Amazon won’t use the Opportunity Zone tax break for its NYC campus

Amazon won’t use the Opportunity Zone tax break for its LIC campus

The program allows investors to defer taxes on capital gains

January 31, 2019 02:00PM

Jeff Bezos and Long Island City (Credit: Getty Images and John Gillespie via Flickr)

Amazon won’t be taking advantage of the Opportunity Zone tax break in Long Island City.

The tech giant confirmed it won’t pursue the incentives for its planned campus in the Queens neighborhood, Bloomberg reported.

“We will not be using the Opportunity Zone on this project,” Holly Sullivan, head of economic development at Amazon, told the City Council in a Wednesday hearing.

The area in LIC where Amazon is planning its offices was designated as an Opportunity Zone last year. Under the program, investors can defer federal taxes on capital gains until Dec. 31, 2026, reduce that tax payment by as much as 15 percent and pay no taxes on possible profits from an opportunity fund if they hold onto the investment for 10 years. The initiative is part of the 2017 tax overhaul.

Amazon didn’t comment on whether others attached to the project, such as outside investors or future development partners, would seek to use the tax incentive, the report said.

As part of the bidding process the state’s Empire State Development and the city’s Economic Development Corporation offered up to $3 billion in tax breaks and a dozen sites in the state, including several in the city, according to previous reports.

Amazon has said it’s in no rush to add workers in LIC. The company expects to have 700 employees in the area next year and hit 25,000 by 2028. The firm said it will remodel its temporary offices before workers can move in, and it could take two years to break ground on the New York campus. [Bloomberg] — Meenal Vamburkar

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As brutal cold grips city, mayor invokes emergency powers against bad landlords

As brutal cold grips city, mayor invokes emergency powers against bad landlords

Chicago apartment buildings in winter (Credit: iStock)

With the city locked down amid wind chills pushing 50 degrees below zero, Mayor Rahm Emanuel issued a rare order Wednesday instructing building inspectors not to wait for permission from landlords before fixing heating systems in rental buildings that violate city code.

The mayor directed buildings department Commissioner Judy Frydland to “use her police powers” to “to restore heat in buildings where landlords are failing to do their jobs,” Emanuel said in a press release.

The frigid weather forced local courts to close Wednesday and Thursday, but city leaders “are not waiting 48 hours … to hold landlords accountable,” Emanuel said.

The city’s heat ordinance requires apartment owners to maintain daytime temperatures of 68 degrees or higher, and nighttime temperatures of at least 66 degrees. Earlier this month, city officials said they had received more than 600 tenant complaints about cold units and were taking legal action against 10 landlords, according to NBC Chicago.

In cases when landlords don’t abide by the ordinance, city attorneys usually ask judges to appoint a “receiver” to make emergency repairs, officials said. But with courts closed, the buildings department is appointing maintenance workers on its own.

By the time the announcement went out Wednesday morning, crews already had made emergency repairs to three buildings, according to the city. Once the courts reopen, the city will sue for reimbursements from the landlords.

As brutal cold grips city, mayor invokes emergency powers against bad landlords

As brutal cold grips city, mayor invokes emergency powers against bad landlords

City workers will make repairs to ensure rental units have heat — and then bill the property owners for the work

Chicago apartment buildings in winter (Credit: iStock)

With the city locked down amid wind chills pushing 50 degrees below zero, Mayor Rahm Emanuel issued a rare order Wednesday instructing building inspectors not to wait for permission from landlords before fixing heating systems in rental buildings that violate city code.

The mayor directed buildings department Commissioner Judy Frydland to “use her police powers” to “to restore heat in buildings where landlords are failing to do their jobs,” Emanuel said in a press release.

The frigid weather forced local courts to close Wednesday and Thursday, but city leaders “are not waiting 48 hours … to hold landlords accountable,” Emanuel said.

The city’s heat ordinance requires apartment owners to maintain daytime temperatures of 68 degrees or higher, and nighttime temperatures of at least 66 degrees. Earlier this month, city officials said they had received more than 600 tenant complaints about cold units and were taking legal action against 10 landlords, according to NBC Chicago.

