Baltimore’s Yard 56 project will receive the Prudential Financial impact investment group’s first Opportunity Zone investment, according to developer MCB Real Estate.

MCB Real Estate did not disclose the dollar amount of the investment. But the mixed-use Yard 56 project is expected to cost $150 million at full build-out. The first phase of development, which Prudential Financial is investing in, projects to cost $77 million.

“MCB has been at this project for a really long time, so we are really humbled by Prudential’s willingness to step up and be part of major change here in Baltimore. By providing crucial capital, and bringing their expertise of catalytic urban redevelopment, they continue to help create inclusive economic growth in a major urban city,” P. David Bramble, managing partner of MCB, said in a statement on the investment.

Created as part of the federal Tax Cuts and Jobs Act of 2017, Opportunity Zones encourage investors to reinvest gains in a designated census tract by deferring taxes until 2026. The top incentive offered is for investments, required to be made through a qualified Opportunity Zone Fund, and held for a decade. After 10 years the lender avoids paying capital gains taxes altogether on appreciation stemming from the initial investment.

Gov. Larry Hogan recently said his administration will push the Maryland General Assembly to pass the so-called “More Opportunities for Marylanders Act of 2019.” The legislative package provides a variety of state incentives for investments in Maryland’s 149 Opportunity Zones with the intent to “supercharge” investment in the districts.

Generally, Opportunity Zones are expected to be a magnet for businesses and real estate development. But there’s concern the benefits of the program for rural and deeply struggling urban communities may be oversold. Some believe areas that already are attracting significant development have received designations. As a result, those zones will pull a limited pool of investment dollars from communities with more need of financial backing.

The timeline for realizing the zones’ maximum incentive, because of a 2028 sunset on district designations, means jurisdictions must secure investments in 2019 for investors to receive the maximum benefits. Increasing the pressure, according to tax attorneys, is an expected large pool of investors with capital gains from 2018. Those investors must reinvest profits in a Qualified Opportunity Zone Fund within 180 days of receiving profits exceeding $250,000 from the sale of investments, including real estate, bonds, and stocks.

MCB Real Estate also revealed it will be working with one of Prudential’s longtime partners, YouthBuild. The firm’s general contractor will partner with the organization’s CivicWorks arm to provide internship and experience to unemployed young Baltimore residents who are out of school. The goal of the initiative is to provide skills that will lead to long-term employment.

Plans for Yard 56, on Eastern Avenue in East Baltimore, included 2.2 million square feet space in total. The development’s first phase calls for 80,000 square feet of retail, anchored by Streets Market and Café, that’s already 80 percent leased. L.A. Fitness was the project’s first announced retail tenant.

Earlier this week Yard 56 announced it had signed four new tenants leasing roughly 10,000 square feet of space. Those retailers include The Brass Tap Craft Beer Bar, full-service day spa Top Coat, Chipotle Mexican Grille, and Panda Express.

Eventually the project will include 150,000 square feet of retail; 100,000 square feet of office space; 300 residential homes; and a 150-room hotel. MCB Real Estate intends to build the project in two phases with construction on the residential and hospitality buildings slated to begin in 2021.

The site at 5601 Eastern Ave., across from Johns Hopkins Bayview Medical Center, was home to Porcelain and Enamel Manufacturing Company, also known as PEMCO. The company manufactured porcelain products, such as the signature orange roofing tiles for Howard Johnson Hotels, at the 20-acre site.

When MCB Real Estate took control of the property it was primarily known for its dilapidated condition, environmental contamination and penchant for catching on fire. During a groundbreaking ceremony in May 2018, Bramble joked about the site’s past history of fires and how little those blazes affected the property’s aesthetics.

“This is the only property we own that looks the same before and after a fire,” Bramble said.