Byline: David Hutter
Proponents of opportunity zones touted them as a wise investment over a period of several years.
Created by the Tax Cuts and Jobs Act of 2017, the Opportunity Zone program is designed to spur economic development by providing preferential tax treatment for investments in certain areas. The federal government has approved zones in 75 municipalities and 169 census tracts in New Jersey. U.S. Sen. Cory Booker was a sponsor of legislation creating the federal Opportunity Zones, several of which are in Newark.
NJBIZ hosted a panel discussion on opportunity zones on June 11 at The Palace at Somerset Park.
Mark Nicastro, certified public accountant and a partner at accounting firm Friedman LLP, brings more than 36 years' experience in understanding opportunity zones.
"We are dealing with an act now that I have not seen in 36 years," Nicastro said.
"This law is the worst written law," Nicastro said. "The end game of the opportunity zone is 2026: we are paying Uncle Sam. Anyone who is considering going into an opportunity fund will need a set of advisors."
"A proposed regulation is just a step above the instructions," Nicastro said. "I say that tongue in check, but it's the truth."
"We need to take care of our communities that are less fortunate," he added.
Proponents of opportunity zones describe it as making an investment in under-served communities.
Eduardo Rodriguez, the director of planning and community development for the city of Elizabeth, oversees planning and zoning.
"After this law passed, our first point was identifying the first tracks that are feasible for development for these projects," Rodriguez said.
Stephen Jones, government relations regional manager at the International Code Council Inc., used to serve on local planning boards. He said that opportunity zones are new for municipal governments whose employees did not receive training.
"You may be faced with resistance because you are dealing with municipal governments who do not know what it means," Jones said.
Jones sees the opportunity zone as revitalizing blighted areas.
"The issue is getting the right people in the right seats to move your project forward," Jones said. "There is a long process to upgrade master plans," Jones said. "You may take years before you put a shovel in the ground."
"Some communities deal with technical review committees," Jones said. "The other thing that is a pitfall is permit-funding in communities. It is better to...