development and job recruiters should be highlighting Opportunity Zone incentives to attract private sector dollars to projects here that might otherwise be overlooked by outside investors.