Rural Opportunity Zone Community Revitalization, with Colorado Outdoors

David Dragoo and John Renfrow
David Dragoo (left) and John Renfrow (right)

What does an opportunity zone city revitalization project really look like? And how can public-private partnerships help to accelerate a community’s renewal? The Colorado Outdoors project in Montrose County offers an excellent case study to answer these questions.

Home to 20,000 people, Montrose is a rural community located in an opportunity zone on Colorado’s western slope. Although it has struggled since the economic downturn of the last decade, Montrose is one of the better up-and-coming communities in its region; and because it is located within 2 hours of every major outdoor activity you can possible imagine, it is truly an outdoor mecca.

Led by real estate developers David Dragoo and John Renfrow, the 164-acre Colorado Outdoors project is a mixed-use development that aims to transform Montrose and provide a positive social impact for the community.

Click the play button below to hear my discussion of the project with David and John.

Episode Highlights

  • How this article in Forbes magazine put Montrose, Colorado on the map nationally, and led to accelerated opportunity zone investment interest in western Colorado.
  • The business case for investing in Montrose, Colorado (beyond the OZ tax incentive).
  • Why there’s so much OZ money on the table, to the point where there may not be enough projects to fulfill the amount of funding available.
  • How the city of Montrose is spending money to attract quality businesses, and why Montrose is a great case study for the value of public-private partnerships in opportunity zones.
  • Colorado’s opportunity zones nominating strategy of focusing on rural areas as opposed to metro areas — to allow for capital to be put into rural communities to help highlight Colorado’s natural beauty.
  • The importance of partnering with investors who have the same vision for the project as the developers.
  • The positive social impact that the Colorado Outdoors project is bringing to the Montrose community.
  • The biggest misconceptions and points of confusion about opportunity zones that John and David have encountered so far, and the key issues that they are still seeking clarity on from the IRS.

Colorado Outdoors Project Map

Featured on This Episode

Industry Spotlight: Colorado Outdoors

Colorado Outdoors

Partners Doug Dragoo and John Renfrow are on a mission to transform Montrose into a compelling destination for business with Colorado Outdoors, a 164-acre community revitalization project. The master plan comprises 670,000 square feet of mixed-use development, plus infrastructure improvements, river restoration, and 41 acres of public open space — all located in an opportunity zone within Montrose County, Colorado. The project has received final plat approval and is shovel-ready.

Learn More About Colorado Outdoors

About the Opportunity Zones Podcast

Hosted by founder Jimmy Atkinson, the Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.


Show Transcript

Jimmy: Welcome to the “Opportunity Zones Podcast.” I’m your host Jimmy Atkinson. And today I’m joined by two real estate professionals based in Western Colorado. David Dragoo is principal of Colorado Outdoors, a commercial real estate developer with a mission to transform Montrose, Colorado into a compelling destination for business. And John Renfro is owner of Renfro Realty, a family-owned commercial real estate brokerage based in Montrose, Colorado. David, John, thanks for taking the time to speak with me today. And welcome to the show.

David: Thanks, Jimmy.

Jimmy: Good to have you guys here. So David, I’ll start with you. Can you tell me about the project you’re working on and how you teamed up with John? This was in the works before the opportunities on legislation was even passed, is that correct?

David: It was. Yes. And so, so, our project is 164-acre mixed-use development in Montrose. And it’s primarily based on the northern end of town. It started in 2016 as a need. We needed to move our business. We have a business in town that employs about 50 people. And we didn’t have anywhere to go. So we found this piece of property. And then when we realized the opportunity that was there, we ended up purchasing more property to the north and south, eventually bringing it all together into what is now the Colorado Outdoors Project.

Jimmy: Very good. And can you tell my listeners who may not be very familiar with Western Colorado, where exactly does Montrose lie? What is it like? And by the way, for my listeners out there, I’ll have a map of the area on our show notes page for this episode. You can find those at But David, back to you, if you can tell us a little bit more about Montrose, Colorado and where it is exactly?

