On November 1, 2023, 150 of the top Opportunity Zone professionals and investors gathered in Washington DC for the Novogradac 2023 Fall Opportunity Zones Summit.

Ashley Tison of OZPros joined Jimmy Atkinson live on-site to recap the event, and discuss some key takeaways on 2023/2024 OZ legislative timing and likelihood, as well as other OZ trends.

Episode Highlights

• Overview of the Novogradac 2023 Fall Opportunity Zones Summit in Washington DC, and why we believe it was the biggest OZ conference that’s taken place in several years.
• Recap of the panel that Ashley spoke on, “Technically Speaking,” and the importance of in-person events like this one to help establish best practices for Qualified Opportunity Fund structuring and operations.
• Technical details regarding the Working Capital Safe Harbor, and what may happen if a QOZB doesn’t follow their WCSH plan to a T.
• Recap of the “Washington Report” panel led by Mike Novogradac, and how and when the Opportunity Zones Improvement, Transparency, and Extension Act may get enacted.
• Preview of Jimmy’s “Hot Topics” panel and OpportunityDb’s proprietary survey data that would be presented to the Novogradac Summit.

Featured On This Episode

• Novogradac 2023 Fall Opportunity Zones Summit
• Novogradac Opportunity Zones Working Group
• When does the continuing resolution expire, and how does it work? (Federal Times)
• Graph: Development of OZ tracts vs. non-OZ tracts
• OpportunityDb proprietary survey data on OZ investor sentiment (OZ NewsHour 3:07 mark)

Guest: Ashley Tison, OZPros

• Ashley Tison on LinkedIn
• OZPros
• OZ Weekly Ascent Opportunity Zone Compliance Program

About The Opportunity Zones Podcast

Hosted by OpportunityDb and WealthChannel founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in Opportunity Zones industry.

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Show Transcript

Jimmy: Welcome to the show. I’m Jimmy Atkinson. I’m coming to you on-site at the Novogradac 2023 Fall Opportunity Zone Summit in Washington, D.C., back where it all started, back where the legislation was first passed. We’re hoping for some extension legislation before long. I’m joined today by the OZ Sherpa himself, Mr. Ashley Tison of OZPros. Ashely, how you doing today?

Ashley: I am fantastic, Jimmy. It is awesome to be here in the birthplace of America, and, like you said, the conception point for all things Opportunity Zone. Awesome to be here in D.C. As you can tell, it’s an unbelievably vibrant conference. It’s awesome to see that there’s this continued interest, you know, now that we’re five years in. We got a 5-year-old on our hands. He’s running around here somewhere. I keep trying to put him on his leash. But it’s awesome to see how this industry has grown over those five years. It’s great to see some familiar faces, and new folks, and to talk about kind of what’s in store.

Jimmy: Yeah, absolutely. There’s over 150 people here today. It’s the biggest Opportunity Zones conference I’ve been to in several years. So, it’s kind of fun to get the band back together, see the industry coming together here like they are today, here in Washington D.C. I did not know that Washington, D.C. was the birthplace of the nation. Might have to do a history check on that one.

Ashley: Well, all right. So, the nation’s capital.

Jimmy: Okay. That’s fair enough. Well, let’s dive into the questions here. You just got off a panel, technically speaking… No, that was actually the name of the panel, was “Technically Speaking.”

Ashley: That’s right.

Jimmy: How’d it go? Give me the 60-second rundown.

Ashley: It was awesome. You know, I love being a part of these conferences and having the opportunity to get on panels, because the brainpower, the collective brainpower of the folks up there on that panel is mind-blowing.

Jimmy: He was not the smartest person on the panel, I don’t think.

