Campaign 2020 & the Future of OZs - Special Webcast Discussion September 17, 2020 - Cal OZ
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Campaign 2020 &
the Future of OZs
Special Webcast Discussion
September 17, 2020
Welcome & Introductions
Welcome and Introductions
Kunal Merchant
President and Co-Founder, CalOZ
• Oversees nonprofit trade organization dedicated to supporting quality
opportunity zone investments in California
• Managing Director, Lotus Advisory
• Advised over $8 billion in public-private partnerships nationwide
• Former NBA executive, Mayor’s Chief of Staff, and social entrepreneur
• BA and MBA, Harvard University
www.caloz.org
Welcome and Introductions
Alex Bhathal
Managing Partner, RevOZ Capital
• Leading Opportunity Zone Fund and early adopter in OZ real estate investing
• 2019 Globe Street OZ Investor of the Year
• Co-owner of Sacramento Kings
• Board Member, Gen Next and Young Presidents Organization.
• BA University of California Los Angeles, MBA University of Southern California.
www.caloz.org
Today’s Speakers
KUNAL ALEX STEPHANIE BRETT STEVE
MERCHANT BHATHAL RAWLINGS-BLAKE THEODOS GLICKMAN
President Founder CEO Senior Fellow Founder & CEO
CalOZ RevOZ Capital SRB & Associates Urban Institute Develop Advisors
www.caloz.org
Agenda
• Welcome and Introductions
• Current State of Play: OZ Politics and Policy
• Panel Discussion
• Audience Q&A
• Closing Thoughts and Adjourn
www.caloz.org
Audience Questions
• Write into chat box
• Send email to csmith@caloz.org
www.caloz.org
Current State of Play: OZ Politics & Policy
State of the Race: Presidential Race
CURRENT TRENDS
• Biden widely seen as current frontrunner
• Estimated 74% - 83% probability of victory
POPULAR VOTE
• Current projection: 52% Biden – 46% Trump
• 96% chance Biden wins popular vote
ELECTORAL COLLEGE
• Trump better positioned vs. popular vote
• Key states: PA, FL, WI, MN, AZ, NV, NH, MI, NC
KNOWN UNKNOWNS
• Presidential debates • COVID-19
• Mail-in ballots • Voter suppression
• Oct & Nov surprises • Economic trends
• Foreign interference • Legal & legitimacy challenges
Sources: RealClearPolitics, FiveThirtyEight, ABC News, The Economist.
www.caloz.org
State of the Race: Congress and Governors
HOUSE SENATE GOVERNORS
Dem GOP Ind. Dem GOP Ind. Dem GOP Ind.
Current Seats 233 201 1 Current Seats 45 53 2 Current Seats 24 26 -
Projected 240 195 0 Projected 49 49 2 Projected 23 27 -
Net Change +7 -6 -1 Net Change +4 -4 - Net Change -1 +1 -
Source: Election Projection.
www.caloz.orgTrump Administration: OZ Platform
• President Trump placed significant emphasis on opportunity zones during
his 2020 State of the Union and the recent Republican National Convention
• August 2020 Council of Economic Advisers report suggests that opportunity
zones would continue to play a key role in the Administration’s agenda
• Recent Trump Administration executive orders to encourage the location of
federal facilities in qualified opportunity zones
“Over the next four years, we will make America into the Manufacturing Superpower of the World. We will expand Opportunity Zones,
bring home our medical supply chains, and we will end our reliance on China once and for all.”
