New York abolishes federal opportunity zones land grab program

 

NY Daily News

 This is one opportunity New York won’t miss.

The state budget passed by lawmakers last week includes a provision decoupling the city and state tax codes from the federal Opportunity Zones program, a Trump-era policy that opponents say is nothing more than a handout to wealthy real estate investors.

Part of the Republican-led 2017 federal tax overhaul, the program was aimed at incentivizing private investment in economically distressed areas.

Critics, however, derided the designations, saying they included many areas already suffering from over-development and gentrification.

“The opportunity zone program is a scandalous giveaway to wealthy developers who didn’t need the money to do the development, and I’m glad the state pulled ourselves out of wasting state dollars for this effort,” said Sen. Michael Gianaris (D-Queens), who first introduced a measure to end the tax breaks on the state side in 2019.

Under the federal program, developers who put money into an opportunity zone project could defer federal and state capital gains taxes for up to seven years with a modest cut in the taxes owed.

Additionally, they would not face any capital gains taxes on properties within the zones as long as they don’t sell it for at least 10 years. When New York decided to conform to the federal program, it meant capital gains deferred or excluded from taxation at the federal level were similarly deferred or excluded from state and local taxes.

New York designated 514 “low-income community” census tracts as Opportunity Zones. However, the program allowed investors in projects in neighboring tracts to also benefit from the tax breaks, regardless of how wealthy or developed the areas were.

Parts of Hell’s Kitchen on Manhattan’s West Side were included in the program, as was a stretch of the Upper East Side and already-gentrifying areas of Queens from Astoria and Long Island City to Flushing.

President Trump's Opportunity Zones program are just opportunities for him, his advisor Jared Kushner, real estate developers and oligarchs to take advantage of

 

New York Times

 President Trump has portrayed America’s cities as wastelands, ravaged by crime and homelessness, infested by rats.

But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans.

Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.
Former Gov. Chris Christie of New Jersey; Richard LeFrak, a New York real estate titan who is close to the president; Anthony Scaramucci, a former White House aide who recently had a falling out with 

Mr. Trump; and the family of Jared Kushner, Mr. Trump’s son-in-law and senior adviser, all are looking to profit from what is shaping up to be a once-in-a-generation bonanza for elite investors.

The stated goal of the tax benefit — tucked into the Republicans’ 2017 tax-cut legislation — was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs.

The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones. Any profits from those projects can avoid federal taxes altogether.

“Opportunity zones, hottest thing going, providing massive new incentives for investment and job creation in distressed communities,” Mr. Trump declared at a recent rally in Cincinnati.
Instead, billions of untaxed investment profits are beginning to pour into high-end apartment buildings and hotels, storage facilities that employ only a handful of workers, and student housing in bustling college towns, among other projects.

Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods.

Yeah, this has been done before, Hudson Yards, Pacific Park, that stupid mall in Staten Island, but that was through insider chicanery and machinating. This is now the law of the land that was once made for you and me.

Gianaris finds exploitative faults with President Trump's "Opportunity Zones" real estate investment program

NY Daily News

State Sen. Michael Gianaris’ war on Amazon has led the Queens lawmaker to target tax incentives tied to the Trump administration and meant to spark investment in poorer neighborhoods.

Gianaris, whose Queens district includes the Long Island City blocks being eyed for the company’s proposed new outpost, announced legislation on Wednesday that would eliminate state tax breaks for capital gains when investing in federal Qualified Opportunity Zones.

“What was intended to benefit investment in economically distressed areas is now being used to boost investment in very wealthy area,” Gianaris said. “It’s completely bastardized the intent of the program and turned it on its head.”

 The area around the waterfront site is one of 306 census tracts in the city that Gov. Cuomo recommended as “opportunity zones.” The Treasury Department signed off on the designations late last year.

The company is already in line for $2.8 billion in grants and tax breaks from New York state and the city. Lawmakers and labor leaders argue the company is not doing enough to earn the incentives.

Gianaris and other critics also contend separately that the Trump administration program provides deep tax cuts to companies investing in already gentrifying areas.

 Meanwhile, a poll, conducted by HarrisX on behalf of Amazon, found 69% of New Yorkers approve of the internet retailer coming to the city, with 19% opposed.