Bass, Berry & Sims attorney Robert Guth provided the Nashville Business Journal with insight on the impending impact of opportunity zones on Nashville development in the publication’s special report on the new tax incentive.
Opportunity Zones are gaining momentum. While much of 2018 was occupied with zone selection, draft rule writing and education about this new community development tool, investors, local officials and businesses have begun engaging with the incentive. As opportunity zones start heating up, Robert provided answers to some pressing questions, including where are opportunities the strongest, will this be positive for affected communities, are there any concerns to consider and what is the long-term prediction of the use and impact of opportunity zones in Nashville.
While Robert anticipates savvy investors to focus on speculative investments in underdeveloped communities and new businesses, he adds that there’s no guarantee that investment in these communities guarantees or even incentivizes any direct benefit to those living there. The impact on these communities will depend largely on decisions made by the investors. Of potential concern is that the extraordinary tax benefits of opportunity zones are only available to the wealthiest of investors, which could cause an escalation of real estate prices in these communities as investors compete.
In the long-term, Robert anticipates there will be substantial benefit for early investors and communities, but the resulting rise in real estate prices could offset the benefits while also pricing out investors who come along later in the game.
The full article, “Great Expectations: Opportunity Zones Q&A” was published by the Nashville Business Journal in the June 14, 2019, special report on this new tax incentive.