The Opportunity Zones Priority Projects Committee has established a list of qualified commercial activities by geographical area for the development of priority projects, pursuant to Law 60-2019, as the government revealed.
Committee Chair and the government’s CFO, Omar J. Marrero, said this ordinary process is “an important step toward facilitating this investment mechanism and reinforcing the efforts aimed at furthering the island’s economic development.”
A resolution approved by the committee unanimously provides, among other matters, the list of all commercial activities that qualify as priority projects within the Opportunity Zones. These activities are:
- Development (acquisition of property and construction thereon and/or substantial improvement of existing property) of residential real property that is a Low-Income Housing Project as defined in Section 42(g) of the United States Internal Revenue Code of 1986, amended, or by the Puerto Rico Department of Housing, for sale or rent.
- Development (acquisition of property and construction thereon and/or substantial improvement of existing property) of residential and/or commercial real property for sale or rent.
- Development (acquisition of property and construction thereon and/or substantial improvement of existing property) of industrial real property for sale or rent.
- Substantial improvement of an existing commercial property for sale or rent.
Marrero said this list will be in effect for at least a year after publication. However, it could be amended to include a new list of commercial activities or geographical areas, taking into account the needs for a commercial activity in Puerto Rico or of a geographical area, and the economic impact of awarding decrees in the region.
Meanwhile. Economic Development and Commerce Secretary Manuel Laboy said the Opportunity Zones initiative, which now forms part of the Puerto Rico Incentives Code, “is a positive step toward improving Puerto Rico’s economy in a holistic way.”
“It represents an opportunity to promote the development of several economic sectors throughout 98% of the Island, which will allow the most vulnerable zones to have a more just and favorable economic situation,” he said, noting the Opportunity Zones could yield more than $600 million in investments.
“We reiterate our commitment to continue working as part of the team to guarantee the continuity of this powerful economic development initiative,” Laboy said.
The program’s success will “require active participation of Puerto Rico’s 78 mayors,” Marrero said.
“The collaboration of the municipal executives will be key in the successful implementation of the Opportunity Zones because they are the ones who keep the inventory of assets available in their respective municipalities,” Marrero said.
Among other things, mayors will be able to establish, through municipal ordinances, additional tax exemptions at the municipal level for the commercial activities that they wish to promote in their towns as they will be informed of the full process, Rep. Antonio “Tony” Soto said.