Opportunity Zones were created in 2018 to encourage new investment in poor areas by offering huge tax shelters for rich investors. But Vance County officials are crying foul as a county commissioner successfully nominated a small tract that includes his own commercial properties as the county’s only opportunity zone.
Thomas Sprinkle Hester served as the county commission chair and chair of the county’s economic development board which spearheaded the nomination of the census tract that includes several multi-million dollar commercial properties owned by one of the thirteen corporations and companies he has registered in Vance County.
Meanwhile, proposals and requests for other poor, heavily-blighted residential areas in the county, which were meant to be the recipients of the program, remained unanswered on the city and county managers’ desks.
Rebuild Communities, a non-profit Community Housing Redevelopment Organization located in Vance County, had hoped an opportunity zone designation would spur development in South Henderson, the most poverty-stricken area of the county where their program is focused. Instead, the chosen mapping cut off right across the street from their new program offices.
The North Carolina Department of Commerce website states that their process for identifying these tracts relied on a “close collaboration with local officials from across the state.”
Hester, who is now running for State Senate as a Republican in the predominantly black district made up of six Tier 1 (meaning poorest) counties, was in charge of nominating his county’s zone. By gaining the designation for the tract that includes his own properties and corporate office, he may now avoid capital gains taxes indefinitely on appreciation and investments made within the zone.
The North Carolina State Ethics Commission, who would normally have oversight to investigate unethical conduct and conflicts of interest, does not include local elected officials in their purview. It is one of the few states that leaves it up to the counties to adopt local codes of ethics for local legislators, effectively allowing county commissioners to police themselves in matters of self-dealing.
The New York Times and ProPublica, a nonprofit newsroom that investigates abuses of power, have reported numerous cases in which it appears that rich political contributors and public officials have abused the Opportunity Zones program to reap its lucrative tax breaks. This prompted Senator Cory Booker, one of the original architects of the bi-partisan program, to submit a letter asking the inspector general to do a complete review of areas selected as opportunity zones to see if they were truly eligible.
"The underlying legislation, the Investing in Opportunity Act, was intended to support the growth and revitalization of our nation's most economically underserved communities," the letter said. "It was not the intent of Congress for this tax incentive to be used to enrich political supporters or personal friends of senior administration officials, as recent reports indicate."
NBC News reported in January that the U.S. Treasury’s Acting Inspector General Richard Delmar has opened an inquiry into these claims. Delmar said in an interview prior to the Coronavirus pandemic that he expected his office’s work to be completed by early spring.
NC Board of Elections records show tens of thousands of dollars in donations made to Republican candidates for state offices by Hester in several variations of his name.
photo credit "Tommy Hester Announces State Senate Run" WIZS.com.