On January 9th, the Economic Innovation Group hosted a webinar with guest experts to discuss the final regulations on Opportunity Zones, released by Treasury and the IRS on December 19, 2019. Lisa Zarlenga of Steptoe & Johnson LLP and Michael Novogradac of Novogradac & Company LLP provided a detailed overview of key provisions, discussed how the newly-minted rules may influence investment activity, and highlighted topics that were not addressed as part of the final regulatory framework.
A recording of the webinar can be found here.
During the webinar, EIG’s Rachel Reilly and Catherine Lyons discussed the regulatory rulemaking process and key takeaways from the final regulations and shared market resources such as the OZ Activity Map and Opportunity Zone Development Profiles. Lisa Zarlenga and Michael Novogradac provided a detailed overview of the final regulations, explained key provisions, compared revisions and refinements made in the final regulations to what had been previously proposed, offered examples of activities that may be subject to anti-abuse rules, and shared insights into how the final regulations may impact Opportunity Zone investment activity.
Overall, having a final set of rules for Opportunity Zones will provide the clarity needed to encourage increased investment and community engagement. Within the regulations, Treasury and the IRS responded to suggestions received during the comment period, providing additional clarity and making revisions/refinements where it was deemed appropriate.
The final regulations reflect input from a wide array of stakeholders, and the improvements made will help to:
- Facilitate increased investment in operating businesses
- Increase the supply of capital into the Opportunity Zone investment market
- Provide communities with the flexibility needed to address vacancy and blight
- Remove uncertainty around key terms and definitions
- Bar bad actors and address abuse of the incentive as defined by Treasury
Throughout the webinar, participants submitted questions. The speaker’s answers to these questions will be posted here in the coming days.
EIG’s OZ Webinar Series: This webinar is the eighth in a series EIG will host throughout 2019 and 2020. These webinars address a variety of topics related to Opportunity Zones implementation, showcase best practices from around the country, and serve as a resource for investors, project sponsors, entrepreneurs, and community developers looking to use the incentive. So far, EIG has covered an introduction to Opportunity Zones, an analysis of the April 2019 round of regulations, community best practices in heartland, rural, and tribal communities, an overview of Opportunity Zones investments in operating businesses and affordable housing and the role anchor institutions can play in supporting Opportunity Zone activities.