web analytics
a

Facebook

Twitter

Copyright 2015 Libero Themes.
All Rights Reserved.

8:30 - 6:00

Our Office Hours Mon. - Fri.

703-406-7616

Call For Free 15/M Consultation

Facebook

Twitter

Search
Menu
Westlake Legal Group > Kushner, Jared

Those Foreign Business Ties? The Trump Sons Have Plenty Too

Westlake Legal Group 11Trumpkids1-facebookJumbo Those Foreign Business Ties? The Trump Sons Have Plenty Too Vancouver (Wash) United States Politics and Government Trump, Ivanka Trump, Eric F (1984- ) Trump, Donald J Jr Trump, Donald J Trump-Ukraine Whistle-Blower Complaint and Impeachment Inquiry Trump Organization Trump International Hotel (Washington, DC) Presidential Election of 2020 Panama Kushner, Jared Kushner Cos JAKARTA, Indonesia India Dubai (United Arab Emirates) Conflicts of Interest Citigroup Inc China Biden, Joseph R Jr Biden, Hunter Apollo Global Management Aberdeen (Scotland)

Last month, the Trump family business received approval from a local government in Scotland for a major expansion of its golf resort near Aberdeen, marking the largest real estate development financed by the Trump Organization since the 2016 election.

In August, President Trump’s eldest son, Donald Jr., flew to Jakarta to help kick-start sales at a pair of Trump-branded luxury resorts planned for Indonesia. He appeared at a private event with wealthy prospective buyers and joined his politically connected billionaire Indonesian business partner at a news conference.

And last year, Donald Jr. visited India to sell condos at future Trump-branded towers, appearing at an event that also featured India’s prime minister.

“I’m here as a businessman,” Mr. Trump told the gathering in New Delhi. “I’m not representing anyone.”

But for the children of the politically powerful, personal business and public dealings can often be indistinguishable, especially when private projects depend on foreign governments that are looking to bolster ties with Washington.

In recent weeks, as the president has become embroiled in a scandal involving his interactions with Ukraine, Donald Trump Jr. and his brother Eric have taken to attacking Hunter Biden, the son of former Vice President Joseph R. Biden Jr., for his business dealings in Ukraine and China.

The brothers have accused him of leveraging his family name for personal gain while his father served in the Obama administration. Among other things, Hunter Biden was on the board of a Ukrainian energy company that has been a focus of Mr. Trump’s interest in the country.

“At the VERY LEAST, there’s the appearance of impropriety,” Donald Trump Jr. wrote on Twitter. “A clear conflict of interest.” At a rally in Minneapolis on Thursday, Eric Trump’s charged remarks about the former vice president’s son inspired the crowd of Trump supporters to chant, “Lock him up!”

Republicans, led by the president, have sought to make Hunter Biden’s international business dealings an issue in the impeachment debate in Washington. But the high-profile attack roles being played by Mr. Trump’s eldest sons have now thrust their own business dealings into the spotlight too.

Both sons have operated and promoted the Trump family business overseas during their father’s presidency, even as he retains ownership. And while the Trump and Biden father-son relationships differ in many ways, the business dealings have set up a simple parallel.

“They are criticizing the vice president’s son for doing exactly what they are doing themselves,” said Martin Ford, a member of the Aberdeenshire Council in Scotland, which voted last month to approve a proposal by the Trumps to build a 500-unit housing development. “They are conducting international business here in Scotland.”

Eric Trump, in a statement to The New York Times, said there was a distinction between his father’s career in business, with his recent turn to politics, and Mr. Biden’s decades in public office.

“When my father became president, our family stopped doing international business deals,” he said, a reference to a pledge by the Trump Organization not to begin new overseas projects during the Trump presidency. Hunter Biden, he said, did the opposite when his father became vice president.

The Trump business activities in India, Indonesia and Scotland were considered in compliance with the pledge, according to the company’s ethics rules, because they were building on deals already in the works.

Mr. Biden’s campaign declined to comment on Friday. But in a tweet, the former vice president once again suggested that the attacks on his son were part of a political smear campaign. “Let me make something clear to President Trump: I’m not going anywhere,” he wrote. “You’re not going to destroy me. And you’re not going to destroy my family. I don’t care how dirty the attacks get.”

Conducting business on the international stage has long been standard for the Trump Organization, which has placed the Trump name on hotels and towers in several countries.

But its international dealings have become far more complicated since Mr. Trump took office and his sons took leadership of the business, especially when foreign governments have been involved to the company’s benefit.

When the Trump Organization tangled with the majority owner of a property in Panama, for example, its local lawyers at one point called on the Panamanian president for an assist.

In Indonesia, the government is helping to build a major new highway that will make a new Trump development more accessible. Construction is scheduled to begin soon on what will be known as Trump Residences Lido, which will include 280 homes, a golf course and a hotel, south of Jakarta.

The Trump family’s partner in Indonesia — a billionaire named Hary Tanoesoedibjo — is financing the project, with the Trump family getting a cut of the sales.

In marketing materials released this summer, which featured the Trump family logo and a photograph of Donald Trump Jr., the company noted that the “Trump Residences Lido can be accessed directly through the newly opened Bocimi Toll Road.”

In Scotland, the Aberdeenshire Council recently dropped an earlier requirement that the new housing development could not be built until the Trumps spent tens of millions of dollars on other investments at the resort.

Sebastian Leslie, a local official who supported the project, said the family received no special consideration. “We don’t do that — we don’t give anybody special favors,” Mr. Leslie said.

But Mr. Martin, a council member who opposed the approval, said the Trumps benefited handsomely from the change. “It is a much, much more lucrative deal now,” he said.

Revenues coming to the Trump family in the United States have drawn scrutiny too, including at the Trump International Hotel in Washington — a property, opened in the final stages of the 2016 campaign, that has flourished while Donald Trump Jr. and Eric have run the company.

The hotel has been a magnet for Republican lobbyists and political fund-raisers, and companies and foreign officials with business before the Trump administration have thrown parties there, including the Kuwait embassy and the government of Azerbaijan.

Mr. Trump’s daughter Ivanka has also retained a stake in the family business even as she serves as a White House adviser, and last year she received trademarks in China related to her separate fashion ventures. Her husband, Jared Kushner, a senior adviser to the president, maintains a stake in his own family’s real estate business, which has received and sought funding from international sources as well.

In 2017, Mr. Kushner met privately at the White House with top executives from Citibank and the private equity firm Apollo Global Management. Those meetings came as the firms were contemplating sizable loans to his family’s business, Kushner Companies, which they did eventually make.

And since Mr. Kushner entered the White House, his family has courted state-connected investors in China and the Middle East — both regions that were in Mr. Kushner’s government portfolio — to bail out the firm’s headquarters at 666 Fifth Avenue in Manhattan.

But the presidency has also come with some costs for the Trump family business since the sons have been at the helm.

The company had been banking on global expansion to drive its growth, but when the president agreed to put a hold on new foreign deals, it curtailed those ambitions for his sons.

George Sorial, the company’s chief compliance counsel when the policy was developed, said it was the right thing to do even though it was not required by law and had cost the company significantly.

Eric Trump, in his statement to The Times, suggested that even the decision to forgo new foreign deals could be seen through the prism of Hunter Biden.

“My father was one of the most famous businessmen on earth and he sacrificed billions to be our president,” he said. “Joe Biden was an incredibly influential politician — his family made millions.”

