Election Analysis At The Novogradac 2024 OZ Summit, With Mike Novogradac

Last week, Novogradac hosted their annual Opportunity Zones Summit, a convening of key OZ stakeholders and professionals.

Mike Novogradac, managing partner at Novogradac & Company, joins the show from the conference site in Washington DC to discuss the optimistic outlook for the Opportunity Zones incentive following the recent election results, and the potential impact on future tax legislation and program extensions.

Episode Highlights

  • The positive atmosphere at the Novogradac 2024 Opportunity Zones Summit, influenced by the election results from the prior evening.
  • How Trump’s support for Opportunity Zones, coupled with Republican control of the House and Sentate could likely lead to an extension and renewal of OZs in 2025.
  • When tax legislation via budget reconciliation is most likely to be enacted.
  • How the annual Novogradac Opportunity Zones Summit and the Novogradac Opportunity Zones Working Group continue to serve as critical platforms for industry collaboration and advocacy, focusing on extending and improving the OZ incentive.
  • Recap of the “Washington Report” panel hosted by Mike, which provided timely analysis, given the election’s impact, and featured insights from Capitol Hill staffers on the legislative outlook for OZs.

Guest: Mike Novogradac, Novogradac & Company

Featured On This Episode

About The Opportunity Zones Podcast

Hosted by OpportunityZones.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in the Opportunity Zones industry.

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Show Transcript

Jimmy: Welcome to the “Opportunity Zones Podcast.” I’m Jimmy Atkinson, and I’m thrilled to be joined by Mr. Mike Novogradac himself. Mike, it’s great to have you on the show. Thanks for joining me today, at your conference here, the Novogradac Opportunity Zones Summit.

Mike: Yeah, thank you. And thanks for joining us. It’s always great having you here.

Jimmy: Yeah. I love coming to these, because I do so much of what we do at OpportunityZones.com, so much of what you do also, at the Opportunity Zones Working Group. It’s all online, webinars, podcasts, but it’s really nice to get together in person. So, I love coming to this conference every year. And we’ve had two or three panels already. And the excitement in the room is palpable, at least for me, it seems to be, based on the election outcome last night. But what are your thoughts on the conference so far, and just the mood in the room, given the election outcome from last night?

Mike: Well, I would just say I think within the Opportunity Zone space, we’ve been very focused on what the election outcome was going to be. And when I say what it was gonna be, was there going to be a Republican sweep, a Democratic sweep, or a divided government? And who was going to be president? Was it going to be Kamala Harris or Trump? I think we all know that Trump supports Opportunity Zones very much. So I think there was within the Opportunity Zone space the notion that if Trump is elected president, that’s a strong signal for the future of Opportunity Zones, both for extension and renewal. And I think, in the conference here today, folks are obviously recognizing that Trump will be the next president, or be president again. And there’s a reasonable chance, a high probability chance, that the Republicans will sweep. So, the whole, the opportunity within Opportunity Zones is quite great right now.

Jimmy: Yeah, it was the most favorable outcome for the purposes of hoping for an extension act at some point in 2025. The Super Bowl of tax, it has been called. We don’t have express written consent from the NFL to use “Super Bowl.” But I like to joke we have implied oral consent.

Mike: That’s right, that’s right.

Jimmy: So, Mike, tell me a little bit about this conference series, the Opportunity Zone Summit that you host every year, and why all these folks attend this year after year.

Mike: Yes. Well, thank you for that. And the Opportunity Zones as a tax incentive, is in a very critical point in its evolution. We all know that gains get recognized in 2026, so now we’re focused on some type of an extension. So, additional investments in the current zones can be done for a couple more years, as well as a renewal of the incentive, where governors have a chance to redesignate areas based upon new census data. So, the purpose of the summit is to coalesce among a variety of constituents, and identify ways in which to enhance and improve the goals of Opportunity Zones. And I feel like the conference so far has really advanced the cause of extension and renewal of Opportunity Zones. And I’m excited what the opportunities are over the next year. I can tell you the Opportunity Zones Working Group is going to be very busy.

