The new tax law allows investors who have realized profits from prior investments, known as capital gains, to defer and reduce capital gains taxes on those profits if they invest those gains in economically distressed neighborhoods. Rachael Tabelski, BDC director, asked the City Council on Monday night to approve at its next business meeting a resolution that would allow the BDC to invest $20,000 in setting up a Batavia Opportunity Zone investment vehicle. The goal is to attract $5 million in investment funds. “We’re setting this up so we are on the map as a proactive community taking advantage of a new federal tax law that is allowing investment into low-income census tracks and to show investors and developers that we’re serious about moving our sites forward and creating our own fund as a city,” Tabelski said. In general, the idea is if an investor has capital gains, the investor can move those funds to an opportunity zone investment fund and defer any capital gains tax until 2026. Tabelski and Gordon both said Batavia could be attractive to investors not just because of a break on capital gains tax but also because of other credits available, such as historic building tax credits, new market tax credits, and the availability of PILOTs on building improvements. The BDC-initiated fund will focus on real estate investment but there’s no reason private investors can’t establish their own funds to support business startups and expansions.