Ashley: Oh. No. I might have been the tallest person on the panel, but I was definitely not the smartest person on the panel. And I love that, because it’s an opportunity to be able to bounce ideas off of each other, and to ask questions, and to really dive deep into some of these nuanced regulations and some of the things that are tricky inside of the Opportunity Zone regs. And so, the experts need experts, and the experts need to talk to other experts, because there’s no case law on this. And so we’re literally kind of setting, like, what the practice is going to be, and what best practices are, in these panels and in those conferences amongst the experts. So, it was awesome. We talked about, like, what you do if you gotta downsize an OZ. We talked about, like, if you need to distribute money from a QOZB up to a QOF. We talked about if you need to bring new money in, how you can kind of incentivize that new money. And we talked about some really cool stuff, you know. And it was cool for me, because I’m a technical geek, and this was even deep technical stuff for me. So, but it was awesome. It was great to see the crowd engaged in it, and it was really neat to be able to come out of that with agreements on some of the things that have been percolating out there that are question marks.

Jimmy: Yeah, absolutely. No, it was fun to listen in on it. Some of the stuff went a little bit over my head, got a little bit above my pay grade, but…

Ashley: Mine too. It’s all good.

Jimmy: Exactly. So, but that’s why we bring in the experts. And you’re absolutely right. This is where the industry is forming best practices, is right here, because like you mentioned, there is no case law yet. So, this is where it all happens, and the Novogradac Opportunity Zone Working Group as well, they put together a lot of those best practices on those calls that they do every month, right?

Ashley: So, one of the main best practices that we need everybody out there, for posterity, to know is that you can amend your working capital safe harbor plan. That is unequivocal. Just kidding.

Jimmy: I think that was a firm, “No, you cannot do that, actually,” per the regulations. But anyways, let’s not deviate too much longer. I wanted to zoom…

Ashley: I actually think that it’s really relevant, though, inside of that, is that, technically, under the regs, it says that you can’t. But we know that everybody has to change their plan, and so that’s what we talked about. The practical effect of, that these regs might say one thing, but at the end of the day, there’s gotta be flexibility for fund managers and for business owners to be able to do their thing, and to not have to worry about getting penalized as a result of that. And so, that’s one of the things that we talked about, was, okay, what do you need to do in order to make sure that you’re coming up the safe harbor as much as possible, if you have to take that action?

Jimmy: Technically speaking, you’re not allowed to do it, but practically, the IRS is not likely to come after you if you do need to amend your working safe harbor plan, as long as you have a good reason for doing it. I wanna talk about the very first panel of the day. That was, no offense, to me, that was the most interesting one…

Ashley: I get it.

Jimmy: …the Washington Report, because we did talk about, the panelists talked about, what’s happening here in Washington, D.C., what’s happening with the legislation, and I think the biggest thing I learned that is new is that we’ve… I’ve been talking about, you know, the possibility of getting OZ legislation passed to extend the program, hopefully by year end. And Mike Novogradac made the point this morning on his panel that year-end is really April 30th, for the purpose of the OMB deadline…

Ashley: That’s right.

Jimmy: …which I can link to in the description for today’s podcast. We won’t get into the details, but what did you take away from the Washington Report? What did you find interesting?

Ashley: I thought it was fascinating that, and I really appreciated that there was a representative from Senator Wyden’s office here today. That was awesome. And it was awesome to kind of get, you know, straight from his office, the perspective relative to what’s been a kind of a lot of, I would say, very cynical, kind of, you know, questionnaires and letters that have gone out, and maybe a more cynical approach as it relates to the efficacy of Opportunity Zones, and how inclusive it’s been, and that, you know, I think that there’s some people that would say that it’s a billionaire’s safe haven. And it was good to hear from her that they’re looking for stories. They’re looking for examples of how the, you know, these things have actually been working in order to make communities better. That was also one of the really fascinating things is that graph. So, there was a graph, and you need to make sure that we put that in the show notes too.

Jimmy: I have a picture of it. I’ll try to see if I can get it up there, for sure. Yes.

Ashley: Yeah. And that graph showed what happened in actual Opportunity Zones, all right, versus other low-income census tracts, since the enactment of the legislation. And they, man, they were tracking flat, and then 2017 happens, and Opportunity Zones go hockey stick. Which you will appreciate, being a hockey player.

Jimmy: I’m a big hockey player.

