Trump boosts federal resources to Opportunity Zones, as real estate investors keep pouring in

The president signed an executive order that creates a task force to help businesses, and local and state governments in low-income areas that comprise the thousands of zones nationwide

TRD NATIONAL /
Dec.December 12, 2018 05:30 PM

President Trump at the White House Wednesday, where he signed an executive order establishing an Opportunity Zones council. Sen. Tim Scott is at right, at left is Secretary of Housing and Urban Development Secretary Ben Carson. (Getty Images)

For months, real estate investors and developers have been setting up multimillion-dollar Opportunity Zone funds, hoping to cash in on a federal program that offers tax incentives to investors who pour money into properties in designated low-income neighborhoods.

On Wednesday, President Trump signed an executive order to direct resources to state and local municipalities to improve basic conditions within the 8,700 designated Opportunity Zones. Businesses in the zones could also be eligible for some of these benefits.

The executive order created a task force to be led by U.S. Secretary of Housing and Urban Development Ben Carson. It will consist of 13 different federal agencies. The president said Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross will also be part of the group.

The move is designed to help businesses and local and state governments in the zones receive federal funding and backing for community needs like infrastructure, crime prevention and small business lending, said Steve Glickman, who led the Economic Innovation Group. The organization was credited with helping create the Opportunity Zones program.

In a White House that was live streamed, attendees included South Carolina Republican Sen. Tim Scott, who helped push the Opportunity Zone legislation forward; community leaders from Baltimore, where the president was supposed to hold the event until it was moved to Washington; and billionaire Bob Johnson, who founded the television network BET. Ivanka Trump also attended but did not speak.

Glickman said the executive order could also help small businesses within in the zones secure loans guaranteed by the federal government.

Many large investors have already started setting up funds to invest in Opportunity Zones, which was part of the president’s tax overhaul plan that passed late last year. The program allows developers or investors to delay and potentially forgo paying some capital gains taxes if they invest in an opportunity zone for at least 10 years. 

Firms like RXR Realty, Youngwoo & Associates and Normandy Real Estate have set up funds hoping to raise hundreds of millions of dollars to be used for Opportunity Zones investments.

Former White House communications director — briefly — Anthony Scaramucci and his SkyBridge Capital wants to raise a $3 billion Opportunity Zone fund with EJF Capital. SkyBridge and EJF Capital plan to structure the fund as a REIT.

Other investors and developers are still waiting on the sidelines, looking for more specifics from the Treasury Department and the IRS before deploying capital. The first set of regulations was released in October, and the second set was expected to be released sometime this month.


Related Articles

arrow_forward_ios
Alex Sapir and the site at 1768 Northeast Second Court (Credit: CBRE)

Alex Sapir’s massive Opportunity Zone site in Miami hits the market

Ben Carson, United States Secretary of Housing and Urban Development

HUD Secretary Ben Carson joins Grant Cardone and a power panel for TRD Miami Forum

Broker Jamie Maniscalco and Russell Galbut with 2901 Northeast Second Avenue

Russell Galbut closes on missing piece of his Edgewater assemblage

Rendering of the Brickell hotel development, Tony Cho and Robert Finvarb

Finvarb and Cho land construction loan for mixed-use hotel near Brickell City Centre

Alex Karakhanian, Chaim Cahane, and 45 Northeast 41st Street

Investors under contract to buy Opportunity Zone property in the Design District

Alex Zylberglait and 2650 Biscayne Boulevard (Credit: Google Maps)

Edgewater Opportunity Zone site hits the market for $14M

State report finds open gas valve fueled building explosion at Plantation shopping center

Bayside Marketplace is planning another high-rise entertainment venue with a view

arrow_forward_ios