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Opportunity Zones News Briefs – February 2019

Legislation introduced in South Carolina Dec. 18, 2018, would create a 25 percent tax credit for companies that investment in opportunity zones (OZs). H. 3186, sponsored by Rep. Marvin Pendarvis, includes a cap of $50,000 per taxpayer, would allow the credit to be carried over for up to five years and would begin in 2019. The legislation was assigned to the state Ways and Means Committee. The bill is available at www.opportunityzonesresourcecenter.com.

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Maryland Gov. Larry Hogan announced Jan. 3 a series of initiatives to expand the OZ incentive in his state. Maryland will make $20 million available for building or renovating affordable housing, $8 million for small business lending and $3.5 million for site acquisition and demolition of derelict buildings and redevelopment in OZs. The state’s EARN workforce development grant program will invest $3 million in a job training program for businesses in the state’s 139 OZs and the state will issue other grants for businesses to provide workforce training programs. Hogan also signed an executive order to create a state OZ leadership task force, which will host regional summits throughout the state. He said his administration will introduce the More Opportunities for Marylanders Act of 2019 to extend a 10-year tax credit for each new job created by a company that locates or expands in an OZ in the state. The executive order is available at www.opportunityzonesresourcecenter.com.

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Local Initiatives Support Corporation announced Dec. 5, 2018, the appointment of George Ashton as the new managing director of strategic investments. Ashton will focus on a range of high-impact investments that create jobs, fuel small businesses, revitalize commercial areas, improve housing, expand local incomes and make communities safer and stronger. Ashton will also manage a multidimensional OZ effort ranging from raising capital to managing third-party funds to collaborating with city and state officials on ways to maximize the long-term impact of this new source of capital. Ashton recently served as co-founder and president of Sol System. Before that, he worked as a senior account executive at Fannie Mae.

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Sheppard Mullin closed Nov. 29, 2018, an OZ fund and related joint venture sponsored by LLJ Ventures LLC. The OZ fund invested in a qualified OZ business set to develop a mixed-use development with traditional office, industrial and creative space in Portland, Ore. The related joint venture acquired a parcel that will be packaged to sell in future to investors seeking OZ deals. 

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Anthony Scaramucci, founder and co-managing partner of SkyBridge Capital, an alternative investment firm, launched Dec. 11, 2018, the SkyBridge-EJF Opportunity Zone REIT. The SOZ REIT will invest in U.S. Treasury-certified OZs. The minimum investment in the private, nonexchange-traded REIT is $100,000. The fund began accepting capital Dec. 1, 2018. 

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Preservation of a registered historic landmark in Lowell, Mass. began Jan. 2. The Cherrytree Group received federal historic tax credits to transform the building into the Lowell Legacy Hotel. Developer Athenian Corner Inc., will rehabilitate the building to include 52 guest rooms, as well as banquet facilities. The five-story building was built between 1896 and 1905. Syndication of the tax credits is being managed by Cherrytree Group through an OZ fund. 

Journal Category:

Opportunity Zones

Authors:

Novogradac

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