Editor’s note: Contributing columnist, Steve Nicklas, expresses his views and insight on various topics in Marketplace.
— Steve’s Marketplace —
When opportunity knocks, you should answer. And get in the zone.
Designed to attract private investment into economically stressed areas, opportunity zones are creative vehicles initiated through the Tax Cuts and Jobs Act of 2017. They’ve worked wonderfully over the past five years. And they are one of the few effective programs the current administration has not canceled.
An opportunity zone exists in Yulee, although most people don’t know it. In total, there are 8,700 of them across the country. Under the concept, investments into an opportunity zone receive tax advantages. So wealthy investors are understandably attracted to them.
The concept has even been taken to another level, with opportunity-zone funds springing up as a way for smaller investors to take part in the real estate markets. And a key component is that opportunity zones primarily use private capital, with $100 billion in investments at this point.
In a stark contrast, the current administration scatters federal monies into pet projects, such as anything in the green-energy area. Whether the investment provides a return on principal is secondary and nearly insignificant with government endeavors.
The federal government spending spree of today has ignited inflationary problems. The U.S. normally spends about $4 trillion in a calendar year; this past year, the spending tally has approached $8 trillion. So too much money is chasing too few goods, exacerbated by the supply-chain shortages.
While the current administration has tried to fix the supply-chain disruptions, it has failed miserably. Go to your favorite store or supermarket to see the empty shelves for yourself. And cover your eyes when you go through the check-out line.
Then go to your favorite restaurant. The portions are smaller and the prices are higher – it’s the only way to survive in the current environment. And when you have 100 restaurants on tiny Amelia Island, for instance, the competition is keener than ever.
Aside from the opportunity zones, Nassau County continues to attract substantial private investment. Not only have hedge funds been buying residential properties here, new hotels and restaurants and industrial projects are coming.
For instance, a Four Seasons Hotel was targeted for the south end of Amelia Island, and a new steakhouse restaurant is reportedly going into the downtown building occupied by The Marina Restaurant for many years. It’ll apparently have upstairs and downstairs seating, with a view of the water.
Some private endeavors have been thwarted, or discouraged, like a new RV park along Sadler Road. You have to wonder if this would be an appropriate addition to what is already a busy corridor. An earlier attempt to put an RV park on Amelia Island was rejected several years ago.
You can’t stop growth, but you can monitor it. So choose the best opportunities and go with them. It’s for the good of everyone involved.
Steve Nicklas is a financial adviser with a national brokerage firm who lives and works on Amelia Island. He is also an award-winning columnist. His columns also regularly appear in weekly newspapers in Northeast Florida and in Southeast Georgia, and on his website at www.SteveNicklasMarketplace.com. He has published a book, “All About Money,” of his favorite columns from the past 20 years. The book is available on Amazon. He has also done financial reports for area radio stations and for National Public Radio in Jacksonville. He can be reached by email at [email protected] or by phone at 904-753-0236.
For more info about opporunity zones in the U.S. and interactive maps, see the U.S. Dept. of Treasury Community Development Institutions Fund (CDFI) website.