Silicon Valley Community Foundation Official Sees Opportunity Zone Program Role
The top investment official of the Silicon Valley Community Foundation says foundations could provide loans to make new funds attractive for investors.
A top official of the largest community foundation in the US, the $13 billion Silicon Valley Community Foundation, said his organization and others institutional investors may be able to play a role under the federal government’s opportunity zone program in providing loans for fund investments designed to help spur housing and business creation or expansion in economically depressed areas.
The comments of Bert Feuss, the Mountain View, Calif. foundation’s senior vice president of investments, came during a conference on responsible investing in San Francisco on Tuesday. Panelists, including Feuss, discussed the potential implications of the US Treasury Department’s certification late last month of more than 8,000 communities or portions of communities nationwide as opportunity zones.
Under rules proposed by the Treasury Department, investors may defer and reduce capital gains taxes from investments by plowing the money into funds to create housing and other development projects in the economically depressed opportunity zones. The proceeds from the new fund investments are not taxable if the investments are held for at least 10 years.
Feuss said institutional investors like foundations can play a role because they can help the equity backers of the opportunity zone funds make an adequate market return by providing, for example, leveraged loans that help the overall financing of the project....