The Biden campaign also sees opportunity in the nasty dispute. In a fund-raising email sent on Friday, the campaign singled out the Trump sons and the “lock him up” chant at the Thursday rally. “We are fighting back against this nonsense as hard as we know how every single day,” the campaign wrote.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Jason Greenblatt, a Designer of Trump’s Middle East Peace Plan, Is Leaving the Administration

WASHINGTON — President Trump’s special envoy for Middle East peace, Jason Greenblatt, will leave the administration, according to a senior Trump official, raising new questions about a long-delayed plan to resolve the Israel-Palestinian conflict.

Mr. Greenblatt has worked closely since early 2017 with Mr. Trump’s son-in-law and senior adviser, Jared Kushner, to design what Mr. Trump has called the “ultimate deal.” But their secretive plan has been delayed for several months, and it is unclear when it will be released — and whether Mr. Greenblatt will be around for the rollout.

Trump administration officials have said that the plan would not be released before Israel’s Sept. 17 election, which would determine the fate of Prime Minister Benjamin Netanyahu, a close Trump ally who has overseen expansionist policies in the occupied West Bank. The vote, if close, could be followed by months of political jockeying to build a governing coalition, which could further delay the plan’s release.

On Thursday, the Trump official would say about the plan only that “the vision is now complete and will be released when appropriate.”

Mr. Trump had warm words for Mr. Greenblatt on Twitter. “Jason has been a loyal and great friend and fantastic lawyer,” Mr. Trump tweeted, praising his “dedication to Israel.”

By the time the administration’s peace plan is revealed, Mr. Greenblatt, formerly a longtime top lawyer to the Trump Organization, may have returned to private life. He accepted a huge pay cut in early 2017 when he took his White House job at an annual salary of about $180,000. His wife and six children have remained at their home in Teaneck, N.J. It is unclear whether Mr. Greenblatt will return to the Trump Organization after he leaves the government.

Westlake Legal Group all-the-major-firings-and-resignations-in-trump-administration-promo-1530825933054-articleLarge Jason Greenblatt, a Designer of Trump’s Middle East Peace Plan, Is Leaving the Administration United States International Relations Trump, Donald J State Department Palestinians Netanyahu, Benjamin Middle East Kushner, Jared Greenblatt, Jason D

The Turnover at the Top of the Trump Administration

Since President Trump’s inauguration, White House staffers and cabinet officials have left in firings and resignations, one after the other.

Mr. Greenblatt will remain on the job “in the coming period,” the Trump official said. The absence of a commitment to stay through the plan’s release is sure to stir doubts about its viability, which many regional experts and officials already doubt will break a decades-long stalemate between Israel and the Palestinians.

Some Trump administration critics expect it will be a largely political document meant to bolster Mr. Netanyahu, assuming he survives this month’s election, and to affirm Mr. Trump’s domestic standing with conservative Jews and evangelical Christians who support Israeli territorial expansion.

But Trump officials argue that their peace effort is a serious one that incorporates lessons from the mistakes of several past administrations, although they have so far provided few details beyond a call for major new economic development in Palestinian areas.

After Mr. Greenblatt’s departure, Avi Berkowitz, an adviser to Mr. Kushner, will become “more involved in the process,” the Trump official said. So will Brian H. Hook, the State Department’s special representative for Iran.

Mr. Hook has already worked closely on the Israel-Palestinian file, a reflection of the Trump team’s theory that Israel and its Sunni Arab enemies can unite against a shared adversary: Tehran’s Shiite-led government.

Mr. Hook joined Mr. Kushner and Mr. Greenblatt for a midsummer Middle East tour meant to build support for their proposal from Arab leaders, whose backing they hope to win for a peace initiative that is expected to demand far more concessions from the Palestinians than from the Israelis. The Trump administration has been closely aligned with Mr. Netanyahu’s government on security and territorial issues, while taking an openly adversarial stance toward Palestinian leaders.

“It has been the honor of a lifetime to have worked in the White House for over two and a half years under the leadership of President Trump,” Mr. Greenblatt said in a statement. “I am incredibly grateful to have been part of a team that drafted a vision for peace. This vision has the potential to vastly improve the lives of millions of Israelis, Palestinians and others in the region.”

Mr. Kushner added in a statement that Mr. Greenblatt “has done a tremendous job leading the efforts to develop an economic and political vision for a long sought after peace in the Middle East,” saying he would remain a “close friend and partner.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich

NEW ORLEANS — President Trump has portrayed America’s cities as wastelands, ravaged by crime and homelessness, infested by rats.

But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans.

Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.

Former Gov. Chris Christie of New Jersey; Richard LeFrak, a New York real estate titan who is close to the president; Anthony Scaramucci, a former White House aide who recently had a falling out with Mr. Trump; and the family of Jared Kushner, Mr. Trump’s son-in-law and senior adviser, all are looking to profit from what is shaping up to be a once-in-a-generation bonanza for elite investors.

The stated goal of the tax benefit — tucked into the Republicans’ 2017 tax-cut legislation — was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs.

The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones. Any profits from those projects can avoid federal taxes altogether.

“Opportunity zones, hottest thing going, providing massive new incentives for investment and job creation in distressed communities,” Mr. Trump declared at a recent rally in Cincinnati.

Instead, billions of untaxed investment profits are beginning to pour into high-end apartment buildings and hotels, storage facilities that employ only a handful of workers, and student housing in bustling college towns, among other projects.

Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods.

ImageWestlake Legal Group 31ozbonanza8-articleLarge How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Among those raising money for opportunity-zone investments are Anthony Scaramucci, center, the founder of SkyBridge Capital, and Chris Christie, right, the former governor of New Jersey.CreditBridget Bennett for The New York Times

Mr. Scaramucci’s development in New Orleans offers a portrait of how the tax break works. His investment company, SkyBridge Capital, is using the so-called opportunity zone initiative to help build a hotel, outfitted with an opulent restaurant and a rooftop pool, in the city’s trendy Warehouse District.

The tax benefit also is helping finance the construction of a 46-story, glass-wrapped apartment tower — amenities include a yoga lawn and a pool surrounded by cabanas and daybeds — in a Houston neighborhood already brimming with new projects aimed at the wealthy.

And in Miami’s hot Design District, where commercial real estate prices have nearly tripled in the last decade, the tax break is set to be used for a ritzy new office tower with a landscaped roof terrace.

Some proponents of opportunity zones note that money is already flowing into downtrodden communities like Birmingham, Ala., and Erie, Pa. They argue that more funds will follow. And they note that because no data exists on where investments are being made, it is impossible to quantify the benefits going to the wealthy versus the poor.

“The early wave, that’s not what you judge,” said John Lettieri, president of the Economic Innovation Group, an organization that lobbied for the establishment of opportunity zones.

But leaders of groups that work in cities and rural areas to combat poverty say they are disappointed with how it is playing out so far.

“Capital is going to flow to the lowest-risk, highest-return environment,” said Aaron T. Seybert, the social investment officer at the Kresge Foundation, a community-development group in Troy, Mich., that supported the opportunity-zone effort.

“Perhaps 95 percent of this is doing no good for people we care about.”

Mr. Scaramucci, left, shaking hands with John F. Kelly, the former White House chief of staff. Mr. Scaramucci is using opportunity-zone advantages to help build a hotel in a trendy section of New Orleans.CreditBridget Bennett for The New York Times

The opportunity-zone tax break was targeted at the trillions of dollars of capital gains held by rich Americans and their companies: profits from investments in the stock market, real estate and other businesses, even short-term trades by hedge funds. When investors sell those assets, they can incur tax bills of up to 41 percent.

