The Highlight Zone
By Caleb Harshberger – Staff Writer, Triangle Business Journal
Jan 15, 2021, 6:54am EST
In 2017, CityPlat principal Vincenzo Verdino learned of a new program just implemented by the federal government to encourage investment and development in underutilized properties around the country, and he wanted in.
The program established certain census tracts as Opportunity Zones and allowed investors to put capital gains into properties in underserved areas with serious tax benefits.
“When the legislation was first announced, people heard this is one of the greatest tax benefits in our lifetime and the thought was it’d be similar to the 1031, where it’d be easy for passive investors to take advantage of it,” Verdino said. “That’s not the case at all. It’s really designed for developers. It’s all about how much developers are incentivized or interested.”
He and his partners at CityPlat quickly began looking to see if they had any properties in the Opportunity Zones and what, if any, benefit that could bring. They soon found three they were already working on and determined this was a program they were interested in pursuing.
“None of those did we end up moving forward with as an Opportunity Zones project, but it opened that doorway and as a result we saw how much benefit can come from doing an Opportunity Zones project,” Verdino said. “So from that point on we were actively searching for a project in the Opportunity Zones.”
They began making offers on properties that qualified under the program – until they found the first one that stuck.
And CityPlat wasn’t the only one rushing into the space. The boutique development and real estate firm, then based in Cary, joined a growing host of investors and developers interested in making the most of the new program.
Soon, millions of dollars began pouring into the zones.
“There was a mad rush in the beginning to buy,” said Moss Withers, president and principal at Lee & Associates Raleigh-Durham. “There were literally millions of dollars being raised to invest in Opportunity Zones.”