Treasury Issues Final Opportunity Zone Regs
Just in time for an extra tax break before 2019 ends, the U.S. Treasury has issued final regulations regarding how investors can use the Opportunity Zone tax break created in late 2017.
Bloomberg reports that the rules lay out a more flexible timeline for contributing money to Opportunity Funds and gives funds more time to invest that capital.
If investors put money into a Qualified Opportunity Fund before the end of 2019, they get even more of a discount — they’d be taxed on only 85 percent of their initial investment, whereas starting next year, they would have to pay tax on 90 percent of the money they contribute. (Any new capital gains they receive from these investments are totally tax-free.)
What isn’t in the regulations? Rules that require investors to provide jobs for current residents of Opportunity Zones or build apartments and houses that are affordable to those residents. Read more of Next City’s coverage on Opportunity Zones here.
Push to Delay Legal Weed in Chicago Fails
Chicago’s Black Caucus wanted to delay marijuana sales half a year in Chicago because all companies with licenses to sell legal weed in the city are owned by white men.
Block Club Chicago reports, however, that a full council vote to do so failed 19-29, meaning that Chicagoans will be able to buy marijuana legally starting Jan. 1.
The first wave of licenses in Chicago to sell recreational marijuana went to medical marijuana dispensaries, a decision Gov. J.B. Pritzker has suggested came down to safety. Chicago is expected to issue a second wave of licenses in April, and it’s expected that many “social equity” applicants will be among the recipients of those licenses. Aldermen in the Black Caucus had expressed concern that giving existing firms a head start would disadvantage the newcomers. As a potential compromise, according to Ald. Walter Burnett Jr., the state and the Mayor’s office have agreed to add two minority-owned dispensaries to Chicago prior to the next lottery.
Philadelphia Passes Community Benefits Agreement Law
Philadelphia city council has passed a bill requiring developers to provide amenities in neighborhoods where they build major projects, WHYY reports. Mayor Jim Kenney is expected to sign.
“It ensures the developers of these large projects will actively engage with the community and consider the impact on the area,” Tonnetta Graham, president of the Strawberry Mansion Community Development Corporation, told WHYY.
The legislation is not without its critics, however. Brett Theodos of the Urban Institute called the bill unfinished (“this gives almost no guidance in terms of what they want these people to actually do”) and Akira Rodriguez, a Penn professor, said the bill didn’t have teeth. There are few penalties if a developer ignores the law, only that failure to comply “may result” in the denial of city assistance, financial or otherwise. “For now, this is basically a resolution,” Rodriguez said.
Cincinnati Approves 15 New TIF Districts
A controversial vote in Cincinnati this week created 15 new tax increment finance (TIF) districts in some of the city’s poorer neighborhoods, Cincinnati CityBeat reports.
Many of the TIF skeptics in Cincinnati say the city hasn’t been transparent about how money generated from them is spent. A group of protestors chanted “Audit the TIFs” during the council meeting until Mayor John Cranley asked police to remove them.
According to CityBeat, Laura Hamilton, a resident of West Price Hill (one of the city’s existing TIF districts) told the council, “If you can do nothing else and help the residents of Cincinnati, you can at least vote no… until an audit is performed. You don’t build an addition on your house while it is burning.”
Other critics of TIFs argue that they drain money from public schools. The Cincinnati School Board president called the new districts “a slap in the face” last month.
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