Sean Parker, an early backer of Facebook, helped come up with the idea of pairing a capital-gains tax break with an incentive to invest in distressed neighborhoods. “When you are a founder of Facebook, and you own a lot of stock,” Mr. Parker said at a recent opportunity-zone conference, “you spend a lot of time thinking about capital gains.”

Starting in 2013, Mr. Parker bankrolled a Capitol Hill lobbying effort to pitch the idea to members of Congress. That effort was run through his Economic Innovation Group. In addition to Mr. Parker, the group’s backers included Dan Gilbert, the billionaire founder of Quicken Loans, and Ted Ullyot, the former general counsel of Facebook.

The plan won the support of Senators Cory Booker, Democrat of New Jersey, and Tim Scott, Republican of South Carolina. When Congress, at Mr. Trump’s urging, began discussing major changes to the federal tax code in 2017, Mr. Parker’s idea had a chance to become reality.

Mr. Scott, who sponsored a version of the opportunity-zone legislation that was later incorporated into the broader tax cut package, said it was “for American people stuck, sometimes trapped, in a place where it seems like the lights grow dimmer, and the future does, too.”

“Let’s turn those lights on and make the future bright,” he added.

Confined to six pages in the 185-page tax bill, the provision can significantly increase the profits investors reap on real estate and other transactions.

It allows investors to defer for up to seven years any capital gains taxes on the money they invest in opportunity zones. (That deferral is valuable because it allows people to invest a larger sum upfront, potentially generating more profits over time.) After 10 years, the investor can cash out — by selling the opportunity-zone real estate, for example — and not owe any taxes on the profits.

Over a decade, those dual incentives could increase an investor’s returns by 70 percent, according to an analysis by Novogradac, an accounting firm.

“We are very, very excited about the potential,” the president’s daughter Ivanka Trump said last year at an event celebrating Mr. Parker’s role in creating opportunity zones. “The whole White House obviously is behind the effort. The whole administration.”

The opportunity zones, focused on low-income census tracts, were drawn by officials in each state, as well as in Washington, D.C., and Puerto Rico. Last year, the Treasury Department approved roughly 8,800 such zones. (The White House and Treasury declined to make senior officials available to discuss the program.)

Nearly a third of the 31 million people who live in the zones are considered poor — almost double the national poverty rate. Yet there are plenty of affluent areas inside those poor census tracts. And, as investors would soon realize, some of the zones were not low income at all.

The Preston is financed by the investors in Cresset, a multibillion-dollar asset management firm.CreditBrandon Thibodeaux for The New York Times

The Harvard Club of New York City, in Midtown Manhattan, is the embodiment of America’s old-money elite. Crimson-jacketed waiters serve members who are watched over by oil portraits of elite alumni.

One recent morning, financial advisers representing several dozen of America’s richest dynasties — advisers to the Pritzker and Soros families were listed as attendees — crowded into a drab meeting room on the club’s third floor.

The advisers were there to see Daniel Kowalski, a top aide to Treasury Secretary Steven Mnuchin and the Trump administration’s point person for the opportunity-zone rules. Mr. Kowalski is barnstorming the country, bouncing from one conference to the next, explaining to real estate investors and developers how to take advantage of the new rules.

Mr. Kowalski was an aide to the Trump campaign, where he worked for the White House policy adviser Stephen Miller. Before that, he was an aide to Jeff Sessions when Mr. Sessions was on the Senate Budget Committee.

[The Trump associates benefiting from a tax break for poor communities.]

At the Harvard Club, he dived into an explanation of how opportunity zones work — and for whom they work. “The audience for opportunity zones is inherently fairly small because it’s limited to capital-gains income, which is why I wanted to come and talk to this group,” he told the room of advisers.

That audience is small indeed: Only 7 percent of Americans report taxable capital gains, and nearly two-thirds of that income was reported by people with a total annual income of $1 million or more, according to I.R.S. data.

Yet this is a vital constituency, since the success of the opportunity-zone program will hinge largely on how much money investors kick in. That is why the Trump administration — and Mr. Kowalski in particular — is promoting the tax break on Wall Street.

“I have served a little bit as a middle man between the business community and the I.R.S.,” he said at another conference a few weeks later.

More than 200 opportunity-zone funds have been established by banks like Goldman Sachs and major real estate companies, including CIM Group of Los Angeles, which has previously been a partner with the Trump and Kushner families on projects. Those funds have said their goal was to raise a total of nearly $57 billion.

The law does not require public disclosure of who are taking advantage of the initiative or how they are deploying their funds. Among those who have invested money or said they intend to are Mr. Kohl, a founder of the department store chain that bears his name; Steve Case, co-founder of AOL; Alexander Bhathal, part owner of the Sacramento Kings basketball team; and Richard Forman, the former owner of the Forman Mills chain of clothing stores, according to interviews and other public statements.

Daniel Kowalski, the Trump administration’s point person for opportunity-zone rules, speaking at a Washington forum about them in June.CreditMelissa Lyttle for The New York Times

Many others are lesser-known business executives who recently sold small companies or real estate and are looking for ways to avoid large tax bills.

Paul DeMoret, for example, recently sold his auto-industry software company in Oregon. He said he was using some of those capital gains to help finance a Courtyard by Marriott in Winston-Salem, N.C., and an apartment building in Tempe, Ariz., among other projects in opportunity zones. He is making the investments through a private equity firm, Virtua Partners.

The tax break is largely benefiting the real estate industry — where Mr. Trump made his fortune and still has extensive business interests — and it is luring people with personal or professional connections to the president.

Mr. Christie, a onetime adviser to Mr. Trump, has raised money for opportunity-zone investments including an apartment building in Hackensack, N.J., and a self-storage center in Connecticut.

Cadre, an investment company co-founded by Mr. Kushner and his brother, Joshua, is raising hundreds of millions of dollars that it hopes to use on opportunity-zone projects. The company is eyeing neighborhoods in Savannah, Ga., Dallas, Los Angeles and Nashville that are expected to grow larger and wealthier in coming years. Jared Kushner has a stake in Cadre worth up to $50 million, according to his most recent financial disclosure.

Mr. LeFrak, a longtime confidant of Mr. Trump’s and a major campaign donor, is building a luxury residential community in the middle of an opportunity zone in Miami. (It is unclear how much of the development’s funding will end up being tax advantaged.)

Not far away in the Design District, Daniel Lebensohn is planning to build his high-end office tower. Mr. Lebensohn previously joined the Trump Organization to sell luxury condominiums at the Trump Hollywood complex north of Miami.

And Mr. Kushner’s family company directly owns or is in the process of buying at least a dozen properties in New York, New Jersey and Florida that are in opportunity zones. They include a pair in Miami, where Kushner Companies plans to build a 393-apartment luxury high rise with sweeping views of Biscayne Bay, according to a company presentation for potential investors.

A representative for the Kushner family confirmed that it was considering opportunity-zone funding for some developments, but said it would probably not use the funding for the Miami projects.

Backers of the opportunity-zone program say luxury projects are the easiest to finance, which is why those have been happening first. Over the long run, they say, those deals will be eclipsed by ones that produce social benefits in low-income areas.

At least some struggling neighborhoods are already starting to receive investments.

In Birmingham, for example, a developer is using opportunity-zone funds to convert a building, vacant for decades, into 140 apartments primarily aimed at the local work force.

