Brownfield Redevelopment in Opportunity Zones: Taking Advantage of OZ Tax Benefits
Determining Substantial Costs, Vacancy, and Environmental Remediation
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Environmental
- event Date
Wednesday, May 20, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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This CLE course will provide counsel with guidance based on the opportunity zone (OZ) regulations recently released by the Treasury Department related to brownfield redevelopment. The panel will address the IRS requirements in the assessment, remediation, and redevelopment of brownfield properties located in OZs in order to take advantage of the tax incentives created by prior tax reform.
Mr. Collings is co-chair of the Energy & Environmental Practice Group, co-chair of the Sustainability and Environmental Services Practice Group, former chair of the Litigation Department, and a former member of the Firm’s Executive Committee. He has more than 25 years of regulatory and litigation experience in environmental law and hazardous substance issues and environmentally-affected corporate, real estate, and land use issues. A former enforcement attorney and manager at the U.S. Environmental Protection Agency, Mr. Collings represents manufacturing, transportation, financial services, retail and real estate businesses and others with permit needs, claims, and transactional matters involving environmental or regulatory issues. He has detailed familiarity with federal, state and local regulatory programs and their managers and tries cases in state and federal courts and administrative tribunals.
Mr. Duke focuses his practice on helping businesses navigate complex environmental and land use laws and regulations pertaining to corporate and real property transactions, mine expansions, land development projects, and brownfield redevelopment projects. He regularly assists business clients in matters of site acquisition and due diligence, construction and related project development agreements, project financing, and tax mitigation and development incentives. Mr. Duke handles environmental enforcement actions pertaining to wetlands, petroleum and chemical bulk storage facilities and various commercial and industrial facilities.
As part of the sweeping changes provided in the 2017 tax reform bill, Congress has attempted to incentivize brownfield redevelopment. Unfortunately, it has taken over two years and multiple attempts at rulemaking by the IRS to approve standards and definitions to implement this tax incentive.
Counsel assisting potential purchasers or current owners of brownfield property need to be conversant in how to meet the definition of qualified OZ, including the vacancy period and definition of the term "vacant" under the rules. Property owners need clarification regarding how much of the property will need remediation and what the IRS defines as satisfying the "original use" test.
Knowledge of the requirements related to how much of the costs of brownfield site assessment and remediation are eligible as "substantial improvements" will be a vital factor in determining the value of future investment in these distressed properties. Investors also need guidance on what and how to handle the substantial improvement requirement timeline and what type of safe harbor provisions may exist if permitting of the site is delayed.
Listen as our expert panel discusses the best means of navigating these legislative hurdles to optimize a tax incentive designed to develop under-utilized property and increase the overall tax base while restoring the environment. Learn practical techniques for analyzing the environmental requirements to meet the brownfield OZ redevelopment requirements.
- Overview of brownfield redevelopment
- OZ tax incentives under tax reform
- Principal issues and considerations
- Qualifying costs
- Substantial operational and definitional adjustments
- Pre-development activities and environmental remediation
- Best practices and strategies after the new legislation
The panel will review these and other essential questions:
- What are brownfield OZs and what type of tax incentive is available for redevelopment?
- How are costs and vacancy defined under tax reform to be eligible as an OZ?
- How can counsel assist when a delay in the substantial improvement timeline occurs?
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