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
Sponsored | | Mar 3, 2015
New York’s Fulton Center relies on TGP for light-flooded, underground transit hub
Fire-rated curtain wall systems filled this subterranean hub with natural light.
Sponsored | Shopping Centers | Feb 26, 2015
A color-changing gateway for Altara Center
Valspar works with developers to complete a multicolored shopping center façade in Honduras.
Industrial Facilities | Feb 24, 2015
Starchitecture meets agriculture: OMA unveils design for Kentucky community farming facility
The $460 million Food Port project will define a new model for the relationship between consumer and producer.
Office Buildings | Feb 18, 2015
Commercial real estate developers optimistic, but concerned about taxes, jobs outlook
The outlook for the commercial real estate industry remains strong despite growing concerns over sluggish job creation and higher taxes, according to a new survey of commercial real estate professionals by NAIOP.
Mixed-Use | Feb 13, 2015
First Look: Sacramento Planning Commission approves mixed-use tower by the new Kings arena
The project, named Downtown Plaza Tower, will have 16 stories and will include a public lobby, retail and office space, 250 hotel rooms, and residences at the top of the tower.
Mixed-Use | Feb 11, 2015
Developer plans to turn Eero Saarinen's Bell Labs HQ into New Urbanist town center
Designed by Eero Saarinen in the late 1950s, the two-million-sf, steel-and-glass building was one of the best-funded and successful corporate research laboratories in the world.
Office Buildings | Jan 27, 2015
London plans to build Foggo Associates' 'can of ham' building
The much delayed high-rise development at London’s 60-70 St. Mary Axe resembles a can of ham, and the project's architects are embracing the playful sobriquet.
Mixed-Use | Jan 26, 2015
MVRDV designs twisty skyscraper to grace Vienna's skyline
The twist maximizes floor space and decreases the amount of shadows the building will cast on the surrounding area.
| Jan 7, 2015
4 audacious projects that could transform Houston
Converting the Astrodome to an urban farm and public park is one of the proposals on the table in Houston, according to news site Houston CultureMap.
| 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.
