Opportunity Zone

The City of Santa Ana’s Opportunity Zone encompasses 11 census tracts, approximately 22% of the City. With over 3,800 acres of qualified land designated as an Opportunity Zone in the city, Santa Ana is looking for future investment that will provide a substantial economic return for its business and resident community.

Areas of interest in the Opportunity Zone include Downtown Santa Ana, the Civic Center, the Santa Ana Regional Transportation Center, the 100 acre Willowick site, and the OC Streetcar route.

What is an Opportunity Zone?

An Opportunity Zone is an area designated under the Tax Cuts and Jobs Act of 2017, where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service.

Opportunity Zones are an economic development tool—that is, they are designed to spur economic development and job creation in distressed communities.

Opportunity Zones are designed to spur economic development by providing tax benefits to investors. First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026.   If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain.  If held for more than 7 years, the 10% becomes 15%.  Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.