Welcome to In the Zone: GT Qualified Opportunity Zone News. Our monthly digest of the latest federal and state developments in Qualified Opportunity Zones and Qualified Opportunity Funds and related Greenberg Traurig news and events will keep stakeholders apprised of the most pressing issues in this burgeoning space.

President Trump’s Tweets Show Continued Strong Support for Opportunity Zones

President Trump tweets support for opportunity zones, August 18, 2019Client Spotlight: The Real Estate Roundtable – Roundtable Opportunity Zones Comment Letter – July 1, 2019

The Real Estate Roundtable submitted a 12-page comment letter on guidance regarding Opportunity Zones on July 1, 2019, to the Treasury Department and IRS.

Treasury released proposed regulations in April 2019 that thoughtfully addressed critical issues regarding the Opportunity Zone tax incentives (see April 17 169-page Treasury regulations and IRS news release). The rules expanded on previously proposed regulations issued in October 2018.

The Roundtable believes the most recent guidance is accelerating capital formation, job creation, and productive real estate investment in struggling, low-income communities. Nonetheless, certain questions remain that warrant additional, clarifying guidance.

Congressional Recognition of Opportunity Zones “Success Stories” Growing

Rep. Glenn “GT” Thompson (R-15-PA) addressed the House in praise of a local Opportunity Zones area in his district: 

RECOGNIZING THE IMPACT OF BELLEFONTE OPPORTUNITY ZONE

Moreover, I am grateful to the residents of Bellefonte for joining as engaged citizens who are passionate about the future of their town. By taking advantage of opportunity zones, communities like Bellefonte can play a more proactive role in the future and the destiny of their town that they call home.  

Congressional Bill Introduction Spotlight

Rep. George Holding (R-2-NC) and member of the powerful Ways & Means Committee introduced legislation recently to incentivize light manufacturing location in Opportunity Zones. His bill -H.R. 3390, the “Incentivizing Investment and Job Creation in Opportunity Zones Act of 2019,” was introduced and referred to the Ways & Means Committee. More bill information can be found here.

Treasury Announces 2 Additional Designated Opportunity Zones in Puerto Rico

On June 25, The U.S. Treasury Department announced two additional qualified opportunity zones for Puerto Rico:

PURPOSE: This notice amplifies Notice 2018-48, 2018-28 I.R.B. 9, which lists the population census tracts that the Secretary of the Treasury (Secretary) designated as qualified opportunity zones (QOZs). Specifically, this notice adds two additional census tracts in Puerto Rico that have been designated as QOZs under § 1400Z-1(b)(3) of the Internal Revenue Code (Code).  With this designation, that brings the total census tracts designated for qualified opportunity zones across the states and territories to 8, 766.

Past Speaking Engagements

Aug. 13, Los Angeles:  “LA Opportunity Zones – What Impact Will OZs Actually Have & Ensuring the Right People Are Benefitted.”  GT Shareholders James O. Lang (Tax) and Sandy Presant (Real Estate) presented “Policy and Regulations: What do you need to know about new regulations and how will California interpret the program?”

Aug. 14, Los Angeles: “Qualified Opportunity Zone Investing – Update on the New Regulations.” Opportunity zones present unprecedented tax benefits. In many cases, gains from investments that are invested in these zones defer taxes on the gains until the property is sold, or 2026.  However, if the investment is held 10 years, the gain on the sale of the property is not subject to further taxation. As with most highly incentivized investment programs, the rules are complex and continue to evolve.  This discussion covered recent proposed regulations, particularly in respect to qualification requirements for application in operating businesses. Jim Lang and Sandy Presant provided unique insights into the program, including its opportunities and pitfalls.

Aug. 15, Tampa: “Qualified Opportunity Zone and Hillsborough County Economic Development Programs for Uptown Tampa.” Tampa Innovation Partnership hosted a Real Estate Breakfast to discuss development incentives in the area, including the Qualified Opportunity Zone and Hillsborough County economic development programs. GT Shareholder Jim Lang provided an introduction to the Qualified Opportunity Zone and QOZ Funds which are part of the new federal tax code through which census tracts are designated by the U. S. Department of Treasury where capital gains may be reinvested in businesses or real estate and tax payments on the gains are deferred or even eliminated. Much of the uptown area lies within designated Opportunity Zones, and the potential for the program to attract private investment could be transformative for the area. Eric Lindstrom, competitive sites and redevelopment manager for the Hillsborough County Economic Development Department, shared details about incentives and opportunities from the county that can be beneficial to developers and businesses.

Aug. 22, Jacksonville: “Opportunity Zones Conference and Marketplace – JaxUSA Partnership and JaxChamber.” Local leaders, developers, investors and small business owners convened for this event to discuss this new, exciting investment tool. Jim Lang presented on the Opportunity Zone incentive, and local experts addressed real estate and business opportunities in the greater Jacksonville region.

Upcoming Speaking Engagements

Sept. 19, Philadelphia: Greenberg Traurig is pleased to host ULI NEXT for an engaging presentation on Philadelphia Opportunity Zones – Shareholder James O. Lang will present highlights and insights on the latest regulation and guidance for this new incentive for real estate and operating business investment in targeted areas, Qualified Opportunity Zones. Learn how investor returns may be significantly increased and developer/sponsor/operators cost of capital may be incentivized through Qualified Opportunity Fund investment into the qualifying projects for job creation and revitalization of neighborhoods. For more information, contact Sharon Mangione.