A series of regional meetings will be held this spring around the state to push opportunity zone investment as millions in private dollars are poised to flow.
That was the message on Tuesday at a legislative briefing before the Senate Budget and Taxation Committee in Annapolis on the new federal program that aims to help distressed communities redevelop with the help of private funds.
The 45-minute briefing was held as the state's 149 opportunity zones are preparing an aggressive push to attract the funds that can also be used to invest in businesses as well as real estate projects. The overall OZ program is still being rolled out by the U.S. Department of the Treasury — a process delayed by the recent government shutdown.
Kenneth C. Holt, secretary of the Maryland Department of Housing and Community Development, told the Senate committee a 16-member OZ task force is scheduled to hold its first meeting on Feb. 20. That will be followed by four regional summits in Western, Southern, Central Maryland and the Eastern Shore.
Local jurisdictions in those areas will be prodded and encouraged to seek out the OZ funding. Holt said there have been 25 potential investment funds identified by state and local officials for opportunity zone projects.
The first OZ funds in Maryland were awarded Jan. 11 to the Yard 56 project in southeast Baltimore by the Prudential Financial Impact Investments. Holt told the Senate panel it totaled $15 million.
The project is in its first phase of a 2.2-million-square-foot redevelopment of the former Pemco site across from Johns Hopkins Bayview Medical Center.
Holt said there were dozens of other high-profile projects around the state that could be future OZ sites. An interactive website has been created by state economic development officials and with an incentive tracker.
"We want to make it so a specific investor can drill down and make contact with the local areas," Holt said.
The only set of federal guidelines released so far show that investment in OZ funds by private sources will yield generous federal capital gains tax breaks. The tax breaks will be more lucrative if the funds remain invested for up to a decade, and the OZ program is only designed to be in effect for 10 years.
"The clock is ticking and it’s very important that these projects have their plans dialed up so the investment flow can meet all federal guidelines," Holt told the committee.
Gov. Larry Hogan unveiled $56.5 million in several state and federal incentives last month to help attract private investment to the state's zones. The incentives can be layered on top of the OZ capital gains breaks and include state property tax breaks, Enterprise Zone incentives and workforce development and job training incentives.
The OZ program was created by Congress at the end of 2017 as part of the federal tax reform package.