Phoenix Rising Soccer Club finds opportunity in Opportunity Zones

The 2017 Tax Cuts and Jobs Act, created another avenue for investors to entrust unrealized capital gains through the form of Opportunity Zones. These designated geographical areas are selected by the state and then approved by the federal government. Qualifying areas must meet the requirements established to mark them as economically distressed.

Arizona was one of the first states, through the intentional efforts of Governor Ducey, to submit Opportunity Zones to the federal government for final approval. There are 168 Opportunity Zones that have been certified in Arizona.

NAIOP-Arizona recently hosted an event examining the value in Opportunity Zones for both real-estate leaders and their clients.

Brett Johnson, founder and partner of the Fortuitous Partners and co-chairman and shareholder of Phoenix Rising Football Club, spoke at the event sharing how opportunity zones have helped Phoenix Rising.

The team currently plays in a temporary stadium on tribal land in Tempe, near McClintock and the Loop 101.  This area is one of the qualifying Opportunity Zones in Arizona. Johnson, in collaboration with the financial firm Goldman Sachs, created the Opportunity Fund Fortuitous Partners “with the intent of using this program for Phoenix Rising.”

“We see the program as a phenomenal vehicle to do exactly what the intent of the program is – to create a lot of jobs, to develop areas that might not have attracted private and/or public capital to begin with,” Johnson said. “We are beyond excited about how it will shift the trajectory of these assets in the state of Arizona.”

Although this Fund will initially benefit the development of the Phoenix Rising stadium complex, Johnson explains it will serve the community at-large.

“We see this program as a way to build training facilities and if we build training facilities and kids and adults are going there, they are going to want a place to shop,” Johnson said. “They are going to want a place to eat and then you’re probably going want to build some other assets like multi-family, etc. We think there is a fantastic virtuous cycle of economic activity we can create around the program. So we are really looking to develop 30+ acres and create a bunch of assets, hotel, multi-family, retail, residential. Assuming that we continue to do what we are doing is one day to get an MLS (Major League Soccer) franchise for investors to own a stake in, an asset that you can hold on to for more than 10 years that will appreciate significantly not to pay tax on it.”

Johnson shared his optimism about the project. “We are going to make a difference with this program,” he said. “ I am excited to start to see this move forward and do what everyone intends for it to do, which is create jobs, start development, and make it all worthwhile.”

By visiting the Arizona Commerce Authority website, you will be able to find additional details about Opportunity Zones and look at a map with the designated Opportunity Zone locations in Arizona.

Audra Carver

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