“Opportunity Zones” — everybody seems to be talking about it these days.
If you’ve been wondering what this investment tool is all about, you’ve come to the right place.
What are Opportunity Zones? Created by the 2017 Tax Cuts and Jobs Act, Opportunity Zones are an important economic development tool that allows investors to receive tax relief when they put money into qualified projects in certain designated, economically distressed areas.
OZs are designed to stimulate business investment and spur economic development in areas they need the most by encouraging long-term benefits. The benefits of these investments — which are into property or into businesses in the zones — are supercharged by the favorable tax treatment of capital gains.
Small businesses that are already sitting in those zones may be thinking about how they can leverage this opportunity for badly needed capital. Other small businesses looking to expand may be considering these zones for their investment. They aren’t alone.
“It is very clear this is working so far. We have seen a huge uptick in investment in these zones,” said Grey Dodge, founder of Madison Street Strategies and an economic development consultant. Still, he said whatever side of the table you are sitting at, especially as a small business seeking the financing, that you understand OZs and that you seek out the right partner. This is an equity investment, not debt.
There are 427 designated Opportunity Zones in Florida, including 670 in Miami-Dade and 28 in the City of Miami. Together, the OZs in Florida represent 1.9 million residents, a million jobs and 83,000 businesses, many of them small businesses.
This week, the Florida SBDC at FIU, in partnership with Madison Street Strategies, hosted an Opportunity Zone virtual workshop to help aspiring and existing business owners and investors learn how to leverage and benefit from this new investment program. Madison Street Strategies has been giving these around the state.
Expert panelists and presenters took a deep dive into what Opportunity Zones are, including the tax benefits, eligibility requirements, legal considerations, accounting consideration, available resources, and more. The 3-hour program also included looks at several OZs in south Miami-Dade and Monroe. It’s among a whole series of webinars Florida SBDC at FIU has been hosting this year as a resource to small businesses.
You can also find a lot of information at opportunityzones.gov