David: Sure. So, Montrose lies right about in between Grand Junction, Colorado… It’s south of Grand Junction, about an hour and north of Telluride, Colorado about an hour. It’s located in a high desert climate. We have roughly about 20,000 people. And we’re within two hours of probably every world-class outdoor activity that you could possibly imagine. So, it’s an outdoor mecca and probably one of the better communities, up and coming communities, certainly in our state and in the region.

Jimmy: And your project specifically within Montrose, where exactly is it located? It’s on the Uncompahgre River, I believe?

David: Yeah. So we have a main river flowing through town called the Uncompahgre River. And our project is based on the northern end of town and adjacent right to that river or just a couple miles from our airport and right off the main highway. Highway 550 it’s called.


Jimmy: Very good. So, you guys were written up in a big “Forbes” article that was written last July. I believe it was actually one of the first big write ups about The Opportunity Zones initiative. And Montrose, Colorado is one of the areas that just happened to be highlighted in this article. What’s been the response to that since that article went live? The Opportunity Zones incentive, it’s quite a unique opportunity. What’s the interest level been? Who are you hearing from primarily?

David: That’s a good question. When we started, a lot of the interest on the project was regional. And if we want to make Montrose a better community, we have to attract good businesses, good paying jobs for the poor families, and try to restore and enhance the property and the river. After the “Forbes” article came out, it really put Montrose on the map from a national standpoint. We really felt like at that moment, folks were looking at it a lot differently. You know, we started getting calls and interest from everywhere. And so, I think it’s sort of accelerated interest in Opportunity Zones certainly, and Western Colorado primarily.

Jimmy: Good. So, actually let’s back up here for a minute. A question for both of you. Can you quickly tell me a little bit more about yourselves, your background, your previous experience, and how you came to work on this project?

David: Sure. So, my background, I have two companies. One of them is an outdoor products company. As I said in the beginning, we employ about 50 people. We’re headquartered in Montrose. And we make fly-fishing equipment. So we sell all over the world. Our two brands are ABEL, A-B-E-L, and Ross Reels. They’re, like, the Ferrari and the Cadillac of our industry. And then my second company is a Colorado Outdoors. And that project is primarily the one that I described in the beginning. And t’s job is essentially to make Montrose a better area. And we’re doing that by enhancing and restoring the river and trying to attract businesses to the community.

Jimmy: And John, how about yourself?

John: So, my background’s a little bit unique. My background is mechanical engineering. But I’m from Montrose, Colorado. So I’ve done a lot of other stuff very different than real estate. But I decided to come back home and work with my father. So, I’ have been doing commercial real estate here in Montrose for the last 15 years. I was blessed in order to have the Dragoos and Ross Reels come into town. And we were able to put together a pretty dramatic vision between not only the Ross and Abel Fly Reel Company, but also the city of Montrose to kind of really change the community. It’s taken quite a long time. Jimmy, it has taken about three years for all of this fruition to come together. But it’s been well worth the time and energy.

Jimmy: Yeah, about three years. And now The Opportunity Zones Initiative is trying to accelerate that a little bit, I would imagine. Is that right?

John: Yeah. It was actually really cool because this was already in works prior to The Opportunities Zones really formally coming out. So it was just an extra bonus on top of what was already being done. So it added additional gas to the project, for sure, with regards to exposure and excitement.

Jimmy: Good. John, can you tell me about Colorado’s Western Slope and Montrose in particular? You mentioned or one of you mentioned that this is already an up and coming area in the region. Is this area economically distressed? I suppose it must have been at one time recently, at least. But, well, can you just paint me a picture of the area? What does it look like now> And how do you intend to transform it over the coming years?

John: Well, the way I categorize our area, Jimmy, is that Montrose has been struggling ever since the economic downturn. Montrose is a bedroom community for a ski area, which is just outside about an hour, an hour and 30 minutes for Telluride. Telluride, obviously, is a very renowned, very well-known, ski resort, nationally and internationally. But they don’t have the employee base, service base, product stuff in order to kind of support that particular area. So Montrose becomes the support hub for that community. And that comes into not only the stuff I described, but also for transportation. The airport for that particular ski resort comes through Montrose. So, it was an easy, you know, type of thing when they were doing the Opportunities Zones stuff, we were distressed that now that they’ve gone through with the Opportunities Zones stuff to kind of allow for additional growth to happen on that area, if that makes sense.

