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Angela Major 

Craig’s Marshaun Harriel (10), center, shoots over Verona defenders Saturday, Feb. 1, 2020, at Craig High School in Janesville.

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Investment trickling into local opportunity zones


About one-third of Janesville—the entire industrial belt on the city’s south side and the entire downtown—is blanketed by a little-talked-about federal designation.

The land is “in the zone.”

Janesville has more acreage than any other southern Wisconsin community designated as federal opportunity zones, but only recently has investment started to trickle in.

Tax consulting firm Baker Tilly has helped steer more than a dozen investors to reinvest capital gains in Wisconsin opportunity zones. One of the investors has put money in an opportunity zone in Janesville, but Chase Inda, an opportunity zone expert and tax partner with Baker Tilly, declined to discuss the specifics of the investment.

He described opportunity zones as a program “local governments should trumpet.”

In Janesville, three census tracts have the designation intended to spur economic growth by allowing private investors and developers special tax breaks to invest, develop or build in the zones.

With as much land as Janesville has in opportunity zones, it might be good news the federal government after two years finally has forged a full framework of rules governing how the zones lessen or eliminate capital gains taxes for investors.

Officials said opportunity zones haven’t spurred much private investment, in part because it has taken years for the IRS to write rules for the program. Yet, some local economic development experts and accountants think opportunity zones could be poised to make a difference locally.

Brought into existence out of a federal tax relief law passed in late 2017, opportunity zones are the newest federal tax incentive tool, joining municipal tax incentive programs such as enterprise zones and tax-increment financing.

In Janesville, opportunity zones encompass the entire, 250-acre former General Motors plant site. The city’s entire south-side industrial and commercial park is also in an opportunity zone, as is the city’s central downtown.

All three zones have had some degree of economic distress in the years coming out of the Great Recession, but all three areas are now seeing tens of millions of dollars of private and public investment for redevelopment, including emerging plans for large-scale apartment developments.

City Economic Development Director Gale Price said lack of final federal rules cast uncertainty over opportunity zones, but the city has seen interest from business people considering putting money into an opportunity fund.

The city hasn’t had any opportunity zone deals signed since federal rules were released in December, but some investors or developers who’ve inquired were planning big-ticket projects—perhaps $20 million to $60 million, Price said.

How does it work?

In the past, investors who sold real estate and looked to shelter their profits from capital gains taxes rolled their profits into other real estate, a so-called “tax trade” that investors have used for years.

Inda said the opportunity zone program is the first federal program that allows investors to plow profits from the sale of stocks into a new investment while sheltering the profits—and any future gain from the new investment—from capital gains taxes.

Wisconsin capital gains taxes—taxes on profits from the sale of stocks or real estate—cost investors about 5.5 cents for every dollar. Federal taxes on capital gains siphon an additional amount.

The opportunity zone program requires investors to use capital gains to set up an opportunity fund.

Money from the opportunity fund then would be used for projects within the opportunity zone.

Opportunity zones eliminate 20 percent of state and 10 percent of federal capital gains taxes on money investors place in the zones. After 10 years, those investors would pay no capital gains tax on money cashed out of an opportunity zone.

“That’s the real needle mover. It’s that 10 years from now you can sell that asset and not pay taxes on it,” Inda said.

Price said investors who might be interested in an opportune zone must have capital gains to invest.

“You actually have to create a capital gain to take that money and reinvest it,” Price said. “If you’re not ready to cash out some stocks or a real estate property, then you’re not going to get in on an opportunity zone.”

Price and Inda said the most common projects seeing investment in opportunity zones include multifamily housing and apartments and industrial and commercial real estate development or expansions.

Price said some opportunity funds he’s heard discussed are real estate development plans he called “very big-ticket projects.”

Jennifer Sereno is chief of public affairs for the Wisconsin Housing and Economic Development Authority, the agency that administrates opportunity zones at the state level. She said 68% of opportunity zone investment nationally has been rooted in new housing development.

Lower taxpayer risk

Unlike many tax incentive programs, taxpayers wouldn’t incur financial risk in opportunity zones. That’s because the capital put into those zones would be almost all private funds.

Governments would have to spend only on marketing local opportunity zones and working with investors interested in the programs.

Price, Inda and Rock County Economic Development Manager James Otterstein said opportunity zones can be used in combination with any number of state or local tax incentives as part of a larger financing package that investors call a “braid” or “capital stack.”

Inda said it’s another tax incentive tool that can be used to bridge funding gaps in projects that are caused by rising costs of construction and land acquisition.

Bill Mears, a Janesville real estate broker and economic development expert, said he’s not heard much recent talk about investing in local opportunity zones.

