Trump To Form Committee To Direct Federal Funding Toward Opportunity Zones
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As investors line up to pour capital into the newly created Qualified Opportunity Zones, the federal government is gearing up to join — raising a familiar specter of conflict of interest concerns for the first family.
President Donald Trump will sign an executive order to form a committee tasked with directing federal dollars into opportunity zones, the New York Times reports. The committee will be led by Secretary of Housing and Urban Development Ben Carson and bring together 13 federal agencies, including the Departments of Agriculture and Justice, according to the Times.
Trump's announcement has sparked criticism from government watchdogs and consumer advocates concerned about the potential conflicts of interest with senior officials in the White House owning properties that could benefit from opportunity zones. This censure has been heightened by the fact that Ivanka Trump was perhaps the policy's chief supporter within Trump's inner circle, the Associated Press reports.
Ivanka's husband, Jared Kushner, a White House adviser and former CEO of development firm Kushner Cos., also owns a $25m-$50M stake in the real estate startup Cadre, which plans to create its own OZ fund, according to the AP.
Federal agencies reportedly have already worked up a list of 150 possible initiatives they could undertake to support opportunity zone investment. Trump has touted the opportunity zone provision of the Tax Cuts and Jobs Act of late 2017 as a way to drive investment to impoverished and underserved communities, but early research has supported many critics' beliefs that the bulk of investment would go to already gentrifying areas that don't require further incentives to lure capital.
With or without federal support, opportunity zones have drawn billions of dollars of interest already from a variety of sources, including some close to Trump. Anthony Scaramucci, who briefly served as White House communications director, has created a Qualified Opportunity Zone Fund through his company Skybridge Capital.
Ivanka and her husband also hold interests in at least 13 properties owned by Kushner Cos. that are located in opportunity zones. Six of those properties are reportedly located in the Brooklyn Heights neighborhood of New York City, with one condo within that portfolio going for $8M, according to the AP.
The inclusion of such areas, which were chosen by each state's governor, has also been a subject of controversy, most notably for the stretch of land in nearby Long Island City within which Amazon will build a massive headquarters.
The announcement of Trump's executive order was originally supposed to take place in Baltimore, but was relocated to Washington, D.C. — possibly due to Mayor Catherine Pugh and Maryland Gov. Larry Hogan declining to attend, Axios reports.
The order might also come with a requirement that opportunity zone investors report their activity so that economists can evaluate the actual effect of the policy, the Times reports.
CORRECTION, DEC. 14, 2 P.M. ET: A previous version of this article incorrectly identified Ivanka Trump as an investor in the startup Cadre. This article has been updated.