say what works and what doesn’t. Some strategies and some loca- tions are no doubt riskier than others. But, which ones? The best parallel is likely our experience with Superfund sites. Long written off as impossible to develop, it turns out that some of the nation’s 4,000 Superfund and Formerly Used Defense Sites (FUDS) have enormous potential. As an example, Camp Leach was a 660-acre parcel where the govern- ment tested chemical weapons, bombs and incendiary munitions. Toxic gases from the site once drifted over nearby homes and “slightly gassed” a US senator and his family. Today the property includes much of Spring Valley, a neighborhood just a few miles from the White House and one of the most-exclusive residential areas in Washington, DC. So far, more than 400 once-
Third, Opportunity Zone invest- ments are certain to benefit from expansive and positive media coverage, especially if local job counts increase. Fourth, Opportunity Zone census tracts, like Superfund sites, are often strategically located in the heart of major metro areas. Long Island City, in the borough of Queens and just one subway stop from mid-town Manhattan, is one of the two areas initially selected by Amazon to develop a massive HQ2 property with some 25,000 jobs. Where Amazon wanted to build is also a designated Oppor- tunity Zone. Unfortunately, in this particular case, the Amazon deal fell through. Still, the location will no doubt attract other investors.
spurned Superfund and FUDS sites have been returned to commercial use with more in the pipeline. The elements which made the federal environmental program successful apply to Opportunity Zones. First, there is real government money in the O-zone effort. The Joint Committee on Taxation estimates that between 2018 and 2027 federal revenues will decline by $1.6 billion annually because of Opportunity Zone write-offs. This is effectively money “spent” on the program. Second, there is a political consensus which supports Oppor- tunity Zones. Senators Scott and Booker are from different political parties, yet they have come to- gether for this effort. What politi- cian is going to oppose new money going into local areas? The O-zone concept is certain to develop a following that will seek to continue – if not expand – the program.
OPPORTUNITY ZONE RISKS Money is the magic ingredient
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