WASHINGTON – A real estate investment firm run by the son of the president Donald Trump Jared Kushner, lawmaker and adviser, puts a lot of money on the government's opportunity zone tax breaks, but is not interested in channeling his investors to the poorest and most run-down areas that the program seeks to revitalize.

Cadre of New York Kushner, in which Kushner still holds at least a $ 25 million passive stake, has made it clear to potential investors in recent marketing materials that they are not planning, due to their "unfavorable growth prospects" in most of these To search areas for development businesses. [19659008] Instead, Cadre says it will target and a "small subgroup" of zones in cities like Los Angeles, Seattle and Miami, where the population and income will already rise faster than the national average.

Cadre is a well-known example of how early investors are interested in. The program seems to focus on the places that need it least: zones that have qualified for tax relief, even though significant investments have already been made or undergo an obvious gentrification.

Examples of such zones include a strip of the Upper East Side of Manhattan. This includes the upper part of the Fifth Avenue Museum Mile, where three-bedroom apartments overlooking Central Park sell for $ 4 million. Another is the Ledroit Park in the US capital, which is mainly located in the Curbed-dominated real estate blog of Washington's "most gentrified" zip code (19659008) is located.

Another opportunity zone includes part of The Willows district in Menlo Park, California (less than 2) miles from Stanford's campus, where the tech boom has brought home prices to $ 1,500 per square foot, ten times as much as the national average. The Amazon Opportunity Zone, which has its headquarters in New York City, Queens, had a median household income of more than $ 130,000.

"It's hard to imagine why we should subsidize this," said Brett Theodos, a researcher whose Urban Institute analysis found that nearly a third of the country's more than 8,700 opportunity zones are showing signs of high levels of investment. "These investors are not bad people, they are responding to the incentives."

This is the main criticism of the Investing in Opportunity Act, which was passed by law in December last year as part of the Republican-sponsored tax reform. Hosted by Trump in a White House last week, it potentially offers developers millions of dollars in investment income tax credits to invest in zones selected by states based on factors such as high poverty and low income.

The average poverty rate of 32 percent in the zones covers a wide range of areas – and allows for "contiguous" areas that do not have low incomes but are close to distressed districts to qualify.

Cadre said in a statement to The Associated Press that the investment-focused neighborhoods may be growth-oriented but still have a low median income and are "low in capital".

"At the end of the day, the opportunity zone tax benefits only come into effect if we succeed in the communities we invest in," the statement says.

There is no indication that The White House's White House spokesman told the AP last week that states are choosing zones, and the Ministry of Finance, which confirmed the final list of zones, declined Commenting on the presence of gentrified areas in the program.

For some funds, the obvious gentrification of some zones was an explicit selling point, a much safer thing than putting money in heavily distressed areas.

Anthony Scaramucci, hedge fund manager , who was previously the communications director of the White House for Trump, is trying to raise up to $ 3 billion for opportunity zone projects In a marketing appeal last week, he has launched both a warehouse project in Savannah, Georgia, and a "chic" hotel project in Oakland, California.

"For those of you who still need to go to this part of the bay Area, I can tell you that this is a comprehensive development," said Scaramucci.

Fundrise, another Opportunity Zone fund, seeking to raise $ 500 million for investments, targets many of the same areas as Cadre and rates its top ten "Opportunity Zone Investment Objectives" as the fastest-growing housing costs.

One measure of how much the zones overlap with the developers' already existing interests is the overlap with their current holdings. An AP overview of Kushner's holdings revealed that he holds interests in 13 opportunity-zone properties, all in locations that the Urban Institute believes show signs of rapid change or complete gentrification.

An AP investigation revealed that Kushner and his wife, Ivanka Trump, both helped push for the program, and as a couple they can benefit financially. Although Kushner has relinquished all leadership in Cadre, ethics watchdogs say it is a conflict that results from their decision to become presidential advisors without parting from their large investments.

Marcy Hart, a property tax lawyer in Philadelphia who advised clients in the Opportunity Zone program, says she has not seen many signs that the program is diverting investments to places it was previously unable to.

"There are some projects that are likely to be online because they are in opportunity zones," she said. "But my clients have already invested in these areas."

Even some of the program's strongest advocates have acknowledged that not all opportunity zones are equally in need. Parker himself said at a gala at the Kemp Foundation, honored last month in honor of Sean Parker, a San Francisco venture capitalist who helped create the Opportunity Zone, that the zones have some "low-hanging fruit" – Contain quarters in which investments already exist.

The program's incentives, however, are large enough, he said, after the obvious opportunities have been exhausted, investors will eventually focus on needy areas.

"There will be a lot of capital in opportunity funds, and that will be there to find a place," he said.

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