Jimmy: It does. It does. Absolutely. Can you tell me a little bit about.. John, when we spoke on the phone a couple of weeks back, we started talking about Colorado strategy of developing these Opportunity Zones. And for our listeners, in case you’re unaware, each state’s governor was afforded the opportunity to nominate the Opportunity Zones within each state. And Colorado took a different strategy than a lot of other states in the country in that they designated a large portion of their opportunity zones are located in rural areas of the country as opposed to more metro or urban areas of the state. Let me just go through some numbers here really quick. An an Urban Institute Study, California has 95% of their Opportunity Zones located within metro areas. Arizona has 90%, Utah, 76%, Texas 70%. You know, those are some of the other big western states. Colorado has only 56% of their Opportunity Zones designated within metro areas. And so a lot of them are rural. Can you talk to me about Colorado’s strategy of designating so many rural areas as Opportunity Zones? And how has that paid off so far?

John: Well, it was a very unique concept. There was a lady by the name of Stephanie Cook who went with the state of Colorado that I think really helped to kind of set Colorado apart here or at least very differently. Their strategy was to focus more on rural areas rather than on metro areas in order to kind of go through and allow those additional funds to be put into rural communities. That, henceforth, allowed more opportunity, more ground, more projects, to allow to be encompassed for that rather than smaller areas inside of, you know, downtown metro cities. So, when you look at a Montrose County, I bet you probably a third to almost a half of the entire county is in an opportunity zones. Delta County to the north, probably half of that is in an opportunity zone. And that’s very similar for a lot of the different locations throughout Colorado. They wanted to focus on the rural aspects rather than the metro in order to highlight a very significant difference nationally. And I think that there is a strategy with that, Jimmy, because there’s so much beauty in Colorado. I mean, two-thirds of Western Colorado is public ground. So that’s going to add an additional enhancement to that community and our state.

Jimmy: That’s good. Now, are there any challenges that, that poses to you? I guess, John, if you have a lot of these small rural projects, I think maybe you’re having trouble appealing to large institutional investors. I think…are you…what types of calls are you getting? And what type of money are your callers looking to invest in your projects? And are you able to absorb the amount of funding that they want to send your way?

John: Well, that’s a really interesting question, Jimmy, because what happened is after the “Forbes” article came through. We had a lot of people highlighting or wanted information on the Opportunity Zone, what that was. Inside of that particular article, you know, it highlighted, you know, New York City. And then it highlighted California. And then it highlighted a rural area, Montrose, Colorado. And when that came through, it just allowed for a lot more people to kind of go off and make that happen. The problem was because we’re in a smaller area, we don’t have the sales volume or the price points in order to kind of go help these particular people. Some of these fund managers and other stuff like that are at such a high level that we just don’t have that larger project. So when you have people calling in, you know, they have to be re-calibrated that they’re in Montrose, Colorado instead of a New York or a Californian. So, if somebody calls in and says, “You know, send me all your listings over $50 million,” I don’t have any listings over $50 million. You know, you could probably get all of Montrose County for what’s out there.

Henceforth, that’s one of the reasons why the Colorado Outdoors Project I think really kind of highlights that because it’s potentially into that particular category with that. But we did have a problem with that, Jimmy, early on just because, one, we had so many different calls that were coming through, there was a lot of misinformation that was out there. But Montrose is just not a metro city. We’re rural. And so, we don’t have the sales dollars in order to kind of compel some of those individuals to come into the Montrose area, at least today.

Jimmy: So, John, what are you doing about that? As a commercial real estate developer, are you trying to work with other communities in the state and trying to bundle together some of these smaller rural projects so you can begin to attract larger investors?