“We are seeing projects that are being announced here in Alabama that would not have happened otherwise,” said Alex Flachsbart, founder of Opportunity Alabama, which is trying to steer investors to economically struggling neighborhoods.

Similar projects are getting underway in Erie, Cleveland and Charlottesville, Va. Goldman Sachs is using some of its capital gains — profits on the company’s own investments — in opportunity zones, including $364 million for mixed-income housing developments in Salt Lake City, Baltimore and other cities.

Mr. Case, the AOL co-founder, and Derrick Morgan, a former professional football player, are among those who have announced that they will invest in opportunity-zone projects that are designed to address clear social and economic problems.

As he announced his retirement from the Tennessee Titans in July, Mr. Morgan wrote on Instagram that his goal would be to “create more opportunities for those who are underserved and overlooked” in communities like Coatesville, Pa., where he went to high school.

Emanuel J. Friedman, a hedge fund manager, is using some of his capital gains and money he has raised from others to build 11 warehouses in rural Jasper County, S.C., near the Savannah seaport. The warehouses won’t employ many people, but he said the jobs would offer higher wages than hotel housekeeping positions at the nearby Hilton Head resort, where many area residents now work.

“Of course it will make a difference,” Mr. Friedman said. “It is mind-boggling. It is the best thing I have ever done.”

The developers of the Sole Mia project in North Miami, Fla., urged a local official to nominate the area as an opportunity zone and are now considering ways to take advantage of the status.CreditScott McIntyre for The New York Times

But even supporters of the initiative agree that the bulk of the opportunity-zone money is going to places that do not need the help, while many poorer communities are so far empty-handed.

Some opportunity zones that were classified as low income based on census data from several years ago have since gentrified. Others that remain poor over all have large numbers of wealthy households.

Number of Opportunity Zones by Median Household Income

More than 7 percent of opportunity zones had household incomes above the median census tract in 2017. Investors are focusing on projects in these neighborhoods.

Westlake Legal Group oz-distribution-335 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$137,147

Long Island City,

Queens

$98,508

Market Square,

Houston

Westlake Legal Group oz-distribution-600 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$91,397

Gowanus,

Brooklyn

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Westlake Legal Group oz-distribution-900 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$91,397

Gowanus,

Brooklyn

$77,692

Fishtown,

Philadelphia

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Source: American Community Survey

By Blacki Migliozzi and Juliette Love

And nearly 200 of the 8,800 federally designated opportunity zones are adjacent to poor areas but are not themselves considered low income.

Under the law, up to 5 percent of the zones did not need to be poor. The idea was to enable governors to draw opportunity zones in ways that would include projects or businesses just outside poor census tracts, potentially creating jobs for low-income people. In addition, states could designate whole sections of cities or rural areas that would be targeted for investment, including some higher-income census tracts.

In some cases, developers have lobbied state officials to include specific plots of land inside opportunity zones.

In Miami, for example, Mr. LeFrak — who donated nearly $500,000 to Mr. Trump’s campaign and inauguration and is personally close to the president — is working with a Florida partner on a 183-acre project that is set to include 12 residential towers and eight football fields’ worth of retail and commercial space.

In spring 2018, as they planned the so-called Sole Mia project, Mr. LeFrak’s executives encouraged city officials in North Miami to nominate the area around the site as an opportunity zone, according to Larry M. Spring, the city manager. They did so, and the Treasury Department made the designation official.

The Far West Side of Manhattan is part of an opportunity zone — even as high-end towers have been replacing run-down apartment buildings and more than 15 percent of households reported income of $200,000 or more in 2017, according to an analysis by Webster Pacific, a consulting firm. This is the new home of Pershing Square Capital Management, the prominent hedge fund run by the billionaire Bill Ackman.

Mr. Ackman is trying to find tenants for 80,000 square feet of unused office space in his fund’s building, which has a Jaguar dealership on the ground floor. He said he was using its location inside an opportunity zone as a lure.

That is because investors can use their capital gains to invest not only in real estate but also in businesses inside opportunity zones. A company that sets up shop inside Mr. Ackman’s building therefore would be eligible to accept tax-advantaged opportunity-zone money.

One of the Sole Mia partners is Richard LeFrak, who donated nearly $500,000 to President Trump’s campaign and inauguration.CreditScott McIntyre for The New York Times

Financial institutions are not even trying to make it look as if their opportunity-zone investments were intended to benefit needy communities.

CBRE, one of the country’s largest real estate companies, is seeking opportunity-zone funding for an apartment building in Alexandria, Va., which CBRE is pitching to prospective investors as “one of the region’s most affluent locations.”

JPMorgan Chase is raising money to build housing targeting students in College Park, Md., near the University of Maryland. (Because many students do not have jobs, census data often wrongly suggests that college towns are poor neighborhoods.)

In marketing materials, JPMorgan noted that while College Park “qualifies as low income due to the student population, the area around it is affluent.” The bank added, “The tax benefits can be remarkable.”

The Swiss bank UBS is raising funds from its “ultra high net worth” clients — requiring in some cases that they have at least $50 million in investable assets — for developments in New York and Connecticut. The projects include a 23-story retail and office building in Downtown Brooklyn and an upscale apartment building in New Rochelle, N.Y., with a yoga studio and 24-hour valet parking. There is even a spa — for residents’ pets.

Other companies have set up subscription databases showing which zones have the highest incomes and fastest-growing populations to help investors steer their money to the most lucrative and least risky destinations.

“The current system is clearly driving capital to places that are known to be winners,” said Christopher A. Coes, vice president at Smart Growth America, a nonprofit group that encourages investments in American cities.

This street in New Orleans became part of an opportunity zone after a hotel in the Virgin chain had already been planned there.CreditAkasha Rabut for The New York Times

The Warehouse District of New Orleans is one of the city’s trendiest neighborhoods. Some of the area’s hottest restaurants — as well as a new one dishing out shrimp tempura tacos — are here. So are hipster barbershops. Boutique hotels spill well-heeled tourists onto the red brick sidewalks. High-end coffee shops are packed with young people buried in their MacBooks.

And it is getting hotter. The sounds of heavy-duty equipment heaving steel or pouring cement are audible across the neighborhood.

In other words, in a city grappling with acute poverty, this is not a neighborhood that especially needs a generous new tax break to lure luxury lodging. Yet state officials have established an opportunity zone here.

That decision benefited businesses already operating or planned for the district. One of those is a 225-room hotel, part of Richard Branson’s Virgin Hotels chain, whose plans were unveiled a year before Mr. Trump signed the tax law. Its location inside an opportunity zone meant investors could earn greater profits than they otherwise would have, by financing the project with tax-advantaged money.

Changing Incomes in New Orleans

Early opportunity zone development is often happening in neighborhoods where income was already rising, not in struggling areas.

Westlake Legal Group la-map-Artboard_1 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

(under construction)

Hoffman Triangle

Warehouse District

NEW ORLEANS

Garden

District

Mississippi River

Westlake Legal Group la-map-Artboard_1_copy How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

Hoffman

Triangle

Warehouse

District

NEW ORLEANS

Mississippi River

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

Those investors include Mr. Scaramucci, who briefly served as White House communications director in 2017 and has claimed credit for helping to create the opportunity-zone plan. “We got to get into this business because this will be transformative to the United States,” he said recently.

Mr. Scaramucci’s investment firm, SkyBridge Capital, has raised more than $50 million in capital gains from outside investors, and most of it is being used to finance the hotel, according to Brett S. Messing, the company’s president. He said the hotel was likely to be the first of numerous opportunity-zone projects financed by SkyBridge.

