Kostas Poulakidas is an Opportunity Zone attorney with Taft Stettinius & Hollister LLP and serves as chair of its Public Finance and Economic Development practice group.

“We work with developers and communities who are looking for project investment, and Opportunity Zones has become one of the primary tools to help finance projects and generate economic development,” he said.

How and why did you get involved in the Opportunity Zone industry?

For a lot of development projects and businesses, Opportunity Zone investment can provide that additional boost to make a good project into a great project and attract investors who may not otherwise consider them as an investment.

What are some current trends you are seeing in the Opportunity Zone market?

Real estate continues to be the primary benefactor of Opportunity Zone investment but with the latest regulatory guidance we are now seeing more interest in investing in businesses that are located in Opportunity Zones. Also, investors are more educated with how Opportunity Zones work and the related tax and investment benefits; they are asking more sophisticated questions related to OZ Funds and OZ businesses and their structures which are requiring developers, businesses and fund managers to carefully think through their project and business structure.

How do you think the pandemic has impacted the OZ industry? 

While the pandemic affected numerous projects, we also are seeing potential investors receive significant capital gains during this time from other investments and are looking for good OZ investments. For example, we worked on a hotel project that received full funding in the middle of the pandemic when other hotel projects were faltering and it did so because of Opportunity Zone investors; now it will be the first in its market to open which will give it a considerable market advantage over its competition. This project, the investors and the community all will benefit because of the Opportunity Zone program.

What achievement in this market has been most rewarding for you? Why?

The last year has been a challenge for all of us. Being able to be innovative with project financing structures and incorporate tools like Opportunity Zones to find solutions to project financing needs is very rewarding.

What are your thoughts about the Impact Act and reporting requirements?

Having more information is always helpful and having this information available to the public and decision-makers will help improve the Opportunity Zone program and hopefully better target projects, businesses and communities so that they can gain access to needed capital.

What are your thoughts on the proposed bill to extend the OZ program to December 2028 – the Opportunity Zones Extension Act?

Absolutely necessary. In today’s investment climate it is very difficult for investors to wait 10 years to see the benefit of an investment program. By extending the deferment of capital gains until 2028, investors will have an incentive to make an investment now into projects that might not otherwise have access to the financial resources needed to build projects and businesses, create jobs, expand the local tax base and bring economic development to communities throughout the country.

What do you think we can expect from the new Biden administration when it comes to OZs?

The Biden-Harris Administration has an opportunity here to help bridge the income inequality gap in America. A vast majority of capital gains are on our coasts and even there it is concentrated in our most affluent cities. But the vast amount of need for capital to improve the quality of life in our communities is in middle-America. An overarching goal of whether Opportunity Zones are succeeding at the highest level is whether we are unlocking and bringing the investment being achieved on Wall Street and Silicon Valley to the homes of those living in the rest of America.

What is the favorite book you have read recently? Why?

“Trust: America’s Best Chance” by Pete Buttigieg. Whether it is within our political or social institutions, whether we are underwriting an investment, whether we are drafting legal agreements, nothing is more important than the relationship of the people who are involved – trust is the underlying bedrock of everything we do.

If you could change one thing about the OZ initiative regulations, what would you do?

While moderating a panel discussion at the 2019 Opportunity Zone Expo, a developer from Alabama said out loud what many know to be true with the Opportunity Zone Program by asking: “I’m a small developer in rural Alabama. It’s great to hear about all these $100 million OZ Funds, but I just need $1.5 million for a project my community needs – how come I can't find it?” He was right – access to capital in places like Alabama, Indiana, New Mexico, Georgia, Montana, Wisconsin is still hard to come by, especially now. There are good projects and investment in these communities, but not sufficient access to capital – the new regulations, congress and the Biden-Harris Administration have an opportunity to expand the Opportunity Zone program to support both big and small projects and businesses alike.

What about you would surprise others?

In 2019 my wife and I climbed Mt. Kilimanjaro – the best part isn’t the sunrise on summit; it’s looking back on the journey.

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