Like we now realized back in February 2018 here in Mesa, Arizona many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted.
//// Resource for this post: https://www.nytimes.com/2019/08/31
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BLOGGER NOTE: There are been many posts on this blog site about Opportunity Zones here in Mesa, mostly about rampant real estate speculation here in Downtown Mesa and how plans for taxpayer-debt financing for a satellite ASU campus were the keystone
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Case-in-Point 2: Tony Scaramucci's investment company, SkyBridge Capital, is using the so-called opportunity zone initiative for a new e-commerce center at Mesa-Phoenix Gateway Airport
(“Capital is going to flow to the lowest-risk, highest-return environment,” said Aaron T. Seybert, the social investment officer at the Kresge Foundation, a community-development group in Troy, Mich., that supported the opportunity-zone effort.
“Perhaps 95 percent of this is doing no good for people we care about.”)
Nearly a third of the 31 million people who live in the zones are considered poor — almost double the national poverty rate. Yet there are plenty of affluent areas inside those poor census tracts. And, as investors would soon realize, some of the zones were not low income at all - nearly 200 of the 8,800 federally designated opportunity zones are adjacent to poor areas but are not themselves considered low income.
In some cases, developers have lobbied state officials to include specific plots of land inside opportunity zones. . . and in one local case, it was ex-U.S. Congressman Matt Salmon, hired on as a lobbyist by ASU before his resignation, who appeared with Bob Worsley at a Mesa City Council meeting back in February 2018...
BLOGGER NOTE: Mesa has two of those areas - one on NE Mesa around Falcon Field and one in SE Mesa around Phoenix-Mesa Gateway Area
The law does not require public disclosure of who are taking advantage of the initiative or how they are deploying their funds.
“Opportunity zones, hottest thing going, providing massive new incentives for investment and job creation in distressed communities,” Mr. Trump declared at a recent rally in Cincinnati.________________________________________________________________________________
The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones.
Any profits from those projects can avoid federal taxes altogether.
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FACTOIDS:
> The opportunity-zone tax break was targeted at the trillions of dollars of capital gains held by rich Americans and their companies: profits from investments in the stock market, real estate and other businesses, even short-term trades by hedge funds. When investors sell those assets, they can incur tax bills of up to 41 percent.
> Confined to six pages in the 185-page tax bill, the provision can significantly increase the profits investors reap on real estate and other transactions.
It allows investors to defer for up to seven years any capital gains taxes on the money they invest in opportunity zones. (That deferral is valuable because it allows people to invest a larger sum upfront, potentially generating more profits over time.) After 10 years, the investor can cash out — by selling the opportunity-zone real estate, for example — and not owe any taxes on the profits.
> Over a decade, those dual incentives could increase an investor’s returns by 70 percent, according to an analysis by Novogradac, an accounting firm.
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Cadre, an investment company co-founded by Mr. Kushner and his brother, Joshua, is raising hundreds of millions of dollars that it hopes to use on opportunity-zone projects. The company is eyeing neighborhoods in Savannah, Ga., Dallas, Los Angeles and Nashville that are expected to grow larger and wealthier in coming years. Jared Kushner has a stake in Cadre worth up to $50 million, according to his most recent financial disclosure.
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CBRE, one of the country’s largest real estate companies, is seeking opportunity-zone funding for an apartment building in Alexandria, Va., which CBRE is pitching to prospective investors as “one of the region’s most affluent locations.”
JPMorgan Chase is raising money to build housing targeting students in College Park, Md., near the University of Maryland. (Because many students do not have jobs, census data often wrongly suggests that college towns are poor neighborhoods.)