The Virgin Hotels construction site in New Orleans. Because of the zone, the 225-room hotel can be financed with tax-advantaged money.CreditAkasha Rabut for The New York Times

Less than two miles away is the poorest opportunity zone in Louisiana — and one of the poorest nationwide. The zone includes the Hoffman Triangle neighborhood, where the average household earns less than $15,000 per year. Block after block, streets are lined with dilapidated, narrow homes, many of them boarded up. On a recent afternoon, one of them was serving as a work site for prostitutes.

City officials, including the head of economic development for New Orleans, said they were not aware of any opportunity-zone projects in this neighborhood.

Terrance Ross, a construction worker who has lived in the area for 20 years, is familiar with the building boom underway in the Warehouse District.

“Why is the federal government putting money where money is already accumulating?” he asked, lighting a cigarette and standing across the street from an abandoned house. “This neighborhood just needs some tender loving care.”

Similar scenes are playing out in opportunity zones across the United States: The federal government is subsidizing luxury developments — often within walking distance of economically distressed communities — that were in the works before Mr. Trump was even elected president.

In Houston, construction recently started on the Preston, with 373 “luxury for rent” apartments as well as a “skydeck” and a resort-style swimming pool. The development is being financed by the investors in Cresset, a multibillion-dollar asset management firm, including one of its founders, Avy Stein.

Changing Incomes in Houston

Early opportunity zone investment is coming to Market Square, already a site of high-end developments and major income growth.

Westlake Legal Group houston-map-Artboard_1 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Market Square is home to three recent luxury developments.

Greater

Fifth Ward

Downtown

Houston

Fourth Ward

Opportunity zones

South

Central Houston

University

of Houston

Rice

University

Houston

Zoo

Westlake Legal Group houston-map-Artboard_1_copy How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Market Square is home to three recent luxury developments.

Downtown

Houston

Fourth Ward

South

Central Houston

University

of Houston

Houston

Zoo

Opportunity zones

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

And in downtown Portland, Ore., the developers of a 35-story tower with a hotel, condos and office space are hoping to raise up to $150 million in opportunity-zone money to pay for the project. Condos will go for as much as $7.5 million each. The hotel is a Ritz-Carlton.

Exhibits at Mr. Scaramucci’s investment conference in Las Vegas, where opportunity zones were discussed as the next big thing.CreditBridget Bennett for The New York Times

Club music blared from speakers as millionaires and billionaires — and the money managers, lawyers, accountants and other professionals looking to make money off all this wealth — milled around a pool and private cabanas at the Bellagio hotel in Las Vegas.

They were at an annual investment conference to talk about the next big thing. This year, that thing was opportunity zones, which were the focus of five panel discussions.

The Las Vegas event was hosted by Mr. Scaramucci. Among the attendees was Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team. At one point he posed and smiled for a photo with Mr. Scaramucci and his wife.

“OZ are super hot right now,” Mr. Cuban said in an email after the event, adding that he had recently bought a property in an opportunity zone, but had not decided yet if he would use the tax break. “Every major investor I know has been pitched a property or fund within an OZ.”

The feeding frenzy is not confined to rich individuals. Lawyers, accountants, wealth managers and consultants are enjoying a gusher of new work — and raking in fees — helping clients structure deals with the maximum tax savings.

Real estate lawyers like Brad A. Molotsky are billing hundreds of extra hours as they field calls from eager investors. One day in June, Mr. Molotsky juggled clients who wanted to invest in $500 million worth of opportunity-zone projects.

“I am just one guy, and that was from just two meetings,” said Mr. Molotsky, who works in New Jersey for the law firm Duane Morris. He has completed more than 20 opportunity-zone deals, he said, and has dozens more in the pipeline.

The night after Mr. Scaramucci’s pool party, more festivities were underway on the other end of the Las Vegas Strip — part of a separate event also focused on opportunity zones. One party was at the Soviet-themed Red Square restaurant. Inside, an investor handed out postcards with photographs of buildings he wanted to buy in opportunity zones.

At another open-bar soiree, a man in a navy suit and a cowboy hat wandered the crowd, drink in hand. Attached to the top of his hat was a large sign. It beckoned: “Looking for OZ Funds.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich

NEW ORLEANS — President Trump has portrayed America’s cities as wastelands, ravaged by crime and homelessness, infested by rats.

But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans.

Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.

Former Gov. Chris Christie of New Jersey; Richard LeFrak, a New York real estate titan who is close to the president; Anthony Scaramucci, a former White House aide who recently had a falling out with Mr. Trump; and the family of Jared Kushner, Mr. Trump’s son-in-law and senior adviser, all are looking to profit from what is shaping up to be a once-in-a-generation bonanza for elite investors.

The stated goal of the tax benefit — tucked into the Republicans’ 2017 tax-cut legislation — was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs.

The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones. Any profits from those projects can avoid federal taxes altogether.

“Opportunity zones, hottest thing going, providing massive new incentives for investment and job creation in distressed communities,” Mr. Trump declared at a recent rally in Cincinnati.

Instead, billions of untaxed investment profits are beginning to pour into high-end apartment buildings and hotels, storage facilities that employ only a handful of workers, and student housing in bustling college towns, among other projects.

Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods.

ImageWestlake Legal Group 31ozbonanza8-articleLarge How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Among those raising money for opportunity-zone investments are Anthony Scaramucci, center, the founder of SkyBridge Capital, and Chris Christie, right, the former governor of New Jersey.CreditBridget Bennett for The New York Times

Mr. Scaramucci’s development in New Orleans offers a portrait of how the tax break works. His investment company, SkyBridge Capital, is using the so-called opportunity zone initiative to help build a hotel, outfitted with an opulent restaurant and a rooftop pool, in the city’s trendy Warehouse District.

The tax benefit also is helping finance the construction of a 46-story, glass-wrapped apartment tower — amenities include a yoga lawn and a pool surrounded by cabanas and daybeds — in a Houston neighborhood already brimming with new projects aimed at the wealthy.

And in Miami’s hot Design District, where commercial real estate prices have nearly tripled in the last decade, the tax break is set to be used for a ritzy new office tower with a landscaped roof terrace.

Some proponents of opportunity zones note that money is already flowing into downtrodden communities like Birmingham, Ala., and Erie, Pa. They argue that more funds will follow. And they note that because no data exists on where investments are being made, it is impossible to quantify the benefits going to the wealthy versus the poor.

“The early wave, that’s not what you judge,” said John Lettieri, president of the Economic Innovation Group, an organization that lobbied for the establishment of opportunity zones.

But leaders of groups that work in cities and rural areas to combat poverty say they are disappointed with how it is playing out so far.

“Capital is going to flow to the lowest-risk, highest-return environment,” said Aaron T. Seybert, the social investment officer at the Kresge Foundation, a community-development group in Troy, Mich., that supported the opportunity-zone effort.

“Perhaps 95 percent of this is doing no good for people we care about.”

Mr. Scaramucci, left, shaking hands with John F. Kelly, the former White House chief of staff. Mr. Scaramucci is using opportunity-zone advantages to help build a hotel in a trendy section of New Orleans.CreditBridget Bennett for The New York Times

The opportunity-zone tax break was targeted at the trillions of dollars of capital gains held by rich Americans and their companies: profits from investments in the stock market, real estate and other businesses, even short-term trades by hedge funds. When investors sell those assets, they can incur tax bills of up to 41 percent.