In cases when landlords don’t abide by the ordinance, city attorneys usually ask judges to appoint a “receiver” to make emergency repairs, officials said. But with courts closed, the buildings department is appointing maintenance workers on its own.

By the time the announcement went out Wednesday morning, crews already had made emergency repairs to three buildings, according to the city. Once the courts reopen, the city will sue for reimbursements from the landlords.

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Baptist Health buys Collection Residences site in Coral Gables for $37M

Baptist Health buys Collection Residences site in Coral Gables for $37M

Brian Keeley, CEO of Baptist Health South Florida, and the Collection Residences

Baptist Health South Florida just closed on a site in Coral Gables for $37 million that was at the center of a contentious lawsuit between developers Masoud Shojaee and Ugo Colombo.

Shojaee, a homebuilder, and Colombo, a developer and owner of the Collection luxury car dealership, had previously planned to jointly develop the Collection Residences on the 2.8-acre property at 250 Bird Road. They planned to build 128 condos along with retail space on the site until their partnership ended nearly three years ago and litigation pursued.

The Real Deal first reported in July that Baptist Health was under contract to buy the property, next to Colombo’s dealership and near the Shops at Merrick Park.

Avison Young’s Michael Fay, John Crotty, David Duckworth and Brian de la Fé brokered the deal.

Avison Young declined to comment on the sale and Baptist Health said it has not finalized its plans for the site.

In 2016, Shojaee’s Shoma Coral Gables filed suit against Ugo Colombo and his companies, alleging breach of contract and other charges. The suit sought between $4 million and $5 million in damages. The lawsuit alleged that Colombo sabotaged the project, “causing substantial damages to Shoma.” Colombo denied the charges. After more than two years, a Miami-Dade County judge dismissed most of the charges in August 2018.

Earlier this month, Safe Harbor Equity filed a $16.2 million foreclosure lawsuit against the joint venture that owned the Collection Residences over nonpayments. A judge recently dismissed the suit with prejudice, according to Ralph Serrano, managing director of the Miami-based lender. Now that the sale has closed, Safe Harbor Equity will get paid back the $16.2 million.

Records show Colombo and Shojaee’s joint venture paid $27 million for the property in 2013.

Baptist has been expanding throughout South Florida. It recently opened a four-story, 60,000-square-foot outpatient facility at Crescent Heights’ mixed-use development at 709 Alton Road in Miami Beach. Earlier this month, Baptist acquired a former Toys “R” Us in Royal Palm Beach for $15.8 million.

Baptist Health buys Collection Residences site in Coral Gables for $37M

Baptist Health buys Collection Residences site in Coral Gables for $37M

Property was the center of a contentious lawsuit between Ugo Colombo and Masoud Shojaee

Brian Keeley, CEO of Baptist Health South Florida, and the Collection Residences

Baptist Health South Florida just closed on a site in Coral Gables for $37 million that was at the center of a contentious lawsuit between developers Masoud Shojaee and Ugo Colombo.

Shojaee, a homebuilder, and Colombo, a developer and owner of the Collection luxury car dealership, had previously planned to jointly develop the Collection Residences on the 2.8-acre property at 250 Bird Road. They planned to build 128 condos along with retail space on the site until their partnership ended nearly three years ago and litigation pursued.

The Real Deal first reported in July that Baptist Health was under contract to buy the property, next to Colombo’s dealership and near the Shops at Merrick Park.

Avison Young’s Michael Fay, John Crotty, David Duckworth and Brian de la Fé brokered the deal.

Avison Young declined to comment on the sale and Baptist Health said it has not finalized its plans for the site.

In 2016, Shojaee’s Shoma Coral Gables filed suit against Ugo Colombo and his companies, alleging breach of contract and other charges. The suit sought between $4 million and $5 million in damages. The lawsuit alleged that Colombo sabotaged the project, “causing substantial damages to Shoma.” Colombo denied the charges. After more than two years, a Miami-Dade County judge dismissed most of the charges in August 2018.

Earlier this month, Safe Harbor Equity filed a $16.2 million foreclosure lawsuit against the joint venture that owned the Collection Residences over nonpayments. A judge recently dismissed the suit with prejudice, according to Ralph Serrano, managing director of the Miami-based lender. Now that the sale has closed, Safe Harbor Equity will get paid back the $16.2 million.

