Minnesota Opportunity Zone Advisors (MN-OZA) has launched the D.R.E.A.M. Fund, an Opportunity Fund focused on Minnesota Opportunity Zones.
Investors can benefit from the federal tax incentives afforded such Opportunity Funds under the recently enacted Invest in Opportunities Act.
The D.R.E.A.M. Fund (Developing Real Estate in Emerging Areas of Minnesota) is focused on eligible real estate investments (new developments and substantial rehabilitation) within the Minneapolis-St. Paul metropolitan area Opportunity Zones and those in larger communities across Minnesota. There were 128 zones identified by Gov. Mark Dayton and now certified by the U.S. Treasury Department, the administrator of the tax incentive-based program. The D.R.E.A.M. Fund sponsor is organized as a Statutory Benefit, LLC and has a stated social mission and ongoing reporting obligations. The fund’s mission is to enhance the social, environmental and economic vitality of Minnesota through its projects.
“Opportunity Zones offer a form of emerging market investing that taps overlooked and undervalued communities to unlock their full potential,” said Ravi Norman, a MN-OZA partner. “We see this unleashing enormous productivity to help America realize its greatest gains. The D.R.E.A.M. Fund’s name reflects our purpose and the aspirations of people, families and neighborhoods to create places that empower healthy communities.”
“We see the world through the same lens, and aspire to advance social, environmental and economic impact in Minnesota’s Opportunity Zone communities,” said partner Jamie Stolpestad. “We expect the greatest investor interest coming from those who prefer to invest locally and want to put their money where their heart is.”
D.R.E.A.M. Fund partner Loren Schirber said, “We are experienced with how to connect people, place and space, but we are also focused on building wealth in the community and executing through a local vendor and supply chain that can build skills and capacity in Opportunity Zone communities.”
The U.S. Treasury Secretary recently predicted that $100 billion would flow into Opportunity Zone Opportunity Funds. The D.R.E.A.M. Fund seeks to raise $100 million of total capital to deploy into projects state-wide. Under the Invest in Opportunities Act and recent Treasury and IRS guidance issued Oct. 19, investors who sell appreciated assets may roll over the gain from such sales to a qualified Opportunity Fund within 180 days and defer Federal capital gains tax until 2026. In addition, gains from the Opportunity Fund are free of federal capital gains tax if the investment is held for at least 10-years.
“There are very real time constraints under the Invest in Opportunities Act,” says Stolpestad. “We have been working for months and are excited that the detailed U.S. Treasury regulations have been issued so we can finalize the selection and underwriting of specific projects. And we can now talk with prospective investors with greater clarity from the new regulatory guidance,” he added.