John: Yeah. So, I reached out to a group called Rocky Mountain Commercial Brokers, which is the leading commercial brokers through, you know, Central and Western Colorado,Jimmy. And I solicited to them to get projects. I think the major issue that I see with the Opportunities Zone is that be a lot of money that’s going to be on the table, Jimmy, the shortages. I don’t think there’s going to be enough projects in order to fulfill the Opportunities Zones funding that’s out there. So, I did go off and solicit to a lot of those other people just to give them heads up and say, “Hey, we got to get ready for, you know, fund managers, people inquiring Opportunities Zones stuff, in order to put in additional, you know, perspectives to those investors so that they’re ready going through.” Now, if we’re able to go off and bundle those or not, I have no idea. One of the problems that we’re running into, Jimmy, is that we don’t have the funding has not been figured out from the IRS on what should be done, what should not be done. So there’s a lot of confusion that’s happening out there. So no one’s not 100 percent sure how to position themselves.

Jimmy: Right. We’re still waiting for the IRS to finalize their regulations around this issue. And we’re hoping that happens pretty soon here, within the next few weeks or so.

John: Well, I’m hoping it’s going to be finalized after the first year. And once that gets finalized after the first year, that would clean up a lot of the communication. And we can all speak at the same level. My personal opinion is, I think there’s going to be a couple of different, you know, levels coming down with that. But I think the final should be after the first year. And then everybody should hopefully know what we’re doing and how we’re doing it.

Jimmy: Right. Yeah. That would be helpful. So, John, we discussed that “Forbes” article a little earlier. How did it come about that Montrose was highlighted by the author of that article?

John: That’s a really interesting question. I actually talked to Steven Bertoni [SP] at “Forbes.” And during the conversation, he said he was looking for something in the East Coast that was big and something on the West Coast. I think California. And he just needs something rural and in the middle of middle of the state. And he picked out Montrose, Colorado kind of out of a hat. But, you know, I asked him why. And he ended up staying in Telluride about two years ago and just absolutely loved it, so much so that when he had the opportunity to write the article, he decided to put Montrose in. And when he did that, I said, “Steven, when you come through Montrose, I owe you a steak dinner. And I want to thank you so much just for highlighting our community out of everywhere in the country with that.” I hope I’ve had some conversations with Steven that he is going to be doing a follow-up article here in the next two to three years to see how The Opportunity Zone funds are working in rural communities with that. So, I want that to kind of see if we can get that to happen. It’d be really cool, if you could do a follow-up article and there was this success in our community. So I think it’s a really, you know, one, a neat story on how he got Montrose picked. And then, two, hopefully the follow-up story would be even a better success.

Jimmy: Wow. Yeah. That’s a really interesting little story there about how that all came about. I agree. I would love for “Forbes” to go back at some point and see what’s going on in your community in a few years. And who knows? Maybe I’ll have you back on the podcast here in a couple of years. And you can tell me about what’s going on over there in Montrose. And what a windfall for your community to get featured in “Forbes” like that, the amount of interest that you guys have received since then. That is really cool.

John: Yes, I agree. It was really cool.

Jimmy: David, let me turn to you for a minute here. I want to hear your thoughts. And John may have already touched on this a little bit. But give me the business case for Montrose. Why are you bullish on it? And basically, what is the business case here? If I’m a potential investor beyond just the Opportunity Zones, tax incentive, why do I want to invest in Montrose, Colorado?

David: That’s a great question. Montrose has a very progressive business environment. The City of Montrose and ourselves are a great case study for the value of public-private partnerships and specifically recruitment of quality businesses that they’re trying to attract. States around the country, cities around the country, communities around the country, are extremely competitive when it comes to attracting and retaining businesses. Montrose has a extremely aggressive and compelling city council for business incentives. And that, in turn, is giving Montrose a significant amount of upside. The other thing that they’re doing in our community is last year the city built, actually finished, and opened about a $30 million community recreation center. That’s significant because it’s one of the best ones in the state. And it could be in a Cherry Creek, but it’s in Montrose. And so, it’s spending money to improve itself. And it’s spending money to attract quality businesses. So, those things tell me that they’re doing what they need to do from a community development perspective. And to add onto that, the Montrose airport is the fastest-growing airport by commercial disembarkment in the state for five years in a row. And so, that tells me that they have a vision to grow their city around transportation. And that airport is a significant driver of our growth.

