The Town of Prescott Valley’s central business district (CBD) has been designated as a Qualified Opportunity Zone (QOZ) by the U.S. Department of Treasury. The Town requested this designation with the goal of accelerating new, ground-up development in sectors where a demonstrated market demand already exists. Development opportunities within six different sectors are outlined below but please note that this is not intended to be an all-inclusive list of the market demands in Prescott Valley.
Retail: A retail gap analysis conducted in 2018 identified several needs within Prescott Valley’s trade area. The greatest needs exist in the areas of apparel, pharmacies, electronics stores, and full service and fast casual restaurants.
Residential: The greatest need for current and future residents is for multi-family housing, specifically market and below-market-rate units. Currently, nearly all multi- and single-family rentals in Prescott Valley are at 100% occupancy with wait lists.
Hospitality: Prescott Valley has 3 limited service hotels which all sit above 80% occupancy through the week and at or about 100% occupancy every weekend. Only one hotel is located in the CBD despite the fact that this area is the Town’s largest daytime employment node.
Medical: Yavapai Regional Medical Center’s East Campus is located in Prescott Valley’s QOZ alongside a range of medical facilities offering a variety of services. The hospital has identified nursing and assisted care facilities and speculative primary care physician offices as the area’s greatest needs but other opportunities also exist.
Entertainment: The Entertainment District is located within the Town’s QOZ. As the only community in Yavapai County with a fairly equal age distribution of its residents, more entertainment options are needed that appeal to a range of generations.
Office: Local brokers have identified Class B and shared office space as the Town’s greatest needs.
Tucked into the Tax Cuts and Jobs Act of 2017, QOZ’s are intended to encourage investment in economically challenged areas across the United States through significant tax advantages to investors of real estate or businesses in QOZ’s who use capital gains to fund their investment. Tax benefits include a deferral of capital gains taxes on gains funding the initial investment, a step up in the basis of the original investment by 10% and an additional 5% at years 5 and 7 respectively, and after holding the initial investment for 10 years, any gains realized as a result of that investment are not assessed any capital gains tax.
On February 27, the Town of Prescott Valley participated in a forum that focused on QOZ’s in Yavapai County. The forum featured a panel of experts discussing opportunity zones and was followed by a presentation from each of the communities that contain a QOZ.