Hawaii Hilo Area Opportunity Zones Fact Sheet
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HAWAII’S OPPORTUNITY ZONES Hilo Area An overview of the potential opportunities for industrial, commercial, and residential investment What is an Opportunity Zone? INTRODUCTION TO HAWAII’S OPPORTUNITY ZONES These overviews are designed to give investors a high-level overview of the potential opportunities in each of these zones in terms of industrial, commercial, and residential investment possibilities. OPPORTUNITY ZONES Hawaii designated 25 census tracts as opportunity zones as part of the new federal community development program established by Congress in the Tax Cuts and Jobs Act of 2017 BENEFITS TO INVESTORS to encourage long-term investments in low-income urban A temporary tax deferral for capital gains reinvested in an and rural communities nationwide. Its stated purpose is to opportunity fund. The deferred gain must be recognized on the encourage entrepreneurship and expansion capital for earlier of the date on which the opportunity zone investment is economically distressed areas of the country. sold or December 31, 2026. A step-up in basis for capital gains reinvested in an opportunity fund. The basis of the original investment is increased by 10% if the investment in the qualified opportunity zone fund is held by the taxpayer for at least 5 years, and by an additional 5% if held for at least 7 years, excluding up to 15% of the original gain from taxation. A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in a qualified ADDITIONAL INCENTIVES opportunity zone fund, if the investment is held for at least 10 Almost all the opportunity zones in Hawaii overlay with other years. (Note: this exclusion applies to the gains accrued from an economic development initiatives such as New Market Tax investment in an opportunity fund, not the original gains). Credits, Enterprise Zones and Transit Orient Development (TOD) Zones. There are also many other non-census tract-based NEXT STEPS programs that can be applied such as Low-Income Housing Tax More information can be found at: Credits (LIHTC). Additionally, there may be synergies between https://invest.hawaii.gov/hawaii-opportunity-zones/ investors and their missions and the major property holders and including detailed GIS maps of Hawaii’s opportunity zones. businesses in an opportunity zone. As a next step, potential investors should consult and work with OPPORTUNITY FUNDS their tax attorneys, real estate agents and business advisors to The opportunity zones program provides a federal tax incentive explore investment possibilities in opportunity zones in Hawaii. for investors to re-invest their realized capital gains into opportunity funds that are dedicated to investing in opportunity zones. Opportunity funds are the private sector investment vehicles that invest in opportunity zones. The fund model will enable a broad array of investors to pool their resources in opportunity zones, increasing the scale of investments going to underserved areas. MARKET HIGHLIGHTS FOR 2018 for Island of Hawaii RETAIL VACANCY RATE 13.38% RETAIL NET ABSORPTION (66,200) SF RETAIL AVG. ASKING BASE RENT $3.06 PSF/Mo OFFICE VACANCY RATE 11.3% OFFICE NET ABSORPTION 53,859 SF OFFICE AVG. ASKING BASE RENT $1.43 PSF/Mo INDUSTRIAL VACANCY RATE 1.24% INDUSTRIAL NET ABSORPTION 16,695 SF INDUSTRIAL AVG. ASKING BASE RENT $1.06 PSF/Mo INVESTMENT SALES VOLUME $369,284,823 INVESTMENT SALES COUNTS 33 Source: Colliers International Hawaii Research & Forecast Report, Hawaii Island Market Year-End 2018 Hilo Opportunity Zones: Investment Drivers ECONOMIC PORTS Banyan Drive Resorts Port of Hilo Kanoelehua Industrial Area Hilo International Airport Foreign Trade Zone Prince Ku-hio- Plaza CULTURAL Hilo Farmers Market Old Town Hilo Wailuku River, Boiling Pots, HEALTHCARE Rainbow Falls Hilo Medical Center Bayfront Park System Ka Waena Lapa‘au Medical Offices EDUCATION & RESEARCH Wailoa River State Park Hilo Community Surgery Center University of Hawai‘i - Hilo ‘Imiloa Astronomy Center Hawai‘i Community College Merrie Monarch Festival GOVERNMENT U.S. Pacific Basin Agricultural Government Center Research Center State Judiciary East Hawaii Opportunity Zones Pu‘u‘eo-Downtown EAST HAWAII OPPORTUNITY ZONES The