Jimmy: Good. What that tells me is your community of Montrose is definitely on the upswing. It seems like it has a lot of potential. Turning now toward your project, again, how does an investor gain access to your project, if he wants to invest? Are you working with a particular Opportunity Zone fund or do you guys manage the fund yourself?

David: Currently, we manage it ourselves. We’ve had a lot of interest from REITs, venture capitalists, and private individuals on structuring certain components of the project or the whole project. I think we’re all in the same position where we’re waiting for the Treasury to give us some guidance, as I like to call it, to clarify that thousands of questions we have. And in the meantime, we’re all trying to position it to take advantage and structure deals so that when the rules come out, we can start to place dollars accordingly and really effectively. We don’t have a lot of time to do that. And that’s why our project is so unique is because it’s ready to go right now.

Jimmy: It’s ready to go. But you’re still waiting on some clarification from the IRS. Can you discuss one or two of the biggest sticking points that you would like clarification from the IRS?

David: One of the clarifications I have is what specifically…we know that the intent of the law, originally that is, was to increase investment in areas that investment otherwise wouldn’t have gone. But part of that rule specifically says that it was to rehab older buildings. And so our project is the development from the ground up. We don’t have buildings out there yet. We have infrastructure, fiber optic. We have a great river with a river trail that we’re putting in, as we mentioned at the beginning. We’d like to know specifically how it affects developable land. And in regard to that, how does that interact with the structure of the deal? Can we put together a partnership agreement that allows investors to come and go or are all the investors tied up for a 10-year holding period to take advantage of tax? I think there are some questions around structure, you know, that I have specifically. And the intent of the law really, again, was to fix older buildings. And how does it affect newer buildings is a big question.

Jimmy: Right. Okay. So, tell me a little more about your Opportunity Zone fund. I know you’re still waiting on the final IRS regulations before you really start going with raising funds. But the fund, is it specifically invested in just the Colorado Outdoors Project or is there more to it than that? Does it include other projects in the region?

David: So, currently that specific fund is only geared toward our project. Again, it’s 164 acres. It’s roughly $80 million in horizontal infrastructure costs, let alone vertical construction. So, it has the runway to be a fairly significant magnet for investors. And the whole period aligns with a lot of our development period. So, investors like that. They like the fact that we have a business there too. So, we’re on site. And we’re there every day. So, they like the story. They like the community. And so for now, the structure is just our project.

Jimmy: And it’s an $80 million fund.

David: No, that’s just for infrastructure. The whole build-out is about 670,000 square feet of vertical construction. Depending on construction costs, you know, you can run the math at roughly $175 a square foot, vertical construction so, times $670,000.

Jimmy: Do you have a target goal for how much you’re looking to raise for the fund?

David: So, we’re looking to raise just over $200 million for our fund. Roughly $120 million would be for vertical construction. And roughly $80 million would be for infrastructure. And that would be to build out the majority of the project and ideally lease back to tenants.

Jimmy: Got you. So what asset classes are available within your project? You mentioned multifamily, hospitality. Is there mixed use or what property types exactly are you looking to develop?

David: That’s a great question. So over 164 acres, we’ve got about 40 acres of public open space. We’re conserving the river, enhancing the river, bringing a river trail in there. So it really brings a sense of place to the project, not just another project, when you have those type of elements with it. You know, you’re on the river in a mountain community. But as far as product mix, next we have hospitality, we have multifamily, we have town homes, we have commercial, and we have industrial. And all those product mixes are very different. They’re very different asset classes and underwritten all really in their own unique way. And so, as a mixed-use project, we’re able to fit it together over 164 acres because of how we’ve structured our infrastructure and built and laid out our master plan. So, it really fits well. Most of those things can fit well together. I think we’ve done a very good job in the master plan to connect all the pieces.

