On April 19, 2023, Bisnow quoted Elizabeth Stieff regarding the lack of interest in Maryland’s Opportunity Zone tax incentives.
According to the article, Maryland focused incentives on boosting operating businesses in its 149 Opportunity Zones by providing loans and tax credits tailored to active enterprises. However, there has been a lack of applications for Maryland tax incentives offered to companies in the state's Opportunity Zones which highlights the limitations of the federal program to steer investments toward operating businesses in economically downtrodden areas.
“Maryland's tax incentives haven't generated interest because they didn't focus on the part of the program generating the most activity: real estate development,” said Stieff.
"Although the Federal Opportunity Zone program is available for real estate and operating businesses, we have seen the most success with real estate projects," said Stieff. "So, I think it’s an issue of alignment — most Opportunity Zone projects are real estate focused but the Maryland Opportunity Zone incentives largely are not applicable to real estate projects."
Federal legislators created the Opportunity Zone program as part of the Tax Cuts and Jobs Act of 2017. At the time, its architects hailed the initiative as an innovative approach to alleviate economic inequality.
More than $34B has been raised to deploy into Opportunity Zones, but the level of economic impact it has had in disadvantaged areas remains unclear.
"I have not seen a lot of businesses take advantage of [Opportunity Zone investments] that are operational businesses," Stieff said. "Other than one-off questions about whether or not a particular business would qualify, almost everything we see is real estate."
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