Q&A with Seamus Fitzgerald: Opportunity Zone Program in Frederick

December 11, 2019

The Opportunity Zone Program (OZP) is a highly anticipated federal program with an ambitious goal to revitalize the nation’s economically-distressed communities by offering tax incentives to commercial real estate investors, developers, and building owners.

As of December 2018, the U.S. Department of the Treasury and the IRS designated opportunity zones in all 50 states and Washington D.C., according to the IRS. In Frederick County, opportunity zones fall in the southern portion of Downtown Frederick, adjacent to Carroll Creek and near Frederick Municipal Airport and the MARC train station.

Another hotspot opportunity zone is the 355/85 corridor that’s located along the I-270 Technology Corridor, just south of the City of Frederick.

With at least two ideal locations for economic development and job creation, here’s what the OZP program means for the future of real estate in Frederick County, Maryland.

The Opportunity Zone Program is widely considered a bold incentive by the majority of real estate experts. Why do you think it’ll work?

The short answer? Developers and investors follow the money. The potential deferral or elimination of capital gains taxes when certain criteria are met is VERY attractive to real estate types.

The opportunity zones in Frederick County fall mostly near downtown. Why is that?

Frederick was very fortunate to have opportunity zones designated both in the city and surrounding areas.

What does the OZP mean for the future of residential real estate in Frederick County?

I think its impacts will be two fold. One, it will spur investment and development in long-term residential investment properties — namely apartments. An increase of rental units in underserved areas will help alleviate pressure on other types of housing.

And two, it will make commercial development of grocery stores, shopping centers, and other neighborhood services attractive to develop in areas where it may not have been feasible before.

What does the OZP mean for the future of commercial real estate in Frederick County?

The simple answer is higher returns for investors in these underserved areas, which will spur investment, neighborhood services, and job creation.

Opportunity zones are designed to spur economic development and job creation. Will investors, developers, and residents see an immediate or long-term difference in the county? If so, how?

I think the impacts will be seen in both the medium- and long-term. Development approvals don’t happen overnight, but the effects will be long lasting.