William Pitman has worked with accounting and legal firms throughout the state to create his investment opportunity. Photo by Edward Smith.
Written by Gabriel Dillard
Opportunity Zone investment incentives may be just the avenue a Madera farmer and food processor needs to turn his company’s methods for treating almonds into a “game changer” for the entire food industry.
William Pitman, president of Benton Enterprises LLC, has established an investment opportunity to the public for stakes in Berenda Opportunity Fund LLC, the first business-oriented opportunity fund in Madera County.
And he hopes the prospect of avoiding capital gains taxes will be the incentive investors need to climb on board.
Pitman owns Heart Ridge Farms, which adopted a pasteurization method for processing pistachios and almonds. He believes the technology could have applications for a variety of foods, from spices to leafy greens. He even started a separate entity, Adaptable Technology Systems, to market the pasteurization process.
A part of The Tax Cuts and Jobs Act of 2016, the Treasury Department designated certain disadvantaged census tracts as opportunity zones. Investors looking to defer capital gains taxes from one venture can put money into qualified projects via an opportunity fund. If left there for 10 years, the gains put into the project can be withdrawn tax-free.
Pitman hopes this will bring in money from people under the gun to execute funds before the incentive expires.
His method of treating nuts uses what he calls “moist heat,” which allows for a lower pasteurization temperature to eliminating pathogens, making food tasting better and increasing shelf-life, Pitman said.
The method also meets organic, gluten-free and non-GMO standards, he said. The feedback he has received on the quality of his product made him want to bring the method to the rest of the food world.
“We discovered we have a technology that is also applicable for food safety reasons for a lot of products,” Pitman said.
Pitman worked with Fresno-based accounting group Moss Adams LLP and Oakland-based legal firm Cutting Edge Counsel to form the opportunity fund.
When he found out his property was within the geographic bounds of an opportunity zone, the situation and the timing lent itself to the government incentive program. He’s already cleared the initial permits for building.
“We’ve been looking for capital for quite a while,” Pitman said.
Investment will include expanding the current processing facility and storage for pistachios and almonds as well as building a research facility for industry experts in each food category to develop a-la-carte methods for pasteurization.
The development comes on the heels of multiple food recalls, and food safety is something Pitman said he takes seriously.
“They devastate industries when they have a recall. Somebody gets sick and goes to the hospital, and maybe dies,” Pitman said. “We’ve discovered something that’s really cool that we can refine.”
For more information, see a larger story in the Aug. 2 print edition of The Business Journal.