How OZ Funds Are Adhering to Policy Intent, with Greg Genovese and Steve Sego

Source: OpportunityDb

By: Jimmy Atkinson
Posted: December 11th, 2019

Are Qualified Opportunity Funds living up to the spirit and intent of the Opportunity Zone initiative? And how should social impact reporting be conducted?

Greg Genovese is president of Sound West Realty Capital, a real estate development group based in the Seattle area. Steve Sego is president of the Waterman Group, a community redevelopment, investment, and mitigation company.


Episode Highlights

  • The degree to which Qualified Opportunity Fund capital raising has been successful in 2019.
  • How Opportunity Zones experienced “the best of times and worst of times” in 2019.
  • A brief history of the Opportunity Zone legislative, regulatory, and capital raising process.
  • The two Opportunity Zone trends that Greg has noticed this year: 1) The shift from blind-pool Qualified Opportunity Funds to project-specific funds — and the advantages of the latter; and 2) the investing public becoming more comfortable going forward given the amount of guidance we now have from the IRS — resulting in a strong increase in equity raising in the latter half of the year.
  • Why QOFs should conduct a social impact report and receive a tax opinion on their projects.
  • The spirit and intent of the Opportunity Zones initiative, and whether funds are adhering to it.
  • The accolades that the Sound West OZ Fund has received thus far, and how the Sound West platform is adhering to the spirit and intent of the initiative.
  • The importance of establishing a public private partnership with the community.
  • How the state of Washington requested input from tribes and counties when selecting their Opportunity Zone designations.
  • The goals of a social impact report, and the three steps of reporting: 1) establishing baseline data; 2) ongoing monitoring during predefined phases; and 3) a final report.
  • How not all Opportunity Zones are created equal, and the importance of remembering that the economics of the deal must make sense for 10+ years. Social impact is not enough.
  • How the OZ sausage was made, and why there’s been a two-year delay between legislation and regulation.
  • How taking the time to get into the right Opportunity Zone investment is much more important than rushing into an Opportunity Zone deal by the year-end deadline on December 31, 2019 to achieve the full 15% basis step-up.