John: Jimmy, I want to highlight… So one of the things that’s very unique about this particular project is that they really focused a lot on the river. So, you know, it adjoins Uncompaghgre River going through, which the city is going to go through and redo, maintain. They’re going to enhance that river in order to cater to the Ross Reel Fly Fishing Company itself. So, you can buy a Ross Fly Reel and go off and utilize that on the river right after you get done doing the purchase. So, it’s really a unique, you know, opportunity. I think I’ll let David speak. There’s some neat things that have happened as of even yesterday. David, you want to talk about that?

David: Sure. So, to back up a little bit, Jimmy, the idea for our operating business is to create a destination for our manufacturing business. Folks can come in, take a tour, and meet the people that make the product that they purchase. And that’s influential. We get, you know, product evangelists. They go out and they talk to the world about their experience. They enjoy it. And in turn, they love the brand more. So, the idea is to recruit other businesses with our values that make outdoor products that are in manufacturing to go near and around us. As part of that, the river is a unique element that, you know, you can enjoy. I mean, most development projects don’t start from the river and go outward. You know, most projects… And that’s where they end. You know, they end in the river. And we did it the other way around. We started with the river. And, you know, it’s conservation, it’s beauty, and then trying to preserve it and really give it back to the community so they could enjoy it, as well.

Jimmy: That’s great. That’s really cool. That’s really cool how you’re bringing the river into the project so thoroughly. And it definitely works to the advantage of your company and the space that you’re in. I want to talk about positive social impact here for a moment. The social aspect of the Opportunity Zones legislation or the intent, at least, was to create a positive social impact by raising some of these more economically-blighted areas of the country, out of blight, to redirect capital into areas where capital wasn’t previously flowing. But at the same time, there’s no community benefit requirement. Are you guys doing anything to ensure that you’re creating a positive social impact in your community?

John: Yeah, actually, we are. A significant part of this project is it revolves around the local partnerships and what it actually means to the community. Anybody can build buildings. But very few can do it to make their community better, and combine elements that the community needs and wants into a project. So, a good example of this is the 41 acres that we’ve designated public and given back to the community, it’s a $3 million river trail. It’s almost $1 million a mile. You have to build this trail. And most communities wouldn’t do that. You know, most developers wouldn’t do that. And the other thing is that we’ve really measured and lined out the job creation and industry that will come to Montrose. And we’ve really shown the value of finding good quality businesses and attracting them here and showing the region what that means, you know, to our city, what that means to our schools, what that means to our tax base. And that in turn creates sort of an alignment of interest in order to do a project like this.

David: I just want to add onto that, Jimmy. So, the cool thing is that how Colorado Outdoors has really been working with the master plan with the city. So this project was in a blighted area in the town. And they did an overall master plan to incorporate how to revitalize basically one area of the community that was really not seen. It was undervalued. So, taking that planning into account, they took that plan 100%, including the river corridor, grabbed it, and then expanded it. So, that’s changing one whole area of a community that has since then been underutilized. Secondarily, what they did is that the city went through and is now trying to connect those other areas to this area so that there’s a connection between the communities so that the entire community benefits. It’s a really cool and neat vision. It’s nice to see how it’s being implemented when they’re going through.

Jimmy: There you go. That sounds great what you guys are doing there. What’s the timeline on getting the project completed? You’ve started construction already, I believe. But when do you expect construction to be completed?

John: That’s a great question. So, we started construction in October of 2017 on our building. It’s a 41,000 square foot manufacturing facility that will house our operating businesses. And in partnership with the city and actually mostly local contractors, we’ve gotten phase one, which is the central 40 acres of the 160 gap. Again, we have all the roads and utilities, fiber optic internet even installed. And to piggyback on that, the river trail, that construction starts January 2nd. And that project will expand and finish next fall. So, we’re basically in year one of 12 and in earnest for this project. And I think we’ve done a lot in a short time, which is a testament to the community’s willingness to do it.

Jimmy: Absolutely. So, going back to your fund for a minute here, so, you’re targeting a $200 million raise. That’s $80 million of horizontal infrastructure plus an additional $120 million of vertical construction. Who do you expect your capital base to be? And who have you gotten interest from so far? Are you hearing from private wealth management firms or family offices? Who exactly are you hearing from as potential investors? And will there be a minimum investment amount?