Pu‘u‘eo-Downtown Opportunity Zone (Census Tract 203) encompasses downtown Hilo and is the historic business center of East Hawaii. This zone boasts many assets of potential interest to investors including: Old Town Hilo, Kalākaua Park, Hilo Farmers Market, Hilo Medical Pu‘u‘eo- Center, Ka Waena Lapa‘au Medical Offices, Hilo Community Surgery Center and the natural attractions of the Wailuku River, Boiling Pots and Rainbow Falls. The top occupations in this opportunity zone are Management/Business/Science (37%), Service (25%) and Sales & Office Downtown (22%). Opportunity Zones The Pu‘u‘eo-Downtown OpportunityCensus Zone Tract 203 Census Tract: 203 (Pu‘u‘eo-Downtown) Resident Population: 3,908 Median Household Income: $37,813 (Census Tract 203) encompasses downtownHawaii County Zoning Median Family Income: $70,428 Population with a High School Degree or Higher: 90.2% Hilo and is the historic business center of Median Value for Owner-Occupied Housing Unit: $265,800 District H A W East Hawaii. This zone boasts many assets(river) A I I B E L of potential interest to investors including:(road) T R Census Tract: D Old Town Hilo, Kalakaua Park, Hilo LEHUA ST ARRUDA Agricultural P 203 (Pu‘u‘eo-Downtown) U LN U E Farmers Market, Hilo Medical Center, Commercial O S KEKAULIKET Ka Waena Lapa‘au Medical Offices, Hilo • Resident Population: 3,908 ST K Open A KEAWE ST M E • Median Household Income: $37,813 ULULANI ST H Community Surgery Center and the Residential KINOOLE ST A M WAIKAPU E H • Median Family Income: $70,428 PUNAHOAA natural attractions of the Wailuku River, Resort-Hotel LN AV T E S ST I Boiling Pots and Rainbow Falls. The top • Population with a High School Degree N ELEPAIO ST *Source: Hawaii Statewide GIS program, DBEDT Research and Economic Analysis Division. A *Source: Hawaii Statewide GIS program, DBEDT Research and Economic Analysis Division. and Economic Analysis DBEDT Research GIS program, Statewide Hawaii *Source: L IU or Higher: 90.2% HAILI ST A LOULU occupations in this opportunity zone are K LAIMANA ST HALE ST MOHALAPL Management/Business/Science (37%), • Median Value for Owner-Occupied LN WAIANUENUE AVE Housing Unit: $265,800 LN Service (25%) and Sales & Office (22%). WAIAU ST HOMELANI KAHEMA ST AMAKIHI ST AST D LELE ST N PIIKEA RAINBOW R HI 2SSRUWXQLW\=RQHV PUNAHELEPUUHONU ST ST &HQVXV7UDFW WAY *Source: Hawaii Statewide GIS program, DBEDT Research and Economic Analysis Division. and Economic Analysis DBEDT Research GIS program, Statewide Hawaii *Source: +DZDLL&RXQW\=RQLQJ DR KU ILU WA 'LVWULFW H *Source: Hawaii Statewide GIS program, DBEDT Research and Economic Analysis Division. and Economic Analysis DBEDT Research GIS program, Statewide Hawaii *Source: A W P A ULYHU E I EP I EE T B S E L MAKANA T URDG PL R Opportunity Zones D *Source: Hawaii Statewide GIS program, DBEDT Research and Economic Analysis Division. and Economic Analysis DBEDT Research GIS program, Statewide Hawaii *Source: LEHUA ST ARRUDA $JULFXOWXUDO P U 2SSRUWXQLW\=RQHV LN Census Tract 203 U E 2SSRUWXQLW\=RQHV&RPPHUFLDO O &HQVXV7UDFW S KEKAULIKET &HQVXV7UDFW2SHQ ST K A Hawaii County Zoning KEAWE ST M +DZDLL&RXQW\=RQLQJ 2SSRUWXQLW\=RQHVE ULULANI ST H KINOOLE ST A 5HVLGHQWLDO Pu‘u‘eo-Downtown 203: Tract Census +DZDLL&RXQW\=RQLQJ &HQVXV7UDFWM District WAIKAPU E H 'LVWULFW +DZDLL&RXQW\=RQLQJPUNAHOAA H LN A 'LVWULFW5HVRUW+RWHO H A V W T A E S 'LVWULFWW ST Map I A ULYHU N ELEPAIO ST A I ULYHU A I I This map was produced by the Office of Area L URDG I B B IU E Planning (OP) for planning purposes. A HAILIE ST K L LOULU L It should not be used for boundary inter- URDG URDG LAIMANA ST $JULFXOWXUDOT T pretations or other spatial analysis beyond HALE ST R R MOHALAPLD D the limitations of the data. Information &RPPHUFLDOLN regarding compilation dates and accuracy of LEHUA ST ARRUDA ARRUDA the data presented can be obtained from OP. $JULFXOWXUDO [ P LEHUA ST WAIANUENUE AVE $JULFXOWXUDO P ,QGXVWULDOU LN Map No.: 20181127-01-DK LN WAIAU ST U U HOMELANI LN Map Date: 11/27/18 010.5 E U Hawaii O Sources: &RPPHUFLDO KAHEMA ST AMAKIHI ST 2SHQ E AST O County Zoning, TMK, Roads: Hawaii County, 2018. &RPPHUFLDO LELE ST N S PIIKEA BOW DR I RAIN H T County PUUHONUMiles KEKAULIKE Census Tract: U.S. Census Bureau, 2010. 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