The Tax Cuts and Jobs Act of 2017 created the designation “Opportunity Zone,” for which the Internal Revenue Service will allow tax advantages for certain investments in lower-income areas when an Opportunity Fund invests more than 90% of its assets in a zoned property.
As of last December, there were nearly 8,800 Opportunity Zones in the U.S. and its five possessions, according to the Treasury Department. Developers must invest in Qualified Opportunity Zones by the end of this year to meet a seven-year holding period that allows them to exclude 15% of the deferred capital gain. The IRS is in the final stages of finalizing this program’s regulatory framework.
One such investment entity is Chicago-based Decennial Group, which is targeting investment of $1 billion in development projects to leverage the tax incentives created by the 2017 law. Over the next decade the JV could look to invest up to $20 billion for new projects, according to The Real Deal, which also reports that Decennial Group is exploring 250 potential projects in Opportunity Zones around the country, and is in advanced negotiations on at least three projects.
Decennial Group is a joint venture comprised of Scott Goodman, the founding principal of Farpoint Development, a real estate development company; Bob Clark, founder and CEO of Clayco, the full-service development, planning, architecture, engineering, and construction firm; and Shawn Clark, president of CRG, Clayco’s real estate and development company.
According to a prepared statement, Decennial Group will focus on commercial, industrial, multifamily, and energy projects located in Opportunity Zones, and especially in America’s heartland region.
One of Farpoint Development's investments is Burnham Lakefront, located within an Opportunity Zone on Chicago's South Side. Image: Farpoint Development
Among Goodman’s development projects is Burnham Lakefront, a 100-acre campus within a recently designated Opportunity Zone that’s the former site of Michael Reese Hospital near the McCormick Place Marshalling Yard on Chicago South Side. The developer is planning 12 million sf of vertical construction along two miles of lakefront.
“Decennial will make smart, long-term investments throughout the country, but we will begin by capitalizing on deep relationships and an already strong pipeline of deals in the Heartland, where we have unparalleled investing experience,” says Goodman.
Bob Clark adds that CRG will provide development and site selection expertise as well as design-build services so that Decennial Group can “act quickly on great OZ opportunities around the country.”
Decennial Group is distinguishing itself from other OZ funds with a renewable energy strategy that’s being led by David Pavlik, cofounder and principal with 11 Million Acres, a leading energy real estate development platform that has structured over $2 billion in renewable energy and infrastructure projects.
The joint venture has tapped Steve Glickman, founder and CEO of Washington D.C.-based Develop LLC, as a senior advisor to the management team. Glickman is cofounder and former CEO of the economic Innovation Group, which was an architect of the Opportunity Zone program.
Related Stories
| Oct 31, 2014
Dubai plans world’s next tallest towers
Emaar Properties has unveiled plans for a new project containing two towers that will top the charts in height, making them the world’s tallest towers once completed.
| Oct 15, 2014
Final touches make 432 Park Avenue tower second tallest in New York City
Concrete has been poured for the final floors of the residential high-rise at 432 Park Avenue in New York City, making it the city’s second-tallest building and the tallest residential tower in the Western Hemisphere.
| Oct 6, 2014
Moshe Safdie: Skyscrapers lead to erosion of urban connectivity
The 76-year-old architect sees skyscrapers and the privatization of public space to be the most problematic parts of modern city design.
| Sep 23, 2014
Cloud-shaped skyscraper complex wins Shenzhen Bay Super City design competition
Forget the cubist, clinical, glass and concrete jungle of today's financial districts. Shenzhen's new plan features a complex of cloud-shaped skyscrapers connected to one another with sloping bridges.
| Sep 15, 2014
Argentina reveals plans for Latin America’s tallest structure
Argentine President Cristina Fernández de Kirchner announces the winning design by MRA+A Álvarez | Bernabó | Sabatini for the capital's new miexed use tower.
| Sep 5, 2014
First Look: Zaha Hadid's Grace on Coronation towers in Australia
Zaha Hadid's latest project in Australia is a complex of three, tapered residential high-rises that have expansive grounds to provide the surrounding community unobstructed views and access to the town's waterfront.
| Aug 19, 2014
Goettsch Partners unveils design for mega mixed-use development in Shenzhen [slideshow]
The overall design concept is of a complex of textured buildings that would differentiate from the surrounding blue-glass buildings of Shenzhen.
| Aug 18, 2014
SPARK’s newly unveiled mixed-use development references China's flowing hillscape
Architecture firm SPARK recently finished a design for a new development in Shenzhen. The 770,700 square-foot mixed-use structure's design mimics the hilly landscape of the site's locale.
| Jul 17, 2014
A new, vibrant waterfront for the capital
Plans to improve Washington D.C.'s Potomac River waterfront by Maine Ave. have been discussed for years. Finally, The Wharf has started its first phase of construction.
| Jul 17, 2014
A high-rise with outdoor, vertical community space? It's possible! [slideshow]
Danish design firm C.F. Møller has developed a novel way to increase community space without compromising privacy or indoor space.
