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The Tax Cut and Jobs Act of 2017 created a new economic development tool designed to encourage job creation and economic development in distressed communities, which are designated as qualified Opportunity Zones. The incentive operates to make Qualified Opportunity Zones an attractive target for investment by providing favorable treatment for the taxation of capital gains, which are invested through a Qualified Opportunity Fund into eligible property or businesses located in a Qualified Opportunity Zone. The new Opportunity Zone incentive is a powerful development tool, which may be combined with other federal and state development incentives to reduce capital costs for eligible projects located in Qualified Opportunity Zones.
Dickinson Wright’s Opportunity Zones Team can help real estate developers, fund managers, investors, syndicators, community development professionals, and owners of Opportunity Zone businesses maximize the full benefits of the new Opportunity Zones incentive. Our lawyers have followed and reviewed this new program since its inception and continue to track the implementation of Treasury regulations for the Opportunity Zone program. We have the experience to help developers navigate the requirements of multiple development incentive programs and structure transactions so that owners, investors, and fund managers meet the requirements for the Opportunity Zone program, as well as other complimentary tax credit and other incentives for their projects.
Our multidisciplinary approach and extensive background in federal and state tax credits, economic development incentives, partnership law, real estate, taxation, and project finance allow us to provide counsel on an Opportunity Zone project from the broadest perspective possible. We have an extensive history of working with municipalities, developers and lenders on sophisticated project finance transactions. This history gives us deep relationships with professionals in the community development arena who seek to secure and drive Opportunity Zone investments.
Dickinson Wright recently completed the formation of a Qualified Opportunity Fund whose purpose will be to invest in eligible projects located in any of the five Opportunity Zones census tracts in Niagara Falls, New York. The fund is the result of a creative partnership between the City of Niagara Falls and Blue Cardinal Capital, the fund sponsor, and seeks to co-invest in eligible projects in the Niagara Falls Opportunity Zones.