2019 SALT Conference On Economic Opportunity Zones: Reinvesting In The Land Of Opportunity

Notes from Russ Bernard, Dan Kowalski, John Lettieri, Emanuel J. Friedman presentation at the 2019 SALT Conference called “Reinvesting In The Land Of Opportunity”

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Reinvesting In The Land Of Opportunity

Russ Bernard - Managing Principal, Westport Capital Partners

Dan Kowalski - Counselor to Secretary of Treasury, United States Treasury

John Lettieri - President & Chief Executive Officer, Economic Innovation Group

Emanuel J. Friedman - Chief Executive Officer & Co-Chief Investment Officer, EJF Capital

Brett Messing - Partner, President & Chief Operating Officer, SkyBridge

• Huge tax incentives for investing in opportunities zones
  • Tax incentive to roll realized capital gains into an opportunity funds
• No gains until 2027, reduced gain of 15-20%
  • Any investments made and held for 10 years has tax free capital gains
• Part of the Trump 2017 tax reform
• The reinvesting in the land program connects the community itself to distribute capital instead of having the government do it
• No cap on the amount to put into the system
  • Already a good traction rate
• Allows for a diverse pool of mutually reinforcing projects
• Some expect $1 trillion plus debt. Some expect $50bb; a lot of hype around the program and some think the program will not be overly successful
• Opportunity Zones are like high school sex, everyone is talking about it and nobody is doing it
• The slowness is attributable to changes in regulations
• Lot of big companies are getting involved. Amazon, Google, DHL, Johnson and Johnson
• The 10 year time frame makes it hard, because most people do not invest with that time frame
• The point is to get investors to look at places they have not looked at before
• Prices have already gone up in areas designated as opp zones
• This is not a Trump program, this is a bipartisan agreement
• More adults with out a GED than a bachelors degree in opportunity zones
• Life expectancy is 4 years lower
• Poverty rates are in the mid-20s%
• There are outliers that people are upset about but needed to leave it desterilized to a degree
• Real Estate  for reinvesting in the land needs to be new builds or major redevelopment, and some of that needs to be in some of the hardest areas to invest

This article first appeared on ValueWalk Premium