This story first ran in City Limits here.
Here’s an excerpt:
In November 2018, Marlene Cintron, the Bronx’s head of economic development, stood up in front of a crowd of mostly developers and lawyers, as they sipped pitorro at the Port Morris Distillery. She was there to champion a federal tax break that promised to revitalize the borough.
“We have always been the most ignored,” Cintron said to her audience. “These opportunity zones are here for you to take advantage of them.”
This time last year, anticipation for the Trump tax policy was high in the Bronx, one of the poorest districts in the nation. The tax incentive, introduced in the Tax Cuts and Jobs Act of 2017, allows investors who fund business ventures or develop real estate in a designated low-income census tract called an opportunity zone to defer capital gains taxes on profits earned elsewhere and, in some cases, completely eliminate them on the new investment.
The Bronx has 74 of these zones. And brokers predicted that the kind of investments the tax incentive could attract would create an entirely new borough. But a year later, Cintron has all but soured on the program.
“It didn’t happen,” she says now.
The fervor around opportunity zones in the Bronx has shrunk from a clap to a whisper. In 2018, several high profile developers, including Brookfield Properties, Somerset Partners and Starwood Capital, set out to raise millions in their own respective Qualified Opportunity Zone Funds to invest in the Bronx. But if they invested that money in 2019, they did it quietly.
The end of last year marked a major deadline for the program. Those who invested funds into a project by 2019, wouldn’t be taxed at all for their capital gains on that investment if they waited until 2029 to sell. But the New Year came and went, and there are only two known development projects fully or partially funded by opportunity zone capital in the Bronx.
Enthusiasm around the federal program has fizzled, perhaps because of a lingering stigma against the Bronx, a shortage of available property, or treasury guidelines that are vague and uncertain.
“It’s not something a lot of people talk about,” Cintron said. “It’s not a sexy subject for anybody because it’s not necessarily working.”
The Bronx’s development isn’t slowing down, as investment continues to grow, but Cintron and several brokers all said the same thing: the investment hasn’t been accelerated by opportunity zones. The Bronx’s biggest projects were set in motion long before the federal program started.