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In 2017, President Donald Trump created a program called Opportunity Zones to spur economic growth in low-income communities—two of these are located in San Benito County. Although the program will continue until 2026 and Congress is considering extending it, it is unlikely that it will boost further investments in the county.
Measure A, which San Benito County voters approved in November, requires that changes to land use designation be put to a popular vote. This affects the biggest Opportunity Zone in the county—a 66.7-square-mile area located in the northern county’s unincorporated area, from Cienega Road to Aromas and from Fremont Peak State Park to Hwy 129.
“Opportunity Zones are attractive from the point of view that they seek to attract developers,” said Dan De Vries, a former San Benito County planning commissioner. “With Measure A, no developer is going to want to come.”
Opportunity Zones were created in the Tax Cuts and Jobs Act of 2017. The bill offers several tax incentives to people or companies investing in housing, infrastructure, commercial and industrial real estate, and existing businesses or startups in these areas. The benefits include temporarily deferring and reducing taxes on capital gains and eliminating taxes on investments held for at least 10 years.
The Treasury Department selected the zones from a list of low-income communities provided by each state. Besides the one in the northern unincorporated area, there is another Opportunity Zone west of Hollister.
But it is mainly in the bigger Opportunity Zone where the federal tax incentive program clashes with Measure A.
The measure’s avowed purpose is to stop commercial growth on the county’s agricultural lands. From now on, changing the designation of agricultural, rural, or rangeland to commercial, will require developers to put their project to a countywide vote.
According to De Vries and Measure A’s opponents, requiring development projects to be voted on by the public will ultimately halt economic growth in the county.
“If an investor wants to come, they are going to have to spend money on a campaign,” De Vries said. “Why would they spend all this money on something whose outcome is uncertain, if they can do it somewhere else without campaigning? No developer is ever going to do that.”
The measure also removes the “commercial regional” designation on four sections along Hwy 101, which the county prioritized for their commercial opportunities. Three of these four “nodes” are within the Cienega Road-Aromas Opportunity Zone: along the intersections of Hwy 101 with Hwy 129 and San Juan Road, and the area around the 101 Livestock Market.
De Vries, who worked for years on the Ag Center development at the Hwy 101 and 129 intersection, says the fact that it was included in the opportunity zones is “a good indication, along with the 2016 San Benito County General Plan, of the appropriateness of the location for revenue-producing commercial.”
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