With two well-situated Opportunity Zones, zoning changes and a robust street improvement program, the City of Hollywood is attracting major commercial real estate developers and investors.
“Our strategic location and public investments – coupled with the tax benefits of the federal Opportunity Zone program – have set the stage for new developments that benefit our community,” said Herb Conde-Parlato, economic development manager, City of Hollywood. “We are now reviewing three new projects that could add vitality to our local economy by creating new jobs, while offering a wider array of housing, dining and shopping options to our residents.”
Those Opportunity Zone projects include:
- Parc Place, the former “Bread Building” at 1745 Van Buren Street just south of Young Circle Park. Redevelopment stalled about a decade ago, but has been revived by developer BTI, said Conde-Parlato. Plans call for a 25-story tower mixed-use luxury apartment complex development in one phase. The project consists of 433 new apartments, 560 parking spaces and 17,000 square feet of commercial retail space. “This development would bring residential and retail vitality to our city and contribute to the walkability of our downtown core.”
- Soleste, a residential-retail project at 2001 Hollywood Boulevard in the downtown area. Miami-based Estate Investment Group is planning the development, which would include 350 apartments, 30,000 square feet of retail space and 497 parking spaces.
- A new hotel and restaurant at 2801 Greene Street in the South Florida Design and Commerce Center, a 150-acre mixed-use business park along Interstate 95. This $35 million investment would include 242 rooms and 162 parking spaces.
“We have many other new retail, office, multifamily and industrial real estate projects in the pipeline, but not all are seeking tax benefits under the Opportunity Zone program,” said Conde-Parlato.
Established by the U.S. Tax Cuts and Jobs Act of 2017, Opportunity Zones are designed to spur economic growth by reducing capital gains taxes on qualifying investments in designated geographic areas. The City of Hollywood moved quickly to capitalize on two large-scale Opportunity Zone designations, one in the downtown that includes all of Young Circle and the area between two major corridors, Federal Highway and Dixie Highway, and another on both sides of I-95 between Sheridan Street and Stirling Road.
By creating Opportunity Zone funds, investors can acquire and improve properties in these areas, while deferring any taxes on capital gains until Dec. 31, 2026. If the investment is held for five years, the original capital gains taxes are reduced by 10 percent; after seven years that deduction increases to 15 percent.
“Those opportunity fund investments must be entitled before year-end 2019 in order to take advantage of the 15 percent deduction,” said Raelin Storey, director of communications, marketing and economic development for the City of Hollywood. “That’s one reason why our city is seeing an upswing in development activity in the past few months. The City of Hollywood was ahead of the curve in marketing its Opportunity Zones, drawing a wave of interest among property owners, developers and investors. The tax advantages have helped make new projects more feasible, since the funds can be included in the development team’s capital structure. It’s an innovative approach to creating new business and real estate opportunities. Now, the city is working with the real estate investment community to bring forward well-designed projects that meet the standards of the city’s commercial and mixed-use zoning codes.”
Looking ahead, the city’s Opportunity Zones hold a potentially even bigger benefit for long-term investors – a permanent tax break.
“If you sell your investment after holding it for 10 years or longer, you would not have to pay any capital gains on the increased value of the property,” said Storey. “That’s really the ultimate advantage to investing in our Opportunity Zones.”