Jimmy: Yeah, it should be. I’m looking forward to the next OZ Working Group call. So, your panel, and you host this panel every year, is the Washington Reporter, “Washington Wire,” sometimes it’s known as, and you had some great panelists up there on the stage with you today, some staffers from Capitol Hill. Can you quickly summarize the results of that panel, some of the discussion there?

Mike: Yes, I’d be happy to. It was over an hour long, so I’ll have to give you a really quick summary.

Jimmy: Yeah, just the elevator pitch summary, because it was, I think it was 90 minutes long. And it was phenomenal. I love this panel every year. But I told you afterwards, this year in particular, it was especially poignant, given the fact that we’re in this room, in the nation’s capital, the day after the election. But if you could summarize it, just very briefly.

Mike: Well, Jimmy, you kind of said it best when you pointed out, it was sort of like being on CNN, and discussing the results as they’re coming in, because obviously, I went to bed last night expecting that Trump was going to become the next president, but there was a chance that Kamala Harris could kind of pull it out. Woke up this morning seeing that Trump was going to be the next president. And on the session, sort of, this morning, we were thinking through what the implications of that was for the future of Opportunity Zones. And I would say, broadly speaking, either there will be, the Republicans will take control of the House as well. There’ll be a Republican sweep. We’ll do budget reconciliation. And through that, there will be kind of extension and renewal of Opportunity Zones. Or, the Democrats will eke out a win in the House. And as a consequence, we wouldn’t necessarily have budget reconciliation and renewal of Opportunity Zones as much as we might have some sort of extension, or some other, shorter-term treatment of Opportunity Zones. Because of the fact that Trump will be president again, and he’s so supportive of Opportunity Zones, we fully expect, irrespective of the control of the House, there’ll be some positive impact on Opportunity Zones through future legislation. Once again, a Republican sweep, likely extension and renewal. If the Democrats do take back the House, then something on a shorter term.

Jimmy: Well, thank you. That was a great job summarizing. And I do think, you know, we’re recording this Wednesday afternoon, and we’re not 100% sure the status of the House, who’s gonna control it, but it looks very likely that the Republicans are gonna control. But we can’t say with 100% certainty yet. But yeah, if it does become a Republican sweep, certainly, the future is very bright for Opportunity Zones in terms of an extension, and potentially renewal in an OZ 2.0 at some point next year. Is that right?

Mike: Yeah, it definitely is. And you might be thinking timing-wise, when might all this happen? And there’s gonna be an effort to get it done in the first half of next year. I think that is very optimistic. And in all likelihood, a major tax bill, the Super Bowl of tax, as you mentioned, is likely at the second half of next year. And I do think when we do this summit next year, we’re gonna be right, likely be right in the middle of it, so I’d encourage all your viewers and listeners to join us next year.

Jimmy: Yeah, I hope you do all join next year if you didn’t join this year. Mike, thanks for joining me today. Before we go, can you tell our audience where they can go to learn more about you and Novogradac?

Mike: Yes, I’d be happy to. If you just google Novogradac OZ, Novogradac Opportunity Zones, you’ll take us to our website. You can go to opportunityzonesresourcecenter.com, or novoco.com. And I’d encourage you if you’re not already a member of the Opportunity Zones Working Group to reach out to my partner, Jason Watkins, and join us.

Jimmy: Jason Watkins, a great partner here at Novogradac. He was the moderator on the panel that I just spoke on a short while ago. For our audience out there today, we’ll have show notes for today’s episode on our website. You can find those at opportunityzones.com/podcast, and I’ll link to a couple of the resources that Mike and I discussed on today’s episode. And if you’re watching us on YouTube, give us a thumbs up if you liked today’s episode. And please be sure to subscribe to us on YouTube or your favorite podcast listening platform, to always get the latest episodes. Mike, it’s been a pleasure speaking with you today. Thanks so much for throwing this great party, this conference, and for being on the podcast today. I really appreciate your time.

Mike: And thank you for joining us. It’s always great to see you.