Boulder’s options to address the remaining city council fears surrounding the federal opportunity zone program may be slim or impractical.

Colorado real estate experts are skeptical Boulder can target development backed by entities seeking to evade capital gains taxes through opportunity zone investment without also forcing projects using standard financing instruments into stricter, more costly permitting requirements.

Council last month requested city staff research whether it would be legal or possible for Boulder to set higher obligations for developers exercising the new opportunity zone tax benefit, a 2017 President Donald Trump-led program allowing taxes on capital gains to be deferred for the next seven years.

The program offers a 15% tax break on gains invested by the end of the year and left in place through 2026 in one of the more than 8,000 census tracts across the country designated as opportunity zones. A 10% break is available on gains invested by the end of 2021, with a complete tax deduction on the appreciation of such a real estate venture after 10 years.

But council worried the tax incentive would attract unwanted development — namely luxury apartments and high-end office space — to the city’s opportunity zone, a stretch generally between 55th and 28th streets and Diagonal Highway and Arapahoe Avenue. It responded to news of Macy’s exploring redevelopment of its 29th Street store as a massive office building by in December imposing a temporary timeout on demolition and development in the area.

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