Flachsbart’s nonprofit—which has board members from the state’s largest utility and its biggest bank, Regions Financial Corp.—is now in talks for 10 potential projects that need more than $100 million in equity investment, he said. None have been funded yet, but he’s certain some will be. Meanwhile, he keeps driving.

Baltimore Billionaire
One of the arguments over opportunity zones is whether the U.S. is handing wealthy investors and companies big breaks on projects they would’ve done anyway. One example: Hedge fund executive and former White House spokesman Anthony Scaramucci plans to build a “swank, boutique hotel” in Oakland. The paperwork for the permit was filed months before the neighborhood was designated an opportunity zone.

But that project pales in comparison to what’s happening in Baltimore. More than a year before President Donald Trump signed the law, real estate developer Steven Siegel helped negotiate one of the largest public financing deals of its kind for a client, a company owned by billionaire Kevin Plank, founder of athletic-wear maker Under Armour Inc.

In 2016, Baltimore’s city council approved a $660 million financing package for a 235-acre mixed-use development, including new offices for Under Armour, along the city’s waterfront. The area was already designated as an enterprise zone and a brownfield site, connoting additional lucrative tax breaks, and the project attracted a $233 million investment from Goldman Sachs’s urban investment group.

Then came the opportunity zone designation.


The tax break is only supposed to apply to real estate purchased after the law took effect. But lawyers across the country quickly began working around that to get the benefits for projects planned before the law was passed. Many tax experts have recommended sales to new entities. So long as the seller owns no more than 20 percent of the buyer, the transaction counts as arm’s-length and qualifies.

Siegel said his firm, Weller Development, has found enough new investors to comply with the arm’s-length requirement. The company has seen so much demand, he said, that he’s looking to replicate the project elsewhere.

“We’ve been fielding a lot of inbound interest,” Siegel said, declining to name cities that have approached him. “That stimulated us to take this show on the road.”

Boulder Balks
In mid-December, during a marathon city council meeting that stretched past midnight, Boulder became perhaps the first jurisdiction in the country to reject its own opportunity zone. Officials in the Colorado town imposed an 18-month moratorium on almost all development in its only census tract earmarked for the incentives.

The move highlights how local officials have the power to respond to criticisms of the law—in this case, that investors may rush to build projects the community doesn’t want. Boulder has long been a favorite spot for growing companies because people want to live there, thanks to its college-town vibe and quick access to nature.