“That program was much-touted a few years back when it was created by law. You had plenty of politicians talking a lot about it, but it hasn’t really resonated with the investment community on a large scale. It’s just too bad it took the federal government forever to get the regulations and rules to a point where it could really begin to generate some economic activity,” Mears said.

“Meanwhile, as people sat around and waited, life kind of went on.”

Inda said some local investors aren’t used to tax programs that could tap out-of-state investors for local projects.

“Some local investors might have a Rolodex of 50 other local investors they’ve partnered with on other projects in the past. With opportunity zones, they’d have to get used to the idea they might find investment partners from out of state. It’s a national program.”

Inda gave a hypothetical example: A Hawaiian investor could be eyeing Janesville.

“Imagine Janesville getting a $10 million investment in a housing project from some investor who lives in Hawaii. That would be unique and new and exactly what the program was designed to achieve,” Inda said.

“It’s why I think local governments should trumpet this program from the mountaintops.”

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Friends of Noah looks back on 10 years of keeping people, pets together

Lois Corwin was still new to Rock County when she heard the heart-rending stories of abandoned and stray animals.

She and her husband, Mert, had moved from Cincinnati to rural Edgerton not long after the closing of General Motors.

As Corwin got to know people, she found that some faced the choice of feeding themselves or their pets.

“I thought about the animals, and I thought about the people who loved them,” Corwin said. “That was the spark that started it.”

Newly retired, she had worked 35 years in the corporate world.

But instead of packing away her business skills, Corwin used them in 2010 to start a nonprofit animal rescue called Friends of Noah.

Ten years later, the volunteer-based dog and cat rescue is still helping animals and people and still going strong.

Friends of Noah does its work solely through private donations and fundraisers, and its biggest fundraiser of the year is Saturday, Feb. 22, at Janesville’s Pontiac Convention Center.

On average, the group rescues, fosters and finds new homes for 85 dogs and cats from Rock County annually.

Unlike some animal rescues, its focus is on local animals and local families.

Over the years, however, the organization has evolved into something that does much more.

“We realized we were putting our thumbs in the dike,” Corwin said. “We weren’t solving the real problem at the front end, which was keeping animals in their homes in the first place.”

So, in addition to rescuing animals off the street, Friends of Noah developed three programs to prevent abandonment and neglect of pets.

Feeding the animals

Shiela Lund-Wild coordinates the group’s Companion Animal Food Effort or CAFE. The program provides pet food to eight area food pantries, so low-income people are not forced to give up family pets when they cannot afford to feed them.

“We distribute through local food pantries because the families already have been vetted for being in need,” Lund-Wild said.

CAFE has provided up to 22,000 pounds of dog and cat food to feed up to 2,700 pets annually.

Friends of Noah hosts food drives and has barrels in several Janesville locations for donations.

Lund-Wild has been in charge of CAFE for about five years. Some weeks she runs ragged trying to keep up, but she never loses sight of the reason she works so hard.

“The animals motivate me,” she said. “I’ve always been involved in animal rescue, and I always want what is best for them.”

Lund-Wild also provides a foster home for animals of Friends of Noah while they wait for permanent homes. In addition, she is heavily involved in fundraising.

In the decade since CAFE began, the need for pet food has not gone away.

“There is a definite need out there,” Lund-Wild said. “It has not slowed down at all. I’m delighted we can do so much to fill that need.”

People at Friends of Noah also realize that sometimes pet owners cannot afford the cost of medical care and are faced with euthanizing or giving up their pets.

In response, the rescue provides about $15,000 in medical care annually.

Educating the public

Every year, volunteers at Friends of Noah offer a program called Saving Animals through Focused Education to about 1,300 young people. The program is designed to develop caring, committed and compassionate pet owners.

“We do work in schools, sometimes in libraries and for years we’ve gone to YWCA summer camps,” said Amber Gray, SAFE coordinator. “Our ultimate goal is to keep pets in their homes.”

During programs, Noah volunteers teach responsible pet ownership and animal safety, including how to read a dog’s body language, with role playing and hands-on activities.

In addition, the rescue answers questions that come by phone.

“We spend a lot of time counseling the public,” Corwin said. “We have a vet and a trainer who handle a lot of the calls.”

She called Friends of Noah successful because of “a strong team environment focused on the end goal,” which is to care for animals and the people who love them.

“This takes a lot of work and a lot of hours,” Corwin said, praising the group’s 85 active volunteers.

Corwin considers herself lucky to have met so many people willing to pitch in.

“Life is about helping others,” she said. “What I learned from both the animals and the people is that, when you help others, it comes back to you tenfold.”

Anna Marie Lux is a Sunday columnist for The Gazette. Call her with ideas or comments at 608-755-8264 or email amarielux@gazettextra.com.

