Opportunity Zones are a reality now that all of the communities and eligible census tracts have been selected by individual state governors. Regarding forming an investment vehicle and/or group to steer investments, the only Treasury guidance available thus far states that anyone can start an Opportunity Zone investment fund with no other requirement than the filing of the appropriate form with the IRS. This was obviously a deliberate move on Treasury's part to keep the field wide open for investors to jump in and innovate insofar as partnering with state and local governments, CDCs, for-profit and non-profit developers, banks, et. al. If anything, this "hands off" approach is encouraging an entrepreneurial spirit and a great deal of leeway in forming investment partnerships that make Opportunity Zones a nationally scalable incentive. For example, there is no evidence as yet that deep pocket investors would be prohibited from forming a large national Opportunity Zone fund that could serve as a revolving loan fund of sorts which could funnel investment across state lines and into the selected communities. In other words, return on investment and tax revenues from OZ investments could be funneled into a revolving loan fund separate and distinct from the Opportunity Zone National Fund (OZNF), which is merely providing the tax-deferred capital investment and start-up funding. I'm just speculating, but I think tax-writers may look back and end up kicking themselves later on when they realize that limiting governors to just 25% of eligible census tracts may have been their biggest mistake. As the saying goes, "go big or go home."
Carl Wolf | Policy Analyst, GOVERNMENT RELATIONS P. 202.588.6254
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