Editor’s Note: This story was originally reported for our content partner, GlobeSt.com.
NEW BRUNSWICK, NJ—(SBN)—Developers waiting to learn about tax treatment of Opportunity Zone investments in New Jersey may get some answers on Monday when Gov. Phil Murphy is expected to join US Sen. Cory Booker on stage at an Opportunity Zones conference being sponsored by the Rutgers Center for Real Estate at the Hyatt Regency hotel here, according to Ted Zangari, chair of the real estate practice at Sills Cummis & Gross, a commercial law firm with New Jersey offices in Newark and Princeton.
News of Gov. Murphy’s decision to participate in the panel just came to Zangari Wednesday afternoon, he says.
“If the state of New Jersey does not match the federal tax exemption then understand that investors can invest anywhere in America,” says Zangari. “Not doing so would put New Jersey at a disadvantage to those states that are going to get equal state treatment to the federal tax stream. It would be a missed opportunity. I understand the state has some wicked budget debt issues to deal with right now particularly on the pension side, but we need to be able to find a way somewhere to afford, as a state, giving equal state tax treatment to this federal program lest we be at a disadvantage to the other states.”
AUDIO PODCAST: You can listen to a podcast of our complete conversation with Ted Zangari in the audio player below. If a player is not visible, you can click here to listen to the podcast.
Zangari is optimistic that Gov. Murphy will be sympathetic to a favorable resolution of the tax treatment question.
“One of the pluses of this particular governor is that he comes out of an investment banking firm,” Zangari says. “So, unlike many office holders, he is extremely conversant and comfortable with concepts such as these.”
In addition to the conversation between Sen. Booker, Gov. Murphy, and Morris Davis, the Paul V. Profeta Chair of Real Estate at Rutgers University, Zangari will moderate a panel of experts during the conference that includes Leslie Anderson, president and CEO, New Jersey Redevelopment Authority; Ron Beit, CEO and founding partner of RBH Group and RBH Management; Christopher Coes, vice president of land use & development, Smart Growth America; Jason Grove, chief policy advisor, City of Newark, NJ; Jaime Reichardt, chair of the state & local (salt) practice and co-chair of the Opportunity Zones practice at Sills Cummis & Gross; Anthony Rinaldi, founder and managing principal, Saxum Real Estate; Marcelo Salas, vice president, NES Financial; Lindsay Sparacino, CFA, managing director, portfolio management, EJF Capital, Arlington, VA; and Sherry Wang, managing director and senior investing lead, Goldman Sachs Urban Investing Group.
Zangari says investors need to start identifying appreciated assets quickly so that they can engage in Opportunity Zone transactions before the end of 2019 to gain the maximum tax advantages.
“This program will work,” he says, “if investors start taking a hard look at appreciated assets and figuring out which of those appreciated assets they’d like to unload sometime before 2026, and ideally sometime between now and the end of 2019, in order to get a 15 percent tax cut instead of the 10 percent or no tax cut later on.”