Opportunity Zones

Identifying and securing funding is arguably the single biggest challenge for most brownfield projects.  There is no one source of funding that will take a project from the planning stage, through assessment and cleanup, and finally to redevelopment.  Brownfield project resources are typically cobbled together from many sources such as EPA, HUD, USDOT, state brownfield programs, municipalities, as well as private entities.  These resources have been bolstered by Qualified Opportunity Zones (QOZ) which were created by the federal 2017 Tax Cuts and Jobs Act and designed to spur economic development and job creation by drawing private investment to distressed communities that might otherwise have difficulty attracting investments.  There are over 8,760 opportunity zones across the nation.  These zones consist of low-income census tracts which have been nominated by each of the 50 states, the District of Columbia, and U.S. territories, and comprise economically distressed areas where new investments may be eligible for preferential tax treatment as well as the resulting investments, according to the U.S. Treasury.  In simple terms, investors can defer tax on eligible capital gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged or until December 31, 2026.

Opportunity Zones can be a valuable resource for the cleanup and redevelopment of brownfield sites and can assist communities in achieving sustainable and equitable redevelopment goals.  However, many communities are not familiar with OZs and their benefits, and need assistance in making the connection between their brownfield redevelopment goals and available QOFs.  Many resources exist to assist New Jersey communities in this endeavor, and the following represent a number that will provide a solid foundation to those interested in pursuing brownfields cleanup and redevelopment: