Yard 56, a transformative mixed-used project planned in East Baltimore on a 20-acre industrial site, was the first project in Maryland to receive an investment through the federal Opportunity Zones program. An investment by Prudential Financial Impact Investments will support the development of Phase 1, which will consist of 190,000 square feet, including LA Fitness, Streets Market, retail shops, restaurants and 100,000 square feet of office space.
“Yard 56 is a model example of how of how Opportunity Zones can help spur investment to transform a vacant brownfield site into a mixed-use development that will support the growth of adjacent neighborhoods and anchor institutions,” said Colin Tarbert, president and CEO of the Baltimore Development Corporation, which has a dedicated Opportunity Zone coordinator for the City of Baltimore.
In Prince George’s County, another redevelopment is underway. Urban Atlantic has set up an Opportunity Zone fund with about $20 million in equity to leverage as part of its redevelopment in New Carrollton. The plan calls for 2.6 million square feet of mixed-use transit-oriented redevelopment, including apartments, retail, office space and a hotel. The redevelopment also includes $20 million in infrastructure improvements, a 282-unit multifamily project, and Kaiser Permanente’s 200,000-square-foot administrative regional headquarters, which is nearly complete.
Maryland state officials are confident that Yard 56 and the New Carrollton redevelopment are among the first of many new projects that the state will see under the new program, which is designed to spur economic development and job creation in distressed communities. Maryland has 149 designated zones across the state.
Under the program, which became effective January 1, 2018, investors in projects in Opportunity Zones will receive federal tax incentives over the next 10 years, and areas designated as Opportunity Zones will be able to reap the benefits of new capital investment to help redevelop underserved communities.
But Maryland is taking the federal program a few steps further, and is the first state in the nation to put in place additional incentives and assistance on top of the federal Opportunity Zone benefits.
During the Maryland General Assembly session, Maryland Governor Larry Hogan championed additional incentives tied to the Opportunity Zones program. The legislation, which was crafted with bipartisan support, extends benefits under the Governor’s landmark More Jobs For Marylanders program to the Opportunity Zones.
“We are supercharging investment and making Maryland’s 149 Opportunity Zones the most competitive ones in America,” said Governor Hogan.
Additional benefits include:
- A 10-year tax credit for each new job (minimum of five new jobs) created by a company that locates or expands in a Maryland Opportunity Zone. These companies will also be eligible for an additional $6 million in tax credits, have 100 percent of their state property taxes exempted, and have all business recording, filing, or special fees waived.
- $500,000 for the new “Opportunity Works” Program, which is a job-training program specifically for businesses that are located in Opportunity Zones. Through Opportunity Works, the Maryland Department of Labor will issue competitive grants for qualified businesses to provide workforce training programs that result in a credential or identifiable skill, or job readiness and skill training.
In addition, there are several funding sources available through the state’s Department of Housing and Community Development to support projects in Opportunity Zones, including:
- $17.5 million in affordable housing tax credits;
- $10 million for small business lending through the Department’s Neighborhood BusinessWorks program; and
- $3.5 million for the statewide Strategic Demolition Fund to support site acquisition and demolition of derelict buildings and redevelopment to spur economic and community revitalization.
The Maryland Department of Commerce also launched the Opportunity Zone Enhancement Program with two levels of enhanced incentives within certain existing Commerce tax incentive programs. The benefits are for qualified Opportunity Zone projects that choose to disclose information about Opportunity Zone investments and enact a community benefits agreement.
In an effort to bring Maryland communities together to learn more about the potential of Opportunity Zones, Governor Hogan also created a Maryland Opportunity Zone Leadership Task Force chaired by Lt. Governor Boyd Rutherford. The task force has been traveling around the state hosting regional summits, and will develop a State Opportunity Plan to align Opportunity Zone goals with state economic and cultural priorities.
“Working with our local jurisdictions and stakeholders is critical to the success of our Opportunity Zones,” said Lt. Governor Rutherford. “This is not a ‘one-size-fits-all’ approach. Every Opportunity Zone and community has different needs, different assets and existing resources, and different goals. Therefore, we need to ensure that the projects in our Opportunity Zones meet the long-term goals and planning of each jurisdiction and community.”
The state has also set up the Maryland Opportunity Zone Information Exchange, which is an online resource designed to attract capital to projects and businesses and is the first comprehensive, interactive resource of its kind in the nation. It features more than 100 projects/businesses that represent $10-12 billion of investment throughout Maryland for the next 10-15 years. Open to the public, the exchange serves as a virtual meeting place for investors, fund managers, property developers, new or expanding businesses, and local stakeholders.
Visit http://www.expansionsolutionsmagazine.com/maryland_ed for local economic development office directory listings.
