Opportunity Zones are federally recognized, economically distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment. This initiative allows investor developers to diminish capital gains taxation and future appreciation by reducing their rate of taxation. These incentives are most beneficial when developers construct and hold the property for ten year or more.
In response to this legislation, KPC entered into a joint venture with environmental attorney Michael Goldstein to form Goldstein Kite Environmental investment fund (GKE). The fund was created to finance the acquisition, remediation, and redevelopment of Brownfield properties throughout the Southeast United States. Not coincidentally, many historically industrial submarkets were designated as opportunity zones to address a high concentration of environmentally contaminated and Brownfield properties.
Brownfield properties are the beneficiaries of significant development incentives including tax credits, which can provide up to 90% reimbursement for environmental remediation and horizontal development costs. Brownfields located within an opportunity zone, however, are the recipient of the capital gains incentives in addition to their Brownfield tax credits.
In October 2019, the partnership acquired the Former Biscayne Chemical site, a former chemical distribution facility located within an opportunity zone in the Overtown neighborhood of Miami, FL. The Florida Department of Environmental Protection recognizes the property as eligible for the Brownfield Site Rehabilitation Act. As remediation and redevelopment occur, GKE continues to source additional properties, which suit this unique criteria.