Sean Parker, an early backer of Facebook, helped come up with the idea of pairing a capital-gains tax break with an incentive to invest in distressed neighborhoods. “When you are a founder of Facebook, and you own a lot of stock,” Mr. Parker said at a recent opportunity-zone conference, “you spend a lot of time thinking about capital gains.”

Starting in 2013, Mr. Parker bankrolled a Capitol Hill lobbying effort to pitch the idea to members of Congress. That effort was run through his Economic Innovation Group. In addition to Mr. Parker, the group’s backers included Dan Gilbert, the billionaire founder of Quicken Loans, and Ted Ullyot, the former general counsel of Facebook.

The plan won the support of Senators Cory Booker, Democrat of New Jersey, and Tim Scott, Republican of South Carolina. When Congress, at Mr. Trump’s urging, began discussing major changes to the federal tax code in 2017, Mr. Parker’s idea had a chance to become reality.

Mr. Scott, who sponsored a version of the opportunity-zone legislation that was later incorporated into the broader tax cut package, said it was “for American people stuck, sometimes trapped, in a place where it seems like the lights grow dimmer, and the future does, too.”

“Let’s turn those lights on and make the future bright,” he added.

Confined to six pages in the 185-page tax bill, the provision can significantly increase the profits investors reap on real estate and other transactions.

It allows investors to defer for up to seven years any capital gains taxes on the money they invest in opportunity zones. (That deferral is valuable because it allows people to invest a larger sum upfront, potentially generating more profits over time.) After 10 years, the investor can cash out — by selling the opportunity-zone real estate, for example — and not owe any taxes on the profits.

Over a decade, those dual incentives could increase an investor’s returns by 70 percent, according to an analysis by Novogradac, an accounting firm.

“We are very, very excited about the potential,” the president’s daughter Ivanka Trump said last year at an event celebrating Mr. Parker’s role in creating opportunity zones. “The whole White House obviously is behind the effort. The whole administration.”

The opportunity zones, focused on low-income census tracts, were drawn by officials in each state, as well as in Washington, D.C., and Puerto Rico. Last year, the Treasury Department approved roughly 8,800 such zones. (The White House and Treasury declined to make senior officials available to discuss the program.)

Nearly a third of the 31 million people who live in the zones are considered poor — almost double the national poverty rate. Yet there are plenty of affluent areas inside those poor census tracts. And, as investors would soon realize, some of the zones were not low income at all.

The Preston is financed by the investors in Cresset, a multibillion-dollar asset management firm.CreditBrandon Thibodeaux for The New York Times

The Harvard Club of New York City, in Midtown Manhattan, is the embodiment of America’s old-money elite. Crimson-jacketed waiters serve members who are watched over by oil portraits of elite alumni.

One recent morning, financial advisers representing several dozen of America’s richest dynasties — advisers to the Pritzker and Soros families were listed as attendees — crowded into a drab meeting room on the club’s third floor.

The advisers were there to see Daniel Kowalski, a top aide to Treasury Secretary Steven Mnuchin and the Trump administration’s point person for the opportunity-zone rules. Mr. Kowalski is barnstorming the country, bouncing from one conference to the next, explaining to real estate investors and developers how to take advantage of the new rules.

Mr. Kowalski was an aide to the Trump campaign, where he worked for the White House policy adviser Stephen Miller. Before that, he was an aide to Jeff Sessions when Mr. Sessions was on the Senate Budget Committee.

[The Trump associates benefiting from a tax break for poor communities.]

At the Harvard Club, he dived into an explanation of how opportunity zones work — and for whom they work. “The audience for opportunity zones is inherently fairly small because it’s limited to capital-gains income, which is why I wanted to come and talk to this group,” he told the room of advisers.

That audience is small indeed: Only 7 percent of Americans report taxable capital gains, and nearly two-thirds of that income was reported by people with a total annual income of $1 million or more, according to I.R.S. data.

Yet this is a vital constituency, since the success of the opportunity-zone program will hinge largely on how much money investors kick in. That is why the Trump administration — and Mr. Kowalski in particular — is promoting the tax break on Wall Street.

“I have served a little bit as a middle man between the business community and the I.R.S.,” he said at another conference a few weeks later.

More than 200 opportunity-zone funds have been established by banks like Goldman Sachs and major real estate companies, including CIM Group of Los Angeles, which has previously been a partner with the Trump and Kushner families on projects. Those funds have said their goal was to raise a total of nearly $57 billion.

The law does not require public disclosure of who are taking advantage of the initiative or how they are deploying their funds. Among those who have invested money or said they intend to are Mr. Kohl, a founder of the department store chain that bears his name; Steve Case, co-founder of AOL; Alexander Bhathal, part owner of the Sacramento Kings basketball team; and Richard Forman, the former owner of the Forman Mills chain of clothing stores, according to interviews and other public statements.

Daniel Kowalski, the Trump administration’s point person for opportunity-zone rules, speaking at a Washington forum about them in June.CreditMelissa Lyttle for The New York Times

Many others are lesser-known business executives who recently sold small companies or real estate and are looking for ways to avoid large tax bills.

Paul DeMoret, for example, recently sold his auto-industry software company in Oregon. He said he was using some of those capital gains to help finance a Courtyard by Marriott in Winston-Salem, N.C., and an apartment building in Tempe, Ariz., among other projects in opportunity zones. He is making the investments through a private equity firm, Virtua Partners.

The tax break is largely benefiting the real estate industry — where Mr. Trump made his fortune and still has extensive business interests — and it is luring people with personal or professional connections to the president.

Mr. Christie, a onetime adviser to Mr. Trump, has raised money for opportunity-zone investments including an apartment building in Hackensack, N.J., and a self-storage center in Connecticut.

Cadre, an investment company co-founded by Mr. Kushner and his brother, Joshua, is raising hundreds of millions of dollars that it hopes to use on opportunity-zone projects. The company is eyeing neighborhoods in Savannah, Ga., Dallas, Los Angeles and Nashville that are expected to grow larger and wealthier in coming years. Jared Kushner has a stake in Cadre worth up to $50 million, according to his most recent financial disclosure.

Mr. LeFrak, a longtime confidant of Mr. Trump’s and a major campaign donor, is building a luxury residential community in the middle of an opportunity zone in Miami. (It is unclear how much of the development’s funding will end up being tax advantaged.)

Not far away in the Design District, Daniel Lebensohn is planning to build his high-end office tower. Mr. Lebensohn previously joined the Trump Organization to sell luxury condominiums at the Trump Hollywood complex north of Miami.

And Mr. Kushner’s family company directly owns or is in the process of buying at least a dozen properties in New York, New Jersey and Florida that are in opportunity zones. They include a pair in Miami, where Kushner Companies plans to build a 393-apartment luxury high rise with sweeping views of Biscayne Bay, according to a company presentation for potential investors.

A representative for the Kushner family confirmed that it was considering opportunity-zone funding for some developments, but said it would probably not use the funding for the Miami projects.

Backers of the opportunity-zone program say luxury projects are the easiest to finance, which is why those have been happening first. Over the long run, they say, those deals will be eclipsed by ones that produce social benefits in low-income areas.

At least some struggling neighborhoods are already starting to receive investments.

In Birmingham, for example, a developer is using opportunity-zone funds to convert a building, vacant for decades, into 140 apartments primarily aimed at the local work force.

“We are seeing projects that are being announced here in Alabama that would not have happened otherwise,” said Alex Flachsbart, founder of Opportunity Alabama, which is trying to steer investors to economically struggling neighborhoods.

