ASBESTOS ROLL-OFF SERVICES: Signs of (One) Substantial Improvement In Caliber's Downtown Mesa Portfolio

Interior renovations are underway in only one of the eight vacant original historic commercial buildings here on Main Street before December 30, 2017. The buildings and properties were acquired in a number of holding companies established by then Arizona Senator Bob Worsley, registered at his home address in The Groves, qualifying in designations to be included in the federal Opportunity Zone program April 2018 - almost three years ago now.

Caliber’s $7.625 million purchase consists of eight historic buildings along Main Street between Country Club Drive and Center Street. 

All eight of the buildings Caliber purchased were built between 1910 and 1954. An aerial view shows the buildings that Caliber, The Wealth Development Company purchased and will redevelop in Mesa. They are outlined in red.

NOTE: ..."Last week, we met with wealthy people from Paradise Valley who want to invest in downtown Mesa based on what they hear is happening. Speaking of dollars – hard dollars, we – the group I am invested with – we have invested over $20 million already on a bet that downtown Mesa is ready for what’s next.”
Worsley concluded, “I just wanted to say one thing; we need this investment in ASU. We need this center in downtown Mesa.”
CH Mesa Holdings was registered on June 27, 2017 in Delaware. 
Maricopa County Recorder documents shows that CH Mesa Holdings, LLC, a registered limited liability corporation (File Number: 6458344) filed deeds for the following properties:

APN	Address	Last Deed Date
138-35-015	114 W MAIN ST MESA, AZ 85201	10/03/2017
138-35-016 120	120 W MAIN ST MESA, AZ 85201	10/03/2017
138-36-008A	18 W MAIN ST MESA, AZ 85201	10/30/2017
138-36-012 48	48 W MAIN ST MESA, AZ 85201	07/19/2017
138-42-022 155	155 W MAIN ST MESA, AZ 85201	07/07/2017
138-42-030	137 W MAIN ST MESA, AZ 85201	12/12/2017
138-55-004	202 W MAIN ST MESA, AZ 85201	10/03/2017
138-55-009	206 W MAIN ST MESA, AZ 85201	10/03/2017

All of the above properties show a mailing address of 4320 E Brown Road, STE 110, Mesa, AZ 85205. Lyons Development LLC shares the Brown Road address with CH Mesa Holdings, LLC. 

According to the Arizona Corporation Commission, as of 2017, Worsley has been registered as a member of Lyons Development LLC.
Lyons Development LLC registered the following entities in 2017:

L21665169	LYONS DEVELOPMENT LLC	MESA 114 W MAIN LLC
L21757686	LYONS DEVELOPMENT LLC	MESA 137 W MAIN LLC
L21853908	LYONS DEVELOPMENT LLC	MESA 48 W MAIN LLC
L21638767	LYONS DEVELOPMENT LLC	MESA 155 W MAIN LLC
L21657535	LYONS DEVELOPMENT LLC	MESA 18 W MAIN LLC

Investment in, and re-development plans for, the nearly 100,000 square feet of historic urban buildings are important project components to the economic strengthening and downtown transformation efforts of Arizona’s third largest city. 
Caliber Development, a subsidiary of Caliber – The Wealth Development Company, will serve as design-general contractor.
Initial concepts for revitalization include, among others, a rooftop restaurant on The Newberry building.

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Opportunity Zone Tax Benefits

As part of the Tax Cuts and Jobs Act enacted into law in December 2017, the Opportunity Zone statute (codified as Section 1400Z of the Tax Code) provides two main tax incentives designed to encourage investment in opportunity zones. First, the legislation allows for the deferral of gain to the extent that corresponding amounts are reinvested into one of more “qualified opportunity funds” (or QOFs).

 

Second, the legislation excludes from gross income the post-acquisition gains on investments in QOFs that are held for at least 10 years.

The Opportunity Zone legislation left a lot of questions unanswered regarding how to comply with the rules. This lack of guidance meant that taxpayers have been unwilling to make investments for fear that they would not be entitled to receive the favorable tax treatment that the legislation provides.
While the Proposed Regulations still leave some questions unanswered, they provide enough certainty to allow for prudent investment.

Proposed Regulations

The Proposed Regulations both describe and clarify the requirements that must be met by a taxpayer in order to defer the recognition of gains by investing in a QOF and provide rules for QOFs relating to self-certification and some of the ongoing requirements imposed on QOFs. . .

INFORMATION PLEASE: To qualify and be eligible as 'Opportunity Zones' OZ certain criteria are required. They sound nothing like the words vibrant and exciting used by city officials to describe what used-to-be the Central Business District before the 1970's: low income, chronically poor, blighted, neglected and under-developed
PRESS RELEASE

Caliber and Habitat Metro buy eight Arizona buildings for $7.5M

February 26, 2018 By Iris Dorbian

SCOTTSDALE, Ariz.–(BUSINESS WIRE)–Caliber – The Wealth Development Company, a real estate investment, development and management firm, and project partner, Habitat Metro, have purchased eight downtown buildings for $7.5 million on Main Street in Mesa, Arizona. 
(See other posts on this blog for more details)

 

 

 

The proposed regulations also provide that if at least 70 percent of the tangible business property owned or leased by a trade or business is qualified opportunity zone business property, the requirement that “substantially all” of such tangible business property is qualified opportunity zone business property can be satisfied if other requirements are met. If the tangible property is a building, the proposed regulations provide that “substantial improvement” is measured based only on the basis of the building (not of the underlying land).
In addition to the proposed regulations, Treasury and the IRS issued an additional piece of guidance to aid taxpayers in participating in the qualified Opportunity Zone incentive

Rev. Rul. 2018-29 provides guidance for taxpayers on the “original use” requirement for land purchased after 2017 in qualified opportunity zones.
They also released Form 8996, which investment vehicles will use to self-certify as QOFs.       
More information on Opportunity Zones, including answers to frequently-asked questions, is on the Tax Reform page of IRS.gov. The Tax Reform page will also feature updates on the implementation of this and other TCJA provisions.
Click here for complete list of Opportunity Zones.
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Here's a wider angle perspective behind 114 W Main Street

 

 

 and a sidewalk view of the boarded up storefront three doors west of Macdonald

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