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CDFA Opportunity Zones Update Newsletter - May 17, 2022

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CDFA Opportunity Zones Update
May 17, 2022
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Opportunity Zones Update Newsletter

Features

Opportunity Zone Reform: The Opportunity Zones Transparency, Extension, and Improvement Act
CDFA member Frost Brown Todd outlines the six major provisions in the recently introduced Opportunity Zones Transparency, Extension, and Improvement Act. The federal Opportunity Zone tax incentive program has facilitated substantial new investment in designated low-income census tracts across the country. However, due to certain statutory deadlines, some of the tax incentives associated with the program have timed out and the potential benefit of other incentives is currently limited. All that could potentially change because of a recently proposed bipartisan bill that would extend and "revive" the Opportunity Zone tax incentives.

Opportunity Appalachia Seeks Technical Assistance Providers
Opportunity Appalachia is providing targeted technical assistance to communities in Central Appalachia. Through the program, a range of technical assistance will be provided to selected projects, including: market assessment, design/architectural, engineering, business plan development, financial structuring, prospectus preparation, and capital raise support. In particular, TA providers will help local projects raise needed financing from Qualified Opportunity Zone Funds, New Markets Tax Credit CDEs, Historic Tax Credits, banks, CDFIs, private investors and public funders. Interested TA providers should respond to the RFQ issued by Opportunity Appalachia.

Orchard Farming in Opportunity Zones
Farmland can be a compelling asset class for Opportunity Zone investors, as a hedge against inflation and a profitable source of income. But what about orchard farming and other, more specialized agricultural operations? This podcast from OpportunityDb features Josh Guggenheim, the Director of Acquisition at Gold Leaf Farming, a company focused on sustainable farm sourcing and expansion efforts in California and Arizona.

Opportunity Zones Strategies That Support Early-Stage Businesses
CDFA members Economic Innovation Group and gener8tor recently released a webinar to discuss Opportunity Zones efforts to support the growth of early-stage companies. Topics included capacity building initiatives, investments strategies, and proposed policy changes.

Greenland Technologies Selects Maryland OZ for Manufacturing Expansion
Maryland Governor Larry Hogan announced that Greenland Technologies Holding Corporation, a technology developer and manufacturer of electric industrial vehicles, has selected Baltimore County for the next phase of the company's major U.S. expansion. To support its expansion, the company will utilize the state's More Jobs for Marylanders program, administered by CDFAA member Maryland Department of Commerce. The More Jobs for Marylanders program incentivizes new and existing manufacturers to create new jobs in the state, and to non-manufacturers that locate or expand in Maryland Opportunity Zones.

Value of Gain Exclusion Expected to Continue to Drive Opportunity Zones Investment in Low-Income Communities, Even Without Basis Step-Up
Novogradac's 2021 year-end report on equity raising for OZ investment showed more than $24 billion in cumulative investment. However, Dec. 31, 2021, also marked the expiration of one of the four key OZ tax incentives, the 10% gain exclusion. Of the original four key incentives, two remain: the gain deferral to 2026 and the gain exclusion on appreciation, which raises the question of whether capital raising will continue to be strong for qualified opportunity funds (QOFs). The answer appears to be yes –and data from Novogradac's OZ investment survey for the first quarter of 2022 backs that presumption.

Upcoming Events
Intro Housing Finance WebCourse

Exploring Equitable Capital Technology (EC-Tech) in Development Finance
Tuesday, May 24, 2022 - 2:00 PM - 3:00 PM Eastern
CDFA is launching our new Equitable Capital Technology Initiative, which will combine technology solutions with training and technical assistance for lenders to help increase the flow of capital to minority entrepreneurs. Equitable capital technology (or EC-Tech) is emerging as a driver of unlocking capital for small and medium-sized businesses not fit for venture capital, nor large enough for a traditional bank loan.

Opportunity Zones Headlines

Midwest City, OK Positioned for Economic Growth
The Journal Record | May. 13 | Opportunity Zones

Walker & Dunlop Structures $47M in Financing for Savannah Opportunity Zone Development
May. 12 | Opportunity Zones

Tax Incentive Drives Long-Term Capital to Low-Income Tennessee Communities
WKRN | May. 10 | Opportunity Zones

Investing in Puerto Rico's Opportunity Zones
OpportunityDb | May. 9 | Opportunity Zones

Some Affluent Areas in Arizona are Designated as ‘Distressed' Under Federal Program
Arizona's Family | May. 9 | Opportunity Zones

Puerto Rico's Opportunity Zone Program Has Sluggish Start
Bloomberg Tax | May. 3 | Opportunity Zones

Congress Looks to Update Opportunity Zone Program with Bipartisan, Bicameral Legislation
Apr. 29 | Opportunity Zones

Will Congress Finally Reform Opportunity Zones?
Forbes | Apr. 25 | Opportunity Zones

Bullish Opportunity Zones Equity Raising Continues Despite End of Basis Step-Up Benefit
Novogradac | Apr. 21 | Opportunity Zones

EIG Applauds Bipartisan Opportunity Zones Improvements Bill
EIG | Apr. 17 | Opportunity Zones

Sens. Booker, Scott, Kind, Kelly Introduce Bipartisan, Bicameral Bill Reforming OZs
U.S. Senator Cory Booker | Apr. 8 | Access to Capital | Federal | Legislative | Opportunity Zones


Resources

The Opportunity Zones Transparency, Extension, and Improvement Act One Pager
Access to Capital | Federal | Legislative | Opportunity Zones
Senators Booker and Scott and Representatives Kind and Kelly, along with Senators Warner, Young, and Van Hollen, and Representatives Sewell, Walorski, and Kildee, propose a series of improvements to the Opportunity Zones policy to further their shared vision for the program to catalyze funding to these communities and level the economic playing field for their residents.


The Council of Development Finance Agencies (CDFA) is a national association dedicated to the advancement of development finance concerns and interests. CDFA is comprised of the nation's leading and most knowledgeable members of the development finance community representing public, private and non-profit entities alike. For more information, visit www.CDFA.net or email info@cdfa.net.


Council of Development Finance Agencies
100 E. Broad Street, Suite 1200
Columbus, OH 43215
(614) 705-1300
info@cdfa.net

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