Similar projects are getting underway in Erie, Cleveland and Charlottesville, Va. Goldman Sachs is using some of its capital gains — profits on the company’s own investments — in opportunity zones, including $364 million for mixed-income housing developments in Salt Lake City, Baltimore and other cities.

Mr. Case, the AOL co-founder, and Derrick Morgan, a former professional football player, are among those who have announced that they will invest in opportunity-zone projects that are designed to address clear social and economic problems.

As he announced his retirement from the Tennessee Titans in July, Mr. Morgan wrote on Instagram that his goal would be to “create more opportunities for those who are underserved and overlooked” in communities like Coatesville, Pa., where he went to high school.

Emanuel J. Friedman, a hedge fund manager, is using some of his capital gains and money he has raised from others to build 11 warehouses in rural Jasper County, S.C., near the Savannah seaport. The warehouses won’t employ many people, but he said the jobs would offer higher wages than hotel housekeeping positions at the nearby Hilton Head resort, where many area residents now work.

“Of course it will make a difference,” Mr. Friedman said. “It is mind-boggling. It is the best thing I have ever done.”

The developers of the Sole Mia project in North Miami, Fla., urged a local official to nominate the area as an opportunity zone and are now considering ways to take advantage of the status.CreditScott McIntyre for The New York Times

But even supporters of the initiative agree that the bulk of the opportunity-zone money is going to places that do not need the help, while many poorer communities are so far empty-handed.

Some opportunity zones that were classified as low income based on census data from several years ago have since gentrified. Others that remain poor over all have large numbers of wealthy households.

Number of Opportunity Zones by Median Household Income

More than 7 percent of opportunity zones had household incomes above the median census tract in 2017. Investors are focusing on projects in these neighborhoods.

Westlake Legal Group oz-distribution-335 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$137,147

Long Island City,

Queens

$98,508

Market Square,

Houston

Westlake Legal Group oz-distribution-600 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$91,397

Gowanus,

Brooklyn

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Westlake Legal Group oz-distribution-900 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$91,397

Gowanus,

Brooklyn

$77,692

Fishtown,

Philadelphia

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Source: American Community Survey

By Blacki Migliozzi and Juliette Love

And nearly 200 of the 8,800 federally designated opportunity zones are adjacent to poor areas but are not themselves considered low income.

Under the law, up to 5 percent of the zones did not need to be poor. The idea was to enable governors to draw opportunity zones in ways that would include projects or businesses just outside poor census tracts, potentially creating jobs for low-income people. In addition, states could designate whole sections of cities or rural areas that would be targeted for investment, including some higher-income census tracts.

In some cases, developers have lobbied state officials to include specific plots of land inside opportunity zones.

In Miami, for example, Mr. LeFrak — who donated nearly $500,000 to Mr. Trump’s campaign and inauguration and is personally close to the president — is working with a Florida partner on a 183-acre project that is set to include 12 residential towers and eight football fields’ worth of retail and commercial space.

In spring 2018, as they planned the so-called Sole Mia project, Mr. LeFrak’s executives encouraged city officials in North Miami to nominate the area around the site as an opportunity zone, according to Larry M. Spring, the city manager. They did so, and the Treasury Department made the designation official.

The Far West Side of Manhattan is part of an opportunity zone — even as high-end towers have been replacing run-down apartment buildings and more than 15 percent of households reported income of $200,000 or more in 2017, according to an analysis by Webster Pacific, a consulting firm. This is the new home of Pershing Square Capital Management, the prominent hedge fund run by the billionaire Bill Ackman.

Mr. Ackman is trying to find tenants for 80,000 square feet of unused office space in his fund’s building, which has a Jaguar dealership on the ground floor. He said he was using its location inside an opportunity zone as a lure.

That is because investors can use their capital gains to invest not only in real estate but also in businesses inside opportunity zones. A company that sets up shop inside Mr. Ackman’s building therefore would be eligible to accept tax-advantaged opportunity-zone money.

One of the Sole Mia partners is Richard LeFrak, who donated nearly $500,000 to President Trump’s campaign and inauguration.CreditScott McIntyre for The New York Times

Financial institutions are not even trying to make it look as if their opportunity-zone investments were intended to benefit needy communities.

CBRE, one of the country’s largest real estate companies, is seeking opportunity-zone funding for an apartment building in Alexandria, Va., which CBRE is pitching to prospective investors as “one of the region’s most affluent locations.”

JPMorgan Chase is raising money to build housing targeting students in College Park, Md., near the University of Maryland. (Because many students do not have jobs, census data often wrongly suggests that college towns are poor neighborhoods.)

In marketing materials, JPMorgan noted that while College Park “qualifies as low income due to the student population, the area around it is affluent.” The bank added, “The tax benefits can be remarkable.”

The Swiss bank UBS is raising funds from its “ultra high net worth” clients — requiring in some cases that they have at least $50 million in investable assets — for developments in New York and Connecticut. The projects include a 23-story retail and office building in Downtown Brooklyn and an upscale apartment building in New Rochelle, N.Y., with a yoga studio and 24-hour valet parking. There is even a spa — for residents’ pets.

Other companies have set up subscription databases showing which zones have the highest incomes and fastest-growing populations to help investors steer their money to the most lucrative and least risky destinations.

“The current system is clearly driving capital to places that are known to be winners,” said Christopher A. Coes, vice president at Smart Growth America, a nonprofit group that encourages investments in American cities.

This street in New Orleans became part of an opportunity zone after a hotel in the Virgin chain had already been planned there.CreditAkasha Rabut for The New York Times

The Warehouse District of New Orleans is one of the city’s trendiest neighborhoods. Some of the area’s hottest restaurants — as well as a new one dishing out shrimp tempura tacos — are here. So are hipster barbershops. Boutique hotels spill well-heeled tourists onto the red brick sidewalks. High-end coffee shops are packed with young people buried in their MacBooks.

And it is getting hotter. The sounds of heavy-duty equipment heaving steel or pouring cement are audible across the neighborhood.

In other words, in a city grappling with acute poverty, this is not a neighborhood that especially needs a generous new tax break to lure luxury lodging. Yet state officials have established an opportunity zone here.

That decision benefited businesses already operating or planned for the district. One of those is a 225-room hotel, part of Richard Branson’s Virgin Hotels chain, whose plans were unveiled a year before Mr. Trump signed the tax law. Its location inside an opportunity zone meant investors could earn greater profits than they otherwise would have, by financing the project with tax-advantaged money.

Changing Incomes in New Orleans

Early opportunity zone development is often happening in neighborhoods where income was already rising, not in struggling areas.

Westlake Legal Group la-map-Artboard_1 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

(under construction)

Hoffman Triangle

Warehouse District

NEW ORLEANS

Garden

District

Mississippi River

Westlake Legal Group la-map-Artboard_1_copy How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

Hoffman

Triangle

Warehouse

District

NEW ORLEANS

Mississippi River

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

Those investors include Mr. Scaramucci, who briefly served as White House communications director in 2017 and has claimed credit for helping to create the opportunity-zone plan. “We got to get into this business because this will be transformative to the United States,” he said recently.

Mr. Scaramucci’s investment firm, SkyBridge Capital, has raised more than $50 million in capital gains from outside investors, and most of it is being used to finance the hotel, according to Brett S. Messing, the company’s president. He said the hotel was likely to be the first of numerous opportunity-zone projects financed by SkyBridge.

