Jefferson County seeking to draw investment

Published 1:30 am Tuesday, March 10, 2026

PORT TOWNSEND — Jefferson County and EDC Team Jefferson are seeking to identify private investors as they prepare to apply for the federal Opportunity Zones 2.0 program.

David Ballif, EDC Team Jefferson’s executive director, presented on the program Monday at the Board of Jefferson County Commissioners meeting.

“In a nutshell, the idea is to channel resources and investments to distressed or less-resourced communities around the United States,” Ballif said.

The mechanism for channeling those investments and resources is tax savings for investors, he added.

The program provides three tax benefits. First, investors can defer capital gains taxes for five years. Investors selling previous investments can place their funds in a qualified opportunity fund (QOF).

“At that point in time, you do not have to pay those capital gains (taxes),” Ballif said.

That allows investors to use all of their money toward their new investment. Meanwhile, inflation diminishes the impact of the capital gains tax over the five-year window.

Second, at the end of a five-year investment in a regular Opportunity Zone, the original sum owed for capital gains will be reduced by 10 percent. Qualified rural OZ fund investors would get 30 percent discounts.

“Everything in the North Olympic Peninsula in Jefferson County qualifies as rural,” Ballif said.

The third benefit is the elimination of capital gains taxes for investors who hold their investments for 10 years.

“So it’s absolutely a massive benefit,” Ballif said.

In addition to purchasing properties within the designated tracts, investors in non-rural tracts are required to invest 100 percent of the cost of the property into improvement. In rural OZ’s, investors are only required to invest 50 percent of the cost of the property toward improvements.

Ballif called the program a tool for the wealthy to get wealthier.

Qualifying as an OZ was much easier during the program’s first iteration, which started in 2017, Ballif said, noting that the current round will be competitive.

OZ 2.0 will reduce eligibility from 139 Washington tracts to 98, which will account for about 25 percent of the eligible census tracts in the state.

The three specific areas identified by Ballif as likely candidates for nomination in Jefferson County include one in Port Townsend, which would include almost all of downtown, the waterfront, the ferry terminal area, plus Castle Hill, the hospital district and the boatyard.

“I can think, off top of my head, of any number of very interesting opportunities there,” Ballif said.

An important scoring criteria, which Baillif noted could be a strength area for Jefferson County tracts, is investment readiness. The city of Port Townsend’s Evans Vista workforce and affordable housing project is the big one that comes to mind when it comes to investment readiness, he noted.

Planned affordable and market-rate housing also can score points with commerce.

A tract which covers parts of Brinnon and the West End of Jefferson County is eligible and may have a tailor-made project for the OZ criteria, Baliff said. He said the Pleasant Harbor Master Plan Resort could make the application compelling.

Baliff noted the Hoh Tribe indicated its interest in OZs. Coordinating with tribal leadership is expected to help with scoring points during the state’s evaluation process as well, he added.

The third likely eligible tract is in the Quilcene and Coyle Peninsula area. Ballif suggested the county might not place focus on that tract as it is less investment ready and competition is unlikely to lead to all three tracts being designated.

An application portal hosted by the state Department of Commerce will open on April 1 and remain open until May 1. Commerce will score the applications in May and June. Then Gov. Bob Ferguson will submit his final list of recommended OZ’s by July 1.

The new OZ’s will be certified by the U.S. Department of Treasury by Jan. 1, 2027.

Ballif said the EDC will work closely with the county and other community partners to identify projects and potential investors as the application period nears.

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Reporter Elijah Sussman can be reached by email at elijah.sussman@peninsuladailynews.com.