The City of Indianapolis is poised to benefit greatly from community investments made by participants in the federal Opportunity Zone program, according to one of the chief architects of the program. Appearing March 13 at an Opportunity Zone event hosted by Ice Miller LLP and Katz Sapper & Miller LLP at the Conrad Indianapolis, Steve Glickman, co-founder (along with Sean Parker, co-founder of Napster and Founding President of Facebook) of the Economic Innovation Group and chief executive officer of Develop LLC, implored public and private sector leaders to develop a comprehensive and integrated strategy for marketing Indianapolis’ competitive advantages to capital sources throughout the country.
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While at the Economic Innovation Group, Steve designed the Qualified Opportunity Zones program and drafted the underlying legislation championed by Senators Tim Scott (R-SC) and Cory Booker (D-NJ). The legislation received nearly 100 congressional cosponsors before being passed into law as part of the 2017 Tax Cut and Jobs Act. Since founding Develop LLC, Steve has advised hundreds of investors and dozens of communities to help them take advantage of the tax incentives established in the Opportunity Zone legislation.
Steve relayed to the audience that the success of the Opportunity Zones program depends in no small part on the ability of state and local governments and community stakeholders to align the goals of the Opportunity Zones program with state and local priorities. He highlighted the efforts of governors in Ohio and Maryland to provide state tax credits for opportunity zone investments as examples of the type of innovative thinking necessary to attract private investment into Opportunity Zones in their states. Steve cautioned, however, that in order to attract the attention of investors to communities outside of the gateway markets, municipalities and community leaders must aggressively market their Opportunity Zones.
Steve was bullish on the potential for Indianapolis to attract Opportunity Zone investment. “Indianapolis has probably a set of the most attractive [Opportunity] Zones in the country,” Steve noted. “When you compare the zones to each other, Indianapolis scores really well [in economic metrics that measure the efficacy of a potential Opportunity Zone investment.]”
Following Steve’s appearance, a panel of Indianapolis business leaders and advisors discussed their efforts to marry their business objectives with the evolving requirements of the nascent Opportunity Zones program.
Eric Gershman, a principal at Gershman Partners, noted that “funds are starting to call from the coasts looking to team up with developers that can put deals together” in Indiana. Anthony Bridgeman, Vice President Community Development Banking at PNC, said that, in starting its own national Opportunity Zone fund, PNC has focused on “projects that can catalyze community economic development in the communities in which [PNC] is located.” Chad Halstead, a partner in the Tax Services Group at Katz, and Matthew Ehinger, a partner in the Tax Group at Ice Miller, provided the audience with their perspectives on the current state of federal Opportunity Zones regulations and the open issues they each expect the Internal Revenue Service to address in the next round of proposed regulations, tentatively scheduled for promulgation in April 2019./
Ice Miller and Katz Sapper & Miller have been advising their clients in all aspects of Opportunity Zone transactions – from fund formation and tax structuring to real estate development – since the Opportunity Zone program was codified into law. The firms organized this event, which brought together over 200 real estate developers, fund managers, wealth management professionals, state and local government officials and other thought leaders to identify best practices for spurring investment in and development of Opportunity Zone projects throughout the state of Indiana.
For more information about Opportunity Zones, contact a member of Ice Miller’s team.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.