LEGAL ISSUES


Navigating The Opportunity Zone Program A


By Julie Treppa, Farella Braun + Martel LLP


new economic development tool created to stimulate investment in low-income


communities known as “Oppor- tunity Zones” has been attracting the attention of investors, developers and business owners alike. Te Opportunity Zone Program


emerged as part of a bipartisan effort to induce private investors to infuse capital into low-income communities, which otherwise would rely upon grants or investments from non-profit organizations, federal, state or local governments, and community devel- opment organizations to stimulate growth.


Te Opportunity Zone Program


attracts private capital to Opportunity Zones by extending tax advantages to investors in “Qualified Oppor- tunity Funds” which, in turn, invest in projects or businesses located in these


zones. Te incentive is not limited to real estate invest- ments. Rather, businesses that deploy capital and operate in Opportunity Zones can benefit from this incentive. Moreover, unlike other


tax incentive programs, the Opportunity Zones Program is available to any taxpayer with capital gains to defer, and there is no cap on the benefits that can be claimed under the program. As a result, the program is causing a stir in both the start-up and development community, driving up pricing on real estate sales and lease rates within these communities.


Unanswered Questions Despite widespread interest in the


Opportunity Zone Program, guidance from the Treasury Department on specific program requirements has trickled out.


Proposed regulations were issued in late October of 2018, but those regula- tions left many questions unanswered. In December of 2018,


President Trump signed an executive order estab- lishing the White House Opportunity and Revital- ization Council, which is


tasked with assessing ways to minimize regulatory and administrative costs of investing in Opportunity Zones. Te executive order requires the council to submit a work plan within 90 days of the order, along with a list of best practices and recommended statutory, regulatory and policy changes, but the recent government shutdown will likely disrupt this time table.


Continued on page 14


Preliminary Notice Continued from page 12


themselves with preliminary notices is now misplaced. Every general contractor should automatically serve a preliminary notice on the construction lender at the outset of each project in order to preserve the powerful rights and remedies that California law provides. 


Trevor B. Potter is a litigation associate in the Orange County, Calif. office of Cox, Castle & Nicholson LLP, a full-service law firm focused on real estate. He represents owners and contractors in a wide range of disputes, with a particular emphasis on the litigation of construction claims involving project delay and cost overruns. He can be reached at tpotter@coxcastle.com.


www.AGC-CA.org


In uncertain times... lie the greatest opportunities.


Wendel Rosen’s construction attorneys help bring clarity to the rapid changes–in technology, project delivery systems and risk management–that are shaping the industry. Today’s construction companies need an innovative legal team that can offer a clear vision. We bring things into focus.


See what we’re talking about, visit: www.calconstructionlawblog.com


wendel.com Associated General Contractors of California 13


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24