Policy Corner | January 28, 2021

Opportunity Zone deals flow as investors eye new rules

Dennis Price
ImpactAlpha Editor

Dennis Price

ImpactAlpha, Jan. 28 – The Trump administration touted Opportunity Zones among its policy achievements. President Biden is proposing changes to make them work better for Black and Brown communities and small businesses. Impact investors aren’t waiting.

Arctaris Impact Investors committed $8.5 million to companies in Opportunity Zones in low-to-moderate income census tracts in Ohio’s Cuyahoga County. The Arctaris Cuyahoga Impact Program includes a $1.5 million loan from the county and aims to maintain the region’s manufacturing base “while encouraging minority manufacturing business ownership and creating quality jobs for residents,” says Arctaris’ Uche Osuji.

Arctaris also is building broadband networks in Opportunity Zones in Belfast and South Portland, Maine, and last year launched a $40 million Opportunity Fund for Erie, Penn. Verte Opportunity Fund last month backed electric vehicle charging startup OBE Power in a Miami Opportunity Zone.

  • Transparency. The Biden administration wants more clarity around where capital is flowing, and the impact it’s creating (see, “Opportunity Zone capital flows to real estate but not to small businesses – or impact”). “One of the frustrations across the marketplace, no matter where you stand on the program, is that there’s not enough transparent data about how capital flows are going to the funds, and to projects, and to which parts of the country geographically,” Develop’s Steve Glickman told BizNow. In Cuyahoga County, a community advisory committee will approve investments based on their social impact.
  • Policy corner. Investors with late 2020 capital gains have a couple more months to claim Opportunity Zone tax advantages. Because of COVID, the IRS extended the deadline for reinvesting capital gains into Opportunity Zones. Under the new notice, gains realized by taxpayers since October are now eligible for Opportunity Zone investments through March 31.

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