John: We’re looking at all the options based on particular funds and how they align with our vision of the master plan. So, that’s kinds of an non-answer in the sense that, we need to make sure that whoever we partner with has the same vision we do for the project. It’s turning it over in a sense to different users for different reasons. You know, some are purely for tax. Others are purely for investment. And this project is nice because it makes economic sense before the Opportunity Zone. After the Opportunity Zone, it accelerates it significantly. And so, each fund has its own needs. Some are just purely a tax play. Others are purely an investment play in a specific asset class. So, REITs, institutional investors, VCs, private funds. they’ve all been looking at it from a different perspective. We’ve all sort of been saying, “Okay, who is the best person to align with to do segments or the whole thing?”

Jimmy: Right. And that topic comes up on almost every episode of this podcast, the point that, you know, does the project make sense from an investment standpoint without the incentive? Those are the best ones you want to look at. If you’re just in it for the tax incentive, you may have your focus in the wrong place.

John: Correct: Yeah. You know, Jimmy, I might add that one of the most significant components of this is what we call our Chinese menu of incentives. And so, federal incentives, of course, Opportunities Zones. Everybody knows that one. At least, they’re getting very, very familiar with it. But the other significant ones are for businesses wanting to move here. And after this project gets built out, what does it mean to the community? We have to make sure that the folks that we recruit and retain are quality businesses. And so, attracting those can be a challenge. But we’ve put together what we feel like is a very compelling menu of incentives. And those can be found on our website. And also, I’ll send you the information on that you can post on your website. But those incentives are significant. For example, if you move a business here, in combination with the city and the state, businesses are eligible for up to $10,000 in cash for every job that they create and maintain for one year.

So in addition to the Opportunity Zone, businesses can move here and get some incentives that make it pencil. And they can monetize the move, in addition to wanting to be a member of the community. There are others, as well, personal property tax exemptions and manufacturing exemptions on equipment, permanent site improvements even. And the city has been willing to contribute to construction costs. That’s been a significant driver for us. And so, I just want to make it clear that the project is unique in that it’s not just a developer doing one thing. It’s a community, a city, and private industry saying, “What do we want to do to make the community better? And what can we offer folks to make it unique?”

Jimmy: Yeah, that’s great. It sounds like Montrose is definitely doing its best to get the best, most desirable businesses in there. What are some of the biggest points of misconception or of confusion that you’re hearing about these Opportunity Zone projects or your fund, especially when you’re fielding those calls from potential investors? I know you guys were or, John, you mentioned earlier that you’ve had some people ask what they could get for $50 million and you respond, “Probably the whole county.” Are there any other misconceptions or confusions that you’re hearing a lot of?

John: Yeah. I mean, I think the misconception is people… I mean, the first misconception that I see is people are trying to take advantage of the Opportunity Zone, you know, this year, 2018. And they’re going to go try to push that through the IRS this year in advance just to go see if that’s going to happen or not. They already have capital gains that they’re going through. And what’s interesting, Jimmy, is that, you know, I just do real estate. And people…I have accountants calling me asking, you know, how their clients can take advantage of an opportunity zone so they don’t have to pay taxes in this calendar year. And so, that’s the type of confusion that we have. We have people that don’t want to pay the tax. But they don’t know all the rules yet. But they’re willing to risk just trying, if that makes sense. And that’s causing a lot of momentum, you know, because people would get excited about that when they’re able to save some additional taxes, Jimmy.

But it also adds a lot of confusion because, you know, I would say a majority of the accountants don’t even know. When the “Forbes” article came out, you know, no one had any idea what was going on. So, I was fielding calls that was more educating, you know, their accountants or hedge fund managers or anything else like that than, you know, real details on what the opportunity fund was or what the Opportunity Zone is and everything else. So that’s one. The second thing is that you have people that are not in the Opportunity Zone that are trying to get in or want to try to apply or redo the math to get into an Opportunity Zone fund or make it an Opportunity Zone fund and, you know, those masters set. Maybe Congress will change that at another time. But there’s a large 12 individuals that missed out on that, that are not part of the opportunity map. And so therefore, you know, they’re saying that, that could harm them for potential people or clients coming into their area.

