This month, ACG staff attended a White House opportunity zones conference for state, local, tribal, and community leaders. Attendees heard from several high-ranking government leaders, including President Donald Trump, Treasury Secretary Steven Mnuchin, Housing and Urban Development Secretary Ben Carson, National Economic Council Director Larry Kudlow, and Council of Economic Advisers Chairman Kevin Hassett.
During his remarks, President Trump highlighted the private capital investment and community revitalization the White House expects the OZ program will create. He also highlighted the newly-formed White House Opportunity and Revitalization Council, created to streamline, coordinate and target existing federal programs towards economically distressed areas and OZs.
Generally, all of the speakers expressed substantial optimism towards the OZ program and the myriad benefits it can produce. Key takeaways from the general session include:
A focus by the administration on prioritizing flexibility and incentives to spur reinvestment, displayed principally through the guidance issued by Treasury. Recently issued guidance includes an initial exclusion of capital from the periodic test dates certifying fund investment requirements, flexible safe harbors for business income requirements and continued preferential tax treatment for those who inherit opportunity fund investments.
The intent to centralize and harmonize federal programs to assist community development in Opportunity Zones. The White House Opportunity and Revitalization Council (talked about previously) will be chaired by Ben Carson, Secretary of Housing and Urban Development, and is charged with streamlining and coordinated the efforts of the 16 agencies which it is responsible for.
Strong desire to shape existing program and resources towards Opportunity Zones. Various speakers repeatedly emphasized recommendations that local governments utilize existing employees, grant funding and federal resources to fill any gaps in their efforts to best utilize OZs. The administration plans to launch opportunityzones.gov, a website designed to centralize all federal resources for the initiative, in the coming months. Additionally, agencies such as the Small Business Administration will be retooling the incentives they currently offer in order to best serve OZ funds, properties and businesses.
A desire to address the need for workforce development and affordable housing needs. In addition to the Department of Housing and Urban Development Request for Information surrounding how they may best prioritize support and work in concert with private enterprise to address community needs, speakers highlighted their desire to harness government resources to best serve the training and housing needs that OZs will require.
During the invite-only Conference, ACG also participated in two breakout sessions on empowering entrepreneurship within OZs, and federal guidance surrounding the program. These breakout sessions were designed to facilitate discussion among private sector, state level government and federal staff on key issues related to the OZ program. Though still in the early stages, administration officials expressed efforts on their part to develop model OZ “prospectuses” and other advertising documents for cities and states to use when communicating with potential investors.
Those responsible for key portions of the federal guidance expressed a strong desire to make the guidance as flexible as possible within the statutory framework developed by Congress, and to work with investors as much as possible to properly tailor requirements of the program, all good news for ACG members interested in participating in the OZ program.