Since they were announced in the 2017 Federal Tax Reform Package, Philadelphia’s business community has embraced Opportunity Zones (OZs), especially with the city’s modest population growth. GBCA President Benjamin Connors was recently quoted in a post by Capital Analytics Associates.
OZs are a mechanism through which developers can defer tax payments through reinvestment of capital gains, for a maximum tax burden reduction of 15%, among other benefits. The program was designed to incentivize development in slower-growth regions. Philadelphia is now home to 82 OZs and the private sector has wasted no time tapping into them.
[A]s OZs attract buzz, some have suggested the initiative may fall short of expectations without the right participation.
However, for Ben Connors, President of the General Building Contractors Association (GBCA), there is no downside to the program. “Opportunity Zones are going to have either a positive impact or a minimal impact. They are certainly not negative,” he said. “These zones stand to be another tool to extend economic development. Some of the Opportunity Zones that have been selected in this region are prime for development, assuming that the funds are prepared to take advantage. What is unknown is the scale.”