Ashley: Love those hockey sticks, right? And so, I think that that’s relevant, because we’re able to have conversations with folks that have concerns, rightful concerns, about the efficacy of the program, and really show them that this thing really works, and man, we need to not only extend it, but we need to make it better, we need to make it more expansive. One of the other kind of things that, in the “QOF-y Talk” panel, was Jason Watkins, asking about, okay, what would you do for Opportunity Zone 2.0? And the first, the biggest answer was, make it eligible for non-capital gains. I think that that would be awesome.

Jimmy: That would open up a ton of capital, and that’s one of the most common questions that I get. Probably one of the most common questions you get also. “Hey, I don’t have a capital gain,” or maybe, “I do have a capital gain, but I wanna put more money into Opportunity Zones. Why can’t I use ordinary dollars? Why do I have to use capital gains dollars?” And unfortunately, that’s just the way that the program works. In order to be eligible for the full tax benefit of Opportunity Zones, you have to start with capital gains money. The other thing that I found interesting from the Washington Report was, okay we have, by the way, we have a Speaker of the House now.

Ashley: Woo-hoo.

Jimmy: So, that’s a huge hurdle that we cleared, to possibly getting some legislation passed before year end. But there was also mention briefly of a continuing resolution, beyond November 17th, to keep the government funded beyond November 17th. That could possibly include some tax stuff as well. I thought that was pretty cool. So maybe that’s the earliest we could get some OZ legislation, but…

Ashley: Hey, we can.

Jimmy: …fingers crossed on that one.

Ashley: I was going to say, fingers crossed, but I think that that’s…hmm. I’m not putting…I’m not going to Vegas on those odds.

Jimmy: So, but the biggest takeaway for me was I think there’s a good likelihood we get some tax legislation done, hopefully before the end of the calendar year 2023, but if not, don’t worry. We have this other deadline looming, April 30th.

Ashley: That’s right.

Jimmy: Let’s see what else we got. I have a panel starting, I’m gonna be speaking on, in about seven minutes. So I need to go in a moment.

Ashley: And I gotta get in there to heckle you.

Jimmy: You do. You do. I didn’t heckle you enough during yours.

Ashley: I know.

Jimmy: Mine’s gonna be hot topics. I’m gonna present some proprietary data from a recent Opportunity Zone survey that we conducted of our OpportunityDb email subscribers. So, I’ll be posting a link to that in the show notes for today’s episode as well. Ashley, give me one final thought. Opportunity Zones, anything under the sun. What do you got?

Ashley: I would love to see the program become permanent. And I’d love to see folks advocating for that, and I think that that’s one of the things that we’ve all gotta do. We’ve gotta spread the word. We gotta get the word out to folks that don’t understand. So, if you know somebody that’s got capital gains, you need to tell them. And if you’re a CPA, or a business broker, or a lawyer, and you’ve got clients that are facing capital gains and you don’t know about Opportunity Zones, you need to learn. That’s what we do at OZPros. We love to teach people about it, but I think that it’s incumbent upon all of us to get the word out, and to make this thing Main Street for everybody.

Jimmy: Ashley, thanks for joining me today. Before we go, tell our viewers and listeners where they can go to learn more about you and OZPros.

Ashley: Absolutely. Ozpros.com. Once again, that’s ozpros.com. You can schedule a strategy call with me. You can get your Qualified Opportunity Fund or Qualified Opportunity Zone business set up. And we’re almost at 1000 setups, Jimmy. And so, for the 1000th customer, it’s gonna be, there’s gonna be, like, confetti, and fireworks, and we got some actually really cool stuff that we’re gonna do for that thousandth customer. So, we’re pretty stoked about that. And then we’ve also got an OZ mastermind called the OZ Ascent, which is a weekly call where we talk about all things Opportunity Zones, and we help people with compliance.

Jimmy: Fantastic. As always, we can find more notes on today’s episode at opportunitydb.com/podcast. There, we’ll have links to all the resources that Ashley and I discussed on today’s show. Ashley, this has been a pleasure. Thanks again for joining me today.

Ashley: As always, Jimmy, great to be with you. Looking forward to the rest of the show. Looking forward to your panel.

Jimmy: Me as well.