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New Jersey Opportunity Zone Marketplace Connects Investors

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October 28, 2019
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To Facilitate Investment in the Program, NJ Recently Launched a New Opportunity Zone Marketplace Online Portal

New Jersey recently launched a new website aimed at connecting investors with business investment, real estate, and community improvement projects in the state’s designated Opportunity Zones. The Opportunity Zone Marketplace is one of several tools aimed at facilitating Opportunity Zone investments that the New Jersey Economic Development Authority (NJEDA) is advancing in partnership with the New Jersey Redevelopment Authority (NJRA) and New Jersey Department of Community Affairs (DCA).

New Jersey Opportunity Zone Marketplace Connects Investors

“Attracting investment to areas that have long been overlooked is a critical component of Gov. Murphy’s plan for a stronger and fairer New Jersey economy,” said Tim Sullivan, the CEO of the EDA. “The New Jersey Opportunity Zone Marketplace will connect investors from all over the world with growing New Jersey businesses and redevelopment projects in parts of the state that have suffered from disinvestment.

Opportunity Zone Program

As discussed in greater detail in prior articles, the Opportunity Zone Program offers significant tax benefits to a wide range of investors. Established under the U.S. Tax Cut and Jobs Act of 2017, the tax-incentive program aims to encourage investors to direct capital into new projects in certain low-income rural and urban communities in exchange for federal capital gains tax advantages. In New Jersey, 169 census tracts in 75 municipalities have been designated as Opportunity Zones.

The Opportunity Zone Program provides three distinct tax benefits with respect to capital gains. They include:

  • Reinvested capital gains are deferred from taxation until exit from a Qualified Opportunity Fund or December 31, 2026, whichever comes first.
  • The original capital gains reinvested in Qualified Opportunity Fund investments held for the long term receive a reduction in capital gains tax liability, discounted by 10 percent at the 5-year mark and by an additional 5 percent at the 7-year mark.
  • Any new gains from Qualified Opportunity Fund investments held for at least 10 years are permanently excluded from the capital gains tax. These Fund investments can be held through as late as 2047 without losing tax benefits.

New Jersey Opportunity Zone Marketplace

The New Jersey Opportunity Zone Marketplace is an online portal designed to help users find Opportunity Zone funders, businesses, projects, and investment opportunities. It includes a “Project Marketplace” featuring business and real estate project opportunities, which are searchable by place, type, size, and source. Municipalities in the state’s Opportunity Zones will also be able to post business and real estate projects at no charge.

The NJ Opportunity Zone Marketplace also features a “Network” designed to facilitate connections between investors, developers, local leaders, project sponsors, business and property owners, and service providers. There is a Statewide Network, as well as Local Networks in every city, county, township and borough.

Additional Opportunity Zone Resources

New Jersey also recently launched the Impact Measurement research initiative. The long-term analysis of Opportunity Zone communities in New Jersey will be focused on measuring the progress of the program, as well as the impact of Opportunity Zone investments on community development activity, business growth and other key economic indicators. 

The DCA also launched an improved Community Asset Map, formerly known as the Opportunity Zone Navigator, earlier this year. The interactive mapping tool contains relevant economic, housing and demographic information for each municipality. It is intended to allow investors, developers and other businesses to get a better understanding of the characteristics and amenities within New Jersey communities, and identify the best locations and opportunities for specific kinds of business and development. 

The NJEDA also recently launched an Opportunity Zone Challenge program, which plans to award a total of up to $500,000, structured as individual grants of up to $100,000 each, to select municipal/county governments or municipal partnerships. Local governments must designate strategic partners with whom they will be conducting their Opportunity Zone strategic planning efforts and demonstrate through their applications how their proposed strategic plans will catalyze the building of investment capacity in their Opportunity Zone(s) and help communities to realize their goals for Opportunity Zone investments.

Next Steps for Entities Interested in the Opportunity Zone Program

As highlighted above, New Jersey is dedicating significant resources to its Opportunity Zone Program. Because the tax benefits are time-sensitive, individuals and businesses who are interested in participating in the Opportunity Zone must act quickly. 

Of course, thorough planning is still required. Structuring investment vehicles to qualify for the Opportunity Zone Program takes an experienced legal and accounting team who is up to date on the growing field of regulations and can help you navigate them successfully. With a multi-disciplinary team of affordable housing, real estate, tax and corporate attorneys, Scarinci Hollenbeck is uniquely qualified to help New Jersey investors navigate the new program and realize its benefits. To discuss potential opportunities for your business, we encourage you to contact us today.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Stephanie Edelstein, Jeffrey Cassin, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.