WASHINGTON (BBN) – President Donald J. Trump has seemingly wooed US mayors to his side with the Administration’s Opportunity Zones tax incentives for economically depressed areas and his proposed USD 1.5 trln Infrastructure fund at the US Conference of Mayors Winter Meeting in Washington, DC.
[US Treasury Secretary Steven speaks to Capitol Intelligence/BBN using CI Glass on Opportunity Zones and President Donald Trump proposed USD 1.5 trln Infrastructure Fund during US Conference of Mayors Winter Meeting in Washington, DC. January 24, 2019]
Speaking to Capitol Intelligence, US Treasury Secretary Steven Mnuchin said his estimate of USD 100bn of new investment to US cities and economically depressed rural areas through Opportunity Zones tax credits is a “low ball” figure.
The 2018 Tax Reform Act allows investors in qualified Opportunity Zones (ie inner cities and other economically depressed areas) to reduce their capital gains to zero if the investment is held over ten years.
Trump’s Opportunity Zones tax credit and proposed USD 1.5 trln Infrastructure fund has won over US Conference of Mayors President and Columbia, South Carolina Mayor Steve Benjamin as one of its most vocal cheerleaders.
[US Conference of Mayors President and Columbia, SC Mayor Steve Benjamin filmed by Capitol Intelligence/BBN using CI Glass on US urban infrastructure representing a USD 4trln market for sovereign wealth funds such as Qatar Investment Authority (QIA), Abu Dhabi Investment Authority (ADIA), Macquarie, Ontario Teachers’ Pension fund and The Carlyle Group when combined by Opportunity Zones best practice at the United States Conference of Mayors Winter Meeting news conference in Washington, DC. January 23, 2019]
Benjamin, a municipal bond lawyer by profession, noted that99 percent of economic growth in the United States is driven by US cities and that the same cities have a USD 4 trln deficit in infrastructure investment.
The combination of the Opportunity Zones and Trump’s Infrastructure plan has created veritable Gold Rush of the world’s leading institutional investors and SWFs such as Washington, DC-based The Carlyle Group; Australia’s massive Macquarie Capital, Canada’s Ontario Teachers’ Pension Plan; Doha’s Qatar Investment Authority and the UAE’s Abu Dhabi Investment Authority (ADIA).
[US Treasury Secretary Steven Mnuchin filmed by Capitol Intelligence/BBN using CI Glass on Opportunity Zones tax credits during US Conference of Mayors Winter Meeting in Washington, DC. January 23, 2019]
In fact, Macquarie was in full force at the Mayors Conference Winter Meeting with a team lead by former Obama official, David Agnew, tackling Baltimore Mayor Catherine Pugh over a potential municipal water utility privatization and door stepping New Jersey junior senator and likely presidential candidate, Corey Booker.
Former White House communications director and Skybridge Capital fund-of-funds founder, Anthony Scaramucci, has already started raising more than USD 2bn for REIT fund aimed solely at Opportunity Zones in partnership with China-backed Arlington, Virginia-based EJF Capital LLC real estate fund.
The Mayor’s Conference was also a M&A bonanza for Michael Corbat’s Citibank which fielded a large team of investment bankers at the conference. Citibank is leading the privatization process of Puerto Rico and is the main adviser for the proposed P3 of St. Louis Lambert Airport, the first major airport privatization on the US mainland.
Citibank’s leadership in US infrastructure derives from the fact the Corbat led Citibank European operations and scores of privatizations before being named Citibank CEO in 2012.
“It is a brave new world in the United States regarding privatizations and infrastructure investment. While this has been going on in Europe and Asia for decades, it has only just started in the United States and there is a lot of re-inventing the wheel,” a British born banker working for a US investment bank said.
Anchorage, Alaska Mayor Ethan Berkowitz is leading the pack of US mayors pursuing P3 deals with the USD 1bn transfer of the city’s electrical utility Municipal Light & Power (ML&P) to the Chugach Electric Association, Inc (Chugach).
[Anchorage AK Mayor Ethan Berkowitz speaks to Capitol Intelligence/BBN using CI Glass on Opportunity Zones, public private partnerships (P3) and President Trump’s USD 1.5 trln Infrastructure fund at US Conference of Mayors Winter Meeting in Washington, DC. January 25, 2019]
Berkowitz, unlike any other mayor, is blessed to be in a state with its own USD 60bn sovereign wealth fund, the Juneau, Alaska-based Alaska Permanent Fund.
The Alaska Permanent Fund, widely criticized by Alaskan natives for investing the state’s oil wealth in project in out-of-state investment such as the Tyson Corner shopping mall in northern Virginia could fund the privatization of Anchorage’s Ted Stevens International Airport.
The Trump White House Is unique in its ability to bury or even hide positive initiatives such as the Opportunity Zones tax credits and Infrastructure Fund programs from American voters, preferring to highlight non-economic red meat political issues such as immigration.
Rochester Hills. Michigan Mayor Bryan K. Barnett confirmed to Capitol Intelligence that a group of eight mayor led by Columbia Mayor Benjamin sat down with President Trump on January 25, 2019 to discuss the economic growth potential of Opportunity Zones and Infrastructure investment.
The closed press meeting — which followed President Trump’s Rose Garden news conference on the end of the government shutdown — was chaired by President Trump along with Vice President Mike Pence, Labor Secretary Alexander Acosta and Housing and Urban Development (HUD) Secretary Ben Carson in the Cabinet Room.
[US Conference of Mayors President and Columbia, Sc Mayor Steve Benjamin speaks to Capitol Intelligence/BBN using CI Glass on meeting President Donald Trump at the White House to discuss Opportunity Zones and USD 1.5 trln Infrastructure Fund on Friday, January 25, 2019 during the U.S. Conference of Mayors Winter Meeting in Washington, DC on January 25, 2019]
Mayor Bryant said the meeting with Trump proved that bipartisanship can exist in Washington, DC and be mutually beneficial for all concerned.
For now, leaders such as the democratic mayor of Columbia Steve Benjamin and the Republican mayor of Rochester, Michigan, Bryan K. Barnett, have to hold almost clandestine meetings to speak about economic growth opportunities that benefit 99% of all Americans.
By PK Semler in Washington, DC.
For more information please call +1-202-549-3399 or email pks@capitolintelgroup.com
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