GOP sends message that Trump’s actions were OK


Republicans have decided it was OK.

With their expected vote this coming week to acquit President Donald Trump of abusing power and obstructing Congress, GOP senators are giving their express approval to the conduct that landed Trump at the center of the fourth impeachment case in American history. It’s the same message that House Republicans sent late last year with their unanimous votes against sending the case to trial.

It’s a fitting conclusion for a president who has spent three years testing the boundaries of his office and daring his own party to restrain him as his power and popularity within the GOP grew. It was already clear heading into the impeachment inquiry just how reluctant Republicans were to challenge Trump’s impulses. Coming out of the trial it’s uncertain whether there is anything he can do in office that would draw more than a passing, rhetorical rebuke from his party.

To Democrats, who initiated the impeachment process in hopes of pulling at least a handful of moderate or retiring GOP lawmakers to their side, Republicans are sending the message that, when it comes to Trump, nothing matters. His grip on the party is complete.

“No,” Rep. Hakeem Jeffries, one of the House Democratic impeachment managers, said in a retort to Republicans. “Lawlessness matters, abuse of power matters, corruption matters. The Constitution matters.”

The reasons are clear for Republican lawmakers’ fealty to Trump. When he was a candidate in the 2016 primary, nearly all of them opposed him, often in terms as harsh as Democrats now use. Today, he inspires a loyalty borne of fear and retribution but also of the belief that Republicans’ own political fortunes are directly tied to his.

Though that brings with it risk in the November election, most vulnerable Republicans cannot succeed without him.

On the brink of the acquittal vote, some Republican senators insist that doesn’t mean they are simply giving Trump a pass. They argue there is more to consider in this moment than a yes or no question on whether Trump violated his oath of office by pushing Ukraine to investigate his Democratic opponents and blocking Congress’ ability to investigate the matter.

GOP Sen. Lamar Alexander of Tennessee, who is not seeking reelection, called Trump’s overtures to Ukraine “inappropriate” and thoroughly proved by House Democrats, but that Trump’s actions did not rise to the level of high crimes and misdemeanors. Sen. Marco Rubio, R-Fla., went so far as to suggest Trump’s actions may have indeed been impeachable, but Rubio argued that removing Trump from office was not the right remedy.

“Just because actions meet a standard of impeachment does not mean it is in the best interest of the country to remove a president from office,” Rubio said.

But behind the flickers of disapproval and the sober, carefully parsed statements, the all but certain acquittal vote Wednesday means Republicans are also accepting Trump’s behavior and establishing a precedent for the ways in which an American president can wield the power of the office for personal political gain.

Trump has long made clear that he sees few limits to his power. He saw vindication, not flashing warning lights, after special counsel Robert Mueller’s investigation into his possible obstruction of justice ended without any consequences. Shortly after that inquiry ended, Trump stated that the Constitution gives him “the right to do whatever I want as president.” Indeed, his phone call with Ukraine’s leader came just a day after Mueller testified before Congress.

At times during the impeachment case, Trump’s lawyers echoed those same arguments, most notably when retired Harvard law professor Alan Dershowitz said that if a president believes his personal interests are in the national interests, then his actions are not impeachable.

Though Dershowitz later tried to back away from the most expansive interpretations of his remarks, the crux of his argument remained: Trump wasn’t out of bounds in seeking a foreign government’s assistance for personal political gain, nor would he or a future president be if it happened again.

Democrats entered the impeachment process optimistic that this might be a moment that would weaken Trump’s hold on his party. They believed this investigation was different from those that preceded it, including Mueller’s, because it was rooted in Trump’s own words to Ukraine’s president and confirmed in a rough transcript made public by the president, who insisted the phone call was “perfect.”

As the impeachment case began, some Republican lawmakers expressed public concern over the president’s dealings with Ukraine; even more did so privately.

There were also moments that tested Republicans’ loyalty to Trump.

But those moments of GOP anxiety proved to be fleeting. Time after time, Republicans found reasons to stand by the president.

“It seems like the die has been cast here,” Biden said Friday after a campaign event in Iowa. The only remedy that remains, he said, comes in November.

“I just have to beat him in the general election,” he said of Trump.

Trump will now campaign with the stain of impeachment on his record.

Obituaries and death notices for Feb. 2, 2020

David Ammerman

Mitzi Forsyth Axtell

Glenda Kaye Beckwith

Ralph M. Geske

Patricia Ann Kuykendall

Darwin R. Merritt

Dennis Arthur Powers

Judith Root

Lee A. Shultz

Clifford “Red” J. St. Clair Jr.

Sheila R. Tabbert