Opportunity Zone update worth a close look

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Good afternoon,

It isn’t easy to get the commercial real estate and development community excited.

As word gets out about the federal government’s  Opportunity Zone program, I have detected a  degree of enthusiasm.

News of the program has trickled out amidst the controversy over the breaks offered in the tax and jobs bill passed earlier in the year.  The State of Delaware saw the potential of the program and recently added an  interactive website.

Opportunity Zones are confined to specific census tracts that are typically in areas with lower incomes or industrial settings. For example, some areas of downtown Wilmington are in a zone while others are not. All three counties have the designated zones

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The tax break rewards investors who need to reinvest capital gains. The provisions are complex, with more guidance expected in coming months.  One issue will be the narrow time frame in the difficult and often lengthy process of approvals.

The Economic Innovation Group, which is viewed a major player in Opportunity Zones,  offers some news and perspectives here.

One big plus, according to the organization, will be the expanded use of private funds in redevelopment, rather than costly state and local incentives that wind up on the backs of taxpayers in Delaware and elsewhere.

Delaware has an incentive program in place in some downtown areas that may also be used in addition to the  Opportunity Zone features.

On Dec. 5, the  University of Delaware’s  STAR campus and UD’s Biden Institute will host a roundtable discussion that will include government officials, developers, investors, and business leaders.

UD comes into the picture because university-anchored communities are Opportunity Zones. 

The STAR Campus has seen some redevelopment of the former Chrysler plant site that is headed toward the $1 billion mark. Only a small portion of the Chrysler site has seen new buildings and employers.

Based on what has taken place around large research-focused college campuses, the Opportunity Zone incentives could spur further development.

Click here  for further information on the December event.  – Enjoy your weekend. Doug Rainey, publisher.

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