Jimmy: Right. That’s interesting. The ship has sailed on lobbying for being within an Opportunity Zone. I think you really need to speak with your community leaders and governors’ offices back about a year ago when this legislation was passed. And that was the time to do it, but you’re right. These Opportunity Zones, the map is locked in stone through 2028 now. So, you’re either in an Opportunity Zone or you’re not. And there’s nothing much you can do about it at this point.

John: Yes. The other interesting thing that’s happening is that you have people that are going through and they are putting properties under contract, Jimmy, okay? And they’re trying to figure out how they’re going to time, if they’re going to do a 10, 31 or an Opportunity Zone. And so they’re trying to push their due diligence time out until the rules for the IRS come out so they can say, “Hey, should I do an Opportunity Zone here,” or, “Hey, should I do a 10, 31?” So you have that type of confusion that’s happening today in our market space. And we will see what happens when that comes through. My opinion is that probably a year, year and a half from now, you know, Opportunity Zone at 1031 exchanged language will be interchangeable between the two once, the regulations come out.

Jimmy: Yeah. You maybe right. There are some differences between the two. The 1031, obviously, you don’t get the big benefit until after death. The Opportunity Zone’s program has a little bit more flexibility in that regard, obviously, only a 10-year holding period. But with the Opportunity Zone, you’re locked into certain geographies. So, that’s the downside where the 1031 is a little bit more flexible. But yeah, I hear you. And it’ll be interesting to see what the final regs say.

John: Yeah. So, you have people that are waiting for those regulations to come out, Jimmy. And they don’t want to make a call on how they want to close their property. And so, those regulations come out to the best of their benefits. And so, it will be interesting to see what happens here in the next couple of months for a couple of those deals, just to see what will happen.

Jimmy: Yeah, absolutely. It’ll be very interesting to read those final regs when they get published. David, tell me what’s all involved in getting these real estate projects off the ground? What milestones do you have to hit? And which milestones have you guys hit so far?

David: That’s a good question. I think with any project, it’s the plat process, you know, the entitlement process. It’s are you ready to put a shovel in the ground and execute a strategy? Ours is through the plat process. It was a significant undertaking being close to the river. And for those of your listeners looking at opportunity funds, it’s very important that they find ones that are ready to go, shovel ready, as we say. The Colorado Outdoors Project has been final platted. It’s been entitled. Our infrastructure is in on the central-most sections of the property. And so, funds are chomping at the bit because they know that we have a significant runway and no hurdles administratively to overcome that would hinder the speed at which we need to move for these rules and for development.

Jimmy: Well, we’re getting to the end of our time here today. But I wanted to ask both of you, beyond the Colorado Outdoors Project that we’ve been discussing, do you have plans for future real estate projects and Opportunities Zones throughout the region or throughout the state or throughout the country even?

John: Yeah, we do. If you look at the map, most of the significant amount of the land that are in Opportunity Zones by volume is west of the Mississippi. So, our focus will be the Rocky Mountain Region. Our focus will primarily be Colorado. And we see a lot of opportunity in the next 36 months to take advantage of IRS rules, but also, I think, to help the communities where, you know, John and I both live.

Jimmy: Absolutely. Very good. For our listeners out there, where do they go to learn more about the two of you and about the Colorado Outdoors Project?

John: Great question. So, if you visit, you can learn about our project. You can learn about our business. You can learn a lot about Montrose and the outdoor industry. That’s a good resource for listeners wanting to know more.

Jimmy: Great. So, for my listeners, all of the resources that John and David and I have discussed on this episode are on my show notes page. And you can find that at And I’ll have links to And I’ll have some other resources up there, as well. And I’ll also have a map of the area so you can visualize all of the location that we’re talking about. Well, John and David, it’s been really enjoyable talking to the two of you. You guys have a great product out there on the Western Slope of Colorado. It’s a great story. And I’m honored to help share it. I much appreciate your time today and hope to talk to you both again soon.

David: Thank you very much.

John: Yeah. Thanks for having us. We appreciate it.

Jimmy: Absolutely. Take care, guys.