Poor NYC neighborhoods a big lure for investors

New York City may be on the cusp of a new multibillion-dollaꦯr investment boom.

A gold mine of prospective opportunities is slowly luring capital into some of the city’s poorest neighborhoods. It’s because of a new law promising substantial tax breaks for rich investors in these communities, and p🐷otential upside for the local residents: thousands of new, well-paid jobs and improved infrasꦍtructure.

“Without 🦹a doubt, my guess is that there are billions of dollars of investments that could be made in New York,” said investor 🍒Jim White, chief executive of Scottsdale, Arizona-based PHT Opportunity Fund. White just opened an office in Greenwich, Connecticut, to supervise his foray into this market. “There is so much opportunity waiting to be tapped,” he said.

White is among a growing troop of financial magnates eyeing investments in some 8,700 federally designated “opportunity zones” nationwide. These zones are the backbone𓆏 🌊of bipartisan legislation, and part of President Trump’s 2017 tax overhaul.

New York City’s 306 🍷opportunity zones are, like most, a sprawling amalgam of mainly economically distressed commun🐻ities as identified in census tracts of the five boroughs.

Starting in April, White’s company will allocate $250 million of new investmen♔ts in areas including New York. He says his self-funded $50 million in opportunity zones has already seen double-digit returns. And the new round of money could be assigned to anything from housing and studen♛t accommodation to manufacturing centers and tech hubs.

“We are very excited about New York,” said White, who is the author of the book “Opportunity Invesཧting: How to Revitalize U💃rban and Rural Communities with Opportunity Funds,” due out in April.

The appeal for🍎 investors is that they can roll their capital gains — realized from the soaring stock market, or the sale of a home, business or other asset — into a fund that invests in an opportunity zone.

There is a 10% tax incentive on the original investment when their taxes are paid in 2026, the deferment date, and any gains ⛄on the investment, if it is held for 10 years, are tax-free.

There was a tsunami of new𒆙 investment money at the end of last year, after which time the tax deferral incentive amount was reduced to the current 10% from 15%.

Opportunity zone funds had raised $6.7 ♒billion by January,ꦏ according to Novogradac Opportunity Funds Listing.

“We got a nice big rush of capital in December,” said Brian Phillips, a serial entrepreneur who runs the New York-based Pearl Fund that invests in opportunity zones nationwide. And he anticipa🤪tes another flood of money as he carefully assesses his investments for a slew of projects at the Brooklyn Navy Yard, a designated zone.

“We see lots of potential,” said Phillips, surveying the once-abandoned 300-acre waterfront Navy Yard for investments. “There are already 400 companies here🅷 now, and I think that could double or triple in the next two to three years — and it is one of the largest and most prolific opportunity zones in the US.”

From wealth managers to major banks, opportunity zone investing is attracting attention — and more money. Chris Christie, former governor of New Jersey, has reportedly raised money for opportunity zone investments such as༒ a self-storage center i༒n Connecticut.

But opportunity zone investing took some earಌly criticism from doubters, who described it as a vehicle for the wealthy with no trickle-down for poor communities, as money was diverted into luxury and vanity projects. “Many of the early investors were opportunistic,” White said. “The program has moved on from that to serve its purpose.”

Phillips ꦏsaid the program could help narrow economic inequality.

“There is a big gap between the wealthy and the poor in America, which is why the opportunity zone program was created,” he added. “There’s a lot of capital gains tied up — and this is a way to incentivize people to sell their assets and put the gains to work in communities, and help revive our country.𓂃”