This sounds like it could work, depending on who exactly owns the QOF, but you'll also need to navigate the other NFP tax and governance rules, which might be tricky.
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Can a nonprofit create a QOF for the down payment of their facility to take advantage of the OZ tax incentive?
Can my nonprofit client use a QOF to build its facility in a QOZ and lease it for ten years, then use part of the lease as a down payment and set a sales price? I’ve heard that non-profits have to buy the property at market value. My client do not want to do that as they want to set the price. Is there a change to the regulation (or exemptions) to attract non-profits to serve the community by allowing them to use a 10-year lease to their own terms?
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The answer to this would require significant research. I do not understand how your economics would work for the investors. At the end of the tenth years, the property would need to be sold at fair market value.
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