Records show Colombo and Shojaee’s joint venture paid $27 million for the property in 2013.

Baptist has been expanding throughout South Florida. It recently opened a four-story, 60,000-square-foot outpatient facility at Crescent Heights’ mixed-use development at 709 Alton Road in Miami Beach. Earlier this month, Baptist acquired a former Toys “R” Us in Royal Palm Beach for $15.8 million.

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Moving on: Anthony Scaramucci taps new partner for $3B Opportunity Zone fund

Moving on: Anthony Scaramucci taps new partner for $3B Opportunity Zone fund

Anthony Scaramucci (Credit: Getty Images)

Well that was fast.

Anthony Scaramucci’s SkyBridge Capital has found a new partner for its $3 billion Opportunity Zone fund, less than two weeks after ending its venture with EJF Capital.

The Mooch’s hedge fund is bringing on Westport Capital Partners, an investment management company with offices in Connecticut, California, Montana and the United Kingdom, SkyBridge announced Monday.

Westport Capital Partners’ Russel Bernard (Credit: SALT Conference)

SkyBridge previously partnered with Manny Friedman’s EJF Capital on the project, but the firms split up earlier this month. At the time, SkyBridge cited concerns from its distribution partners about the lack of experience EJF had managing real estate funds.

It appears that this will be less of an issue with Westport. The firm boasts on its website that its team of principals “collectively have over 100 years of real estate investment management, operating, consulting, and brokerage services experience.” It had about $2 billion of assets under management as of the end of September, and its recent moves include breaking ground on a 450,000-square-foot industrial park near Savannah and selling an 89-unit multifamily building in Santa Barbara for $56.2 million, according to the company.

Westport did not respond to a request for comment, and SkyBridge president Brett Messing was not immediately available.

Messing previously told The Real Deal shortly after SkyBridge and EJF split that the company hoped to announce its new partner soon, and that nothing would change regarding its fundraising goal and overall strategy.

Moving on: Anthony Scaramucci taps new partner for $3B Opportunity Zone fund

Moving on: Anthony Scaramucci taps new partner for $3B Opportunity Zone fund

The Mooch’s hedge fund SkyBridge split with its former partner EJF earlier in January

Anthony Scaramucci (Credit: Getty Images)

Well that was fast.

Anthony Scaramucci’s SkyBridge Capital has found a new partner for its $3 billion Opportunity Zone fund, less than two weeks after ending its venture with EJF Capital.

The Mooch’s hedge fund is bringing on Westport Capital Partners, an investment management company with offices in Connecticut, California, Montana and the United Kingdom, SkyBridge announced Monday.

Westport Capital Partners’ Russel Bernard (Credit: SALT Conference)

SkyBridge previously partnered with Manny Friedman’s EJF Capital on the project, but the firms split up earlier this month. At the time, SkyBridge cited concerns from its distribution partners about the lack of experience EJF had managing real estate funds.

It appears that this will be less of an issue with Westport. The firm boasts on its website that its team of principals “collectively have over 100 years of real estate investment management, operating, consulting, and brokerage services experience.” It had about $2 billion of assets under management as of the end of September, and its recent moves include breaking ground on a 450,000-square-foot industrial park near Savannah and selling an 89-unit multifamily building in Santa Barbara for $56.2 million, according to the company.

Westport declined to comment on the partnership.

SkyBridge and Westport already had a longstanding relationship prior to partnering on the fund, according to SkyBridge president Brett Messing. He described the firm and its founder Russel Bernard as “a perfect fit for this.”

“He’s got a great track record,” Messing said of Bernard. “He’s done significant amounts of development and redevelopment which, as you’re aware, is what’s required under the Opportunity Zone regulations, and he specializes primarily in distressed real estate throughout the country.”

Westport should alleviate the concerns from distribution partners about SkyBridge’s sub-adviser not having a track record, according to Messing. The Opportunity Zone fund, which is structured as a REIT, will not change apart from the new partner, he said.

“The REIT just sort of continues on,” he said. “Same structure, same terms, same mission.”