The Spokane area is aligned for a boost in economic activity in some of the neighborhoods that need it the most, thanks to federal opportunity zone legislation included in last year’s tax overhaul.

In a competitive process, Gov. Jay Inslee has selected 11 opportunity zones in Spokane County out of 139 such zones throughout the state, which gives Spokane County nearly four times the opportunity zones of the average county. That’s not because Spokane County is more impoverished than most Washington counties. Most of the zones here were selected because there’s already some interest in development here.

Now economic and job recruiters will be able to promote Spokane as well positioned for opportunity investment.

Opportunity zone legislation provides a tax incentive that enables private investors to redirect their profits to accelerate growth and development of businesses in such economically challenged areas.

While opportunity zones by definition must include census tracts with an individual poverty rate of at least 20 percent and median family income at less than 80 percent of the surrounding area median income, they also have to be able to demonstrate that the designation would likely result in new investment and job creation.

The designated opportunity zones here include census tracts in Spokane’s Central Business District, the West Central neighborhoods, portions of the University and East Sprague districts, the lower South Hill, and Airway Heights.

Federal regulators are expected to issue rules this summer about raising and deploying capital to benefit opportunity-zone communities through investment vehicles to be called opportunity funds.

Rather than providing upfront tax credits for investors, opportunity funds will enable people to reinvest capital gains from other investments into opportunity zones, deferring taxes on those gains until 2026. Further capital gains on such investments, however, will be tax free if they remain in opportunity zone communities for 10 years.

Planned and ongoing infrastructure work and current private projects in those areas will give Spokane an advantage in attracting private-sector investments in their respective opportunity zones.

Greater Spokane Incorporated has estimated that 30 to 40 shovel-ready projects valued at $376 million are in some stage of planning within the opportunity zones.

That’s important, because many of those projects could provide investors the confidence to get involved in opportunity funds here sooner rather than later.

Opportunity zones are needed to attract private sector-dollars into areas such as Spokane that have the potential for sustained economic growth, but often are overlooked by outside investors.

As reported last month in U.S. News & World Report, more than 80 percent of venture capital invested in U.S. small businesses and startups went to prosperous areas in four states--California, Massachusetts, New York, and Texas--in the first quarter of 2018.

Opportunity zones, however, will provide incentives for private investment dollars to flow into our neighborhoods and encourage local business growth.