The Real Deal New York

This NY lawmaker is going after Opportunity Zone incentives

Michael Gianaris was also appointed to a board that could veto Amazon’s LIC plan
February 06, 2019 10:00AM

Michael Gianaris and Long Island City

State Sen. Michael Gianaris was recently appointed to a board that could derail Amazon’s development plans in Long Island City. Now, he’s going after Opportunity Zones.

Gianaris has introduced a bill that would make the tax break less valuable to real estate developers, Bloomberg reported. The lawmaker said the move comes after he was outraged to learn Amazon’s LIC campus would be in an Opportunity Zone.

The program was intended to spur development in poor neighborhoods — but LIC, which is already seeing rampant development, is relatively wealthy with a median household income of $140,000. Most zones meet the requirement that 20 percent of households live in poverty — but there’s an exception that allows zones near the impoverished tracts to be included. Critics of the plan have voiced concern that those zones will attract majority of new investment, versus the poorer areas.

“What’s become clear to me as a result of the Amazon debacle is the program’s not ready for prime time,” Gianaris told Bloomberg.

Under the program, investors can defer federal taxes on capital gains until Dec. 31, 2026, reduce that tax payment by as much as 15 percent and pay no taxes on possible profits from an opportunity fund if they hold onto the investment for 10 years. The initiative is part of the 2017 tax overhaul.

Last month, Amazon said it wouldn’t pursue Opportunity Zone incentives for its LIC complex.

Gianaris has been a critic of the program as well as Amazon’s LIC plans. Earlier this week, he was appointed to be among three voting members of the Public Authorities Control Board — and any voting member has the power to block projects that come before it. But Gov. Andrew Cuomo still has to approve his appointment. [Bloomberg] — Meenal Vamburkar