- President Donald Trump, RNC Acceptance Speech, August 27, 2020.
www.caloz.orgBiden Campaign: OZ Platform
• Critical of focus on high-return OZ projects “like luxury apartments” versus
investments in affordable housing and local entrepreneurs
• “Build Back Better” agenda references potential opportunity zone policy
reforms in its Racial Equity platform:
o Incentivizing Opportunity Funds to partner with non-profit or community-oriented
organizations to jointly produce community-benefit plans for each investment
POTENTIAL OZ ADVOCATES IN A BIDEN
ADMINISTRATION o Directing the Department of Treasury to better ensure tax benefits accrue to
• Jared Bernstein projects with clear economic, social, and environmental benefits to a community
Former Economic Adviser to V.P. Biden
• Austan Goolsbee, o Introducing detailed reporting and public disclosure on their opportunity zone
Former CEA Chairman and Biden adviser investments and the impact on local residents, including poverty status, housing
• Ron Klain affordability, and job creation
Former Biden Chief of Staff
Source: JoeBiden.com.
www.caloz.orgOZ Comments on the Campaign Trail
Both parties are referencing opportunity zones, with Republican comments more inclined towards praise
and Democratic comments inclined towards reform.
“[Our priority to support Black Businesses is] not only access
“Opportunity Zones are breathing new life into local
to capital through…the SBA - and putting money into
economies and building up main streets across the Centennial
opportunity zones is one part of it - but also [unlocking] $150B
State.”
in new capital”
– Sen. Cory Gardner (R-CO)
– Vice Presidential Candidate Kamala Harris (D)
“For opportunity zones to deliver on their promise,
“Opportunity Zones are making a real difference in Georgia
communities must proactively guide investment to where it is
and across the country.”
needed and productive.”
– Sen. David Perdue* (R-GA)
–Former Presidential Candidate Pete Buttigieg (D)
“[OZs] are a promising tool for driving investment in Iowa’s
“…[job factories] won’t get hijacked by a few financial gamers
distressed communities, and I’ve seen the success of them in
the way that federal opportunity zones have been.”
our state.”
–Michael Bloomberg (D)
– Sen. Joni Ernst (R-IA)
Sources: MSNBC, OpportunityDb, The Daily Sentinel, Twitter.
www.caloz.orgKey Federal OZ Policy Issues
• Key OZ policy issues
– Reporting requirements
– Program extension beyond 2026
– Phasing out “low need” zones
– Expanding list of excluded project types
– Increasing funding for local capacity-building
– Certification
• Other tax policy changes
– Capital gains tax rates
– 1031 exchange program
– Broader tax policy
• Two pathways: administrative and legislative
www.caloz.orgMost Likely 2021 Scenarios - Federal Level
UNIFORM DEM
STATUS QUO DIVIDED GOVT I DIVIDED GOVT II
CONTROL
President Trump Trump Biden Biden
Senate Majority Republican Democratic Republican Democratic
House Majority Democratic Democratic Democratic Democratic
Predicted policy & • Incremental changes to • Modest changes to OZ • Modest changes to OZ • Major changes to tax
political implications OZ policy, primarily via policy policy policy
executive action
• Presidential veto likely to
• Potential rebranding of • Modest changes to OZ
prevent a major overhaul existing opportunity policy
of OZ or tax policy
zones concept
• Phasing out of
controversial zones and
project types
www.caloz.orgGroup Discussion
Audience Q&A
Closing Thoughts
Participant Survey
www.caloz.org/survey
www.caloz.orgPlease vote
www.vote.org
www.caloz.orgContact Information
Kunal Merchant Steve Glickman
Alex Bhathal
Founder & CEO, Develop Advisors
President, CalOZ Founder, RevOZ Capital
e: steve@developadvisors.com
e: kmerchant@caloz.org e: alex@revozcapital.com
w: www.developadvisors.com
w: www.caloz.org w: www.revozcapital.com
Twitter: @DevelopAdvisors
Twitter: @CaliforniaOZ
Stephanie Rawlings- Blake Brett Theodos
CEO, SRB & Associates Senior Fellow, Urban Institute
e: srb@srbandassociates.com e: BTheodos@urban.org
w: www.srbandassociates.com w: www.urban.org
Twitter: @MayorSRB Twitter: @urbaninstitute
www.caloz.orgThank you for joining us!
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