Jefferson County’s current economic base grew from a rich history of natural resources extraction including logging and fishing in the late 1880s. By the turn of the 20th century, sawmills, fish processing and shipbuilding were firmly established in the coastal areas of the county. The county also was known for smuggling spirits from Canada in and out of the county’s many hidden coves and forests during prohibition.
Port Townsend, the economic center of the county, has experienced periods of boom and bust over the century due to its dependency on these volatile industries. During 2011, Port Townsend finally started to recover from the Great Recession with visible signs of economic growth including new shops, new investments and rebounds in tourism. Annual taxable sales in the county have grown strongly since 2013. In 2018, the Port of Port Townsend had the highest revenue in five years for its major operating units.
The economy of Jefferson County is comprised of both an industrial and an agricultural base. Industrially, the county’s history, climate and terrain supports healthy forest products and maritime sectors, including lumber, fish processing, ship repair and maintenance as well as ship and boatbuilding. The agricultural base encompasses tree farms for logging, aquaculture and a flourishing organic farming sector. Food production, stemming from this growing agricultural segment, includes artisan cheeses and breads. Tourism also provides revenue streams to the county. Economic activity is supported by a vibrant port and airport, ferry terminal and state highways.
A recent development is the Emerald Coast Opportunity Zone (ECOZ), which consists of a diverse group of geographical census tracts intended to make the Olympic Coast more attractive to investors. Working together, ECOZ is catalyzing economic development in rural areas by engaging with communities and connecting the best opportunities with private capital.
This Opportunity Zone is a unique collaboration of five Tribal Nations, four cities, two counties (Clallam and Jefferson) and two port authorities that spans 14 federally designated Opportunity Zone census tracts. Together, the partners of the Emerald Coast Opportunity Zone are building a deal “engine” of community driven projects that both present good investments but also create good jobs, construct affordable and high-end housing, and support innovative entrepreneurs.
The 14 Opportunity Zone census tracts were designated under the federal 2017 Tax Cuts and Jobs Act. This federal law gives tax incentives to investors who invest their unrealized capital gains in qualified businesses and real estate located in Opportunity Zones through:
- Temporary deferral of capital gains taxes until 2026.
- Tax reduction on capital gains (at 5 and 7 years).
- Elimination of taxes on gains from OZ investments (if held for 10 years).