Investing in Opportunity Zones

Award-winning business executive Brenda Ross-Dulan spent 24 years at Wells Fargo working in real estate lending and community development before becoming an executive vice president. Now a principal of The Ross Dulan Group, Brenda Ross-Dulan is raising $100 million to invest in opportunity zones across the country.

The Tax Cuts and Jobs Act of 2017 introduced many transformative changes. One of them was the creation of qualified opportunity zones. These areas are designated by the federal government as part of a stimulus program to incentivize investment in communities across the country.

Opportunity zones are geographic areas nominated by state governors as low-income tracts and certified as such by the U.S. Department of the Treasury. Ordinarily, families in these areas have a median income below 80 percent of surrounding areas and average poverty rates are 20 percent or higher.

Under the stimulus program, investors can pool resources and invest in these low-income areas, creating jobs and spurring economic growth. Investments are made into partnership interests, businesses, and properties (both commercial and residential). In return, investors receive preferential tax treatment on capital gains.

Today, there are 8,700 opportunity zones in the United States in both rural and urban areas. Opportunities for revitalization abound. These communities host 479 airports, 379 colleges, over 600 renewable energy installations, and 15 battery plants. The zones host 1.6 million businesses serving a population of 35 million people. By investing in these communities, investors put their money to work, benefit populations in low-income areas, and reap tax benefits.

Los Angeles Urban League’s Biz Camp Develops Young Entrepreneurs

As the chief executive officer of the Ross Dulan Group in New Jersey, Brenda Ross-Dulan consults with corporate leaders to help them enhance their professional skills. Until 2017 a California-based banker, Brenda Ross-Dulan served as a director of the Los Angeles Urban League (LAUL).

Founded in 1921 and shortly thereafter merged with the National Urban League, LAUL has worked since the 1960s to improve educational and employment opportunities for Los Angeles’ inner-city residents. The agency sponsors summer training in entrepreneurial thinking for students age 13 to 18 in a program known as Biz Camp.

Together with American Airlines and the Network for Teaching Entrepreneurship, Biz Camp helps students research unmet needs in their neighborhoods. They then devise a business plan to meet those needs.

Meeting on weekdays from 9 a.m. to 4 p.m., Biz Campers visit local businesses, talk with community leaders, learn to ask tough questions, and make public speeches. The plans they develop often lead to actual sales of products or services.

The event culminates in a cash award for the best plan that will enable the winner to build his or her own business.

Investments in OZs to Benefit Millions in Low-Income Areas

A banking executive for more than 25 years, Brenda Ross-Dulan focuses on investment strategies that result in both profitable and transformative outcomes in underserved communities. A principal at The Ross Dulan Group, Brenda Ross-Dulan raises capital for private investments in opportunity zones (OZs).

Opportunity zones were established by the Tax Cuts Jobs Act (TCJA) to spur investment in traditionally underserved regions across the country. By definition, they are economically-depressed areas in suburban, rural, or even industrial regions with low median incomes and significant poverty rates. State governors designate OZs in their area and receive certification from the Treasury Secretary. So far, all 50 states of the United States have designated opportunity zones.

TCJA provides tax incentives for investors who invest capital gains in these communities. Through qualified opportunity zone funds, investors can pool funds together, invest directly into these communities through real estate or equity investments in businesses, and then realize tax benefits over the period of their investments. Through delay and ultimately reduction of tax liabilities, investors stand to increase annualized returns by up to 40 percent.

As at December 2017, up to $6.1 trillion in capital gains were sitting in stocks, mutual funds, and corporations, according to the Economic Innovation Group. Investors who want to cash in these gains but pay lower taxes can invest in qualified opportunity zone funds, benefiting underserved communities and uplifting the lives of the 30 million people who live in OZs.