Foley & Lardner LLP announced today the firm’s new Opportunity Zone initiative, which launched shortly following the enactment of the Tax Cuts and Jobs Act of 2017 (the TCJA). The TCJA designated Opportunity Zones—which have now been selected in all 50 states, the District of Columbia, and five U.S. possessions—to provide significant tax benefits to incentivize long-term investment in economically-distressed communities.
Through this initiative, Foley is advising clients interested in Opportunity Zones, as well as advocating for legislative and regulatory attention, including meeting with high-level federal government officials tasked with rolling out the Opportunity Zone program. The firm is also working with state government officials interested in pairing state incentives to maximize investment interest.
“The Opportunity Zone program has the potential to provide great tax benefits to investors,” said John A. Eliason, a partner and tax lawyer at Foley. “Some states are trying to layer their own incentives on top of those provided by the Opportunity Zone legislation, essentially creating competition for investors among the states. If they qualify, investors will reap rewards at the federal level regardless of state tax incentives, but if there’s a dual opportunity to receive federal and state benefits for investing in an Opportunity Zone, it might tip the scale in favor of those states pushing harder to attract investments.”
Foley’s Opportunity Zone team, which taps lawyers from a variety or practice groups and offices, advises clients on Opportunity Zone fund formations and investments. For example, Foley’s fund sponsor-clients rely on the firm to help them navigate the complex tax and structuring issues in launching a qualified opportunity fund, particularly one that provides flexibility to the sponsor while at the same time capturing Opportunity Zone tax benefits.
Michael K. Crossen, a partner and business lawyer at Foley, added, “The Opportunity Zone program can transform regions that have been left behind and can benefit greatly from development and job growth. States are excited by the program and are pairing state incentives to maximize investment interest. We’ll see activity not just from the real estate sector, but also participation by private equity and other investors, as well as local and national businesses.”
Following on the heels of the firm’s February event, “Foley & Lardner's Investment Summit: Opportunity Zones Massachusetts,” the Opportunity Zone team will be hosting a variety of events and webinars on the topic. To learn more about Foley’s Opportunity Zone initiative, services and events, click here.