The Virgin Hotels construction site in New Orleans. Because of the zone, the 225-room hotel can be financed with tax-advantaged money.CreditAkasha Rabut for The New York Times

Less than two miles away is the poorest opportunity zone in Louisiana — and one of the poorest nationwide. The zone includes the Hoffman Triangle neighborhood, where the average household earns less than $15,000 per year. Block after block, streets are lined with dilapidated, narrow homes, many of them boarded up. On a recent afternoon, one of them was serving as a work site for prostitutes.

City officials, including the head of economic development for New Orleans, said they were not aware of any opportunity-zone projects in this neighborhood.

Terrance Ross, a construction worker who has lived in the area for 20 years, is familiar with the building boom underway in the Warehouse District.

“Why is the federal government putting money where money is already accumulating?” he asked, lighting a cigarette and standing across the street from an abandoned house. “This neighborhood just needs some tender loving care.”

Similar scenes are playing out in opportunity zones across the United States: The federal government is subsidizing luxury developments — often within walking distance of economically distressed communities — that were in the works before Mr. Trump was even elected president.

In Houston, construction recently started on the Preston, with 373 “luxury for rent” apartments as well as a “skydeck” and a resort-style swimming pool. The development is being financed by the investors in Cresset, a multibillion-dollar asset management firm, including one of its founders, Avy Stein.

Changing Incomes in Houston

Early opportunity zone investment is coming to Market Square, already a site of high-end developments and major income growth.

Westlake Legal Group houston-map-Artboard_1 How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Market Square is home to three recent luxury developments.

Greater

Fifth Ward

Downtown

Houston

Fourth Ward

Opportunity zones

South

Central Houston

University

of Houston

Rice

University

Houston

Zoo

Westlake Legal Group houston-map-Artboard_1_copy How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Market Square is home to three recent luxury developments.

Downtown

Houston

Fourth Ward

South

Central Houston

University

of Houston

Houston

Zoo

Opportunity zones

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

And in downtown Portland, Ore., the developers of a 35-story tower with a hotel, condos and office space are hoping to raise up to $150 million in opportunity-zone money to pay for the project. Condos will go for as much as $7.5 million each. The hotel is a Ritz-Carlton.

Exhibits at Mr. Scaramucci’s investment conference in Las Vegas, where opportunity zones were discussed as the next big thing.CreditBridget Bennett for The New York Times

Club music blared from speakers as millionaires and billionaires — and the money managers, lawyers, accountants and other professionals looking to make money off all this wealth — milled around a pool and private cabanas at the Bellagio hotel in Las Vegas.

They were at an annual investment conference to talk about the next big thing. This year, that thing was opportunity zones, which were the focus of five panel discussions.

The Las Vegas event was hosted by Mr. Scaramucci. Among the attendees was Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team. At one point he posed and smiled for a photo with Mr. Scaramucci and his wife.

“OZ are super hot right now,” Mr. Cuban said in an email after the event, adding that he had recently bought a property in an opportunity zone, but had not decided yet if he would use the tax break. “Every major investor I know has been pitched a property or fund within an OZ.”

The feeding frenzy is not confined to rich individuals. Lawyers, accountants, wealth managers and consultants are enjoying a gusher of new work — and raking in fees — helping clients structure deals with the maximum tax savings.

Real estate lawyers like Brad A. Molotsky are billing hundreds of extra hours as they field calls from eager investors. One day in June, Mr. Molotsky juggled clients who wanted to invest in $500 million worth of opportunity-zone projects.

“I am just one guy, and that was from just two meetings,” said Mr. Molotsky, who works in New Jersey for the law firm Duane Morris. He has completed more than 20 opportunity-zone deals, he said, and has dozens more in the pipeline.

The night after Mr. Scaramucci’s pool party, more festivities were underway on the other end of the Las Vegas Strip — part of a separate event also focused on opportunity zones. One party was at the Soviet-themed Red Square restaurant. Inside, an investor handed out postcards with photographs of buildings he wanted to buy in opportunity zones.

At another open-bar soiree, a man in a navy suit and a cowboy hat wandered the crowd, drink in hand. Attached to the top of his hat was a large sign. It beckoned: “Looking for OZ Funds.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich

NEW ORLEANS — President Trump has portrayed America’s cities as wastelands, ravaged by crime and homelessness, infested by rats.

But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans.

Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.

Former Gov. Chris Christie of New Jersey; Richard LeFrak, a New York real estate titan who is close to the president; Anthony Scaramucci, a former White House aide who recently had a falling out with Mr. Trump; and the family of Jared Kushner, Mr. Trump’s son-in-law and senior adviser, all are looking to profit from what is shaping up to be a once-in-a-generation bonanza for elite investors.

The stated goal of the tax benefit — tucked into the Republicans’ 2017 tax-cut legislation — was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs.

The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones. Any profits from those projects can avoid federal taxes altogether.

“Opportunity zones, hottest thing going, providing massive new incentives for investment and job creation in distressed communities,” Mr. Trump declared at a recent rally in Cincinnati.

Instead, billions of untaxed investment profits are beginning to pour into high-end apartment buildings and hotels, storage facilities that employ only a handful of workers, and student housing in bustling college towns, among other projects.

Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods.

ImageWestlake Legal Group 31ozbonanza8-articleLarge How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Among those raising money for opportunity-zone investments are Anthony Scaramucci, center, the founder of SkyBridge Capital, and Chris Christie, right, the former governor of New Jersey.CreditBridget Bennett for The New York Times

Mr. Scaramucci’s development in New Orleans offers a portrait of how the tax break works. His investment company, SkyBridge Capital, is using the so-called opportunity zone initiative to help build a hotel, outfitted with an opulent restaurant and a rooftop pool, in the city’s trendy Warehouse District.

The tax benefit also is helping finance the construction of a 46-story, glass-wrapped apartment tower — amenities include a yoga lawn and a pool surrounded by cabanas and daybeds — in a Houston neighborhood already brimming with new projects aimed at the wealthy.

And in Miami’s hot Design District, where commercial real estate prices have nearly tripled in the last decade, the tax break is set to be used for a ritzy new office tower with a landscaped roof terrace.

Some proponents of opportunity zones note that money is already flowing into downtrodden communities like Birmingham, Ala., and Erie, Pa. They argue that more funds will follow.

“The early wave, that’s not what you judge,” said John Lettieri, president of the Economic Innovation Group, an organization that lobbied for the establishment of opportunity zones.

But leaders of groups that work in cities and rural areas to combat poverty say they are disappointed with how it is playing out so far.

“Capital is going to flow to the lowest-risk, highest-return environment,” said Aaron T. Seybert, the social investment officer at the Kresge Foundation, a community-development group in Troy, Mich., that supported the opportunity-zone effort.

“Perhaps 95 percent of this is doing no good for people we care about.”

Mr. Scaramucci, left, shaking hands with John F. Kelly, the former White House chief of staff. Mr. Scaramucci is using opportunity-zone advantages to help build a hotel in a trendy section of New Orleans.CreditBridget Bennett for The New York Times

The opportunity-zone tax break was targeted at the trillions of dollars of capital gains held by rich Americans and their companies: profits from investments in the stock market, real estate and other businesses, even short-term trades by hedge funds. When investors sell those assets, they can incur tax bills of up to 41 percent.

Sean Parker, an early backer of Facebook, helped come up with the idea of pairing a capital-gains tax break with an incentive to invest in distressed neighborhoods. “When you are a founder of Facebook, and you own a lot of stock,” Mr. Parker said at a recent opportunity-zone conference, “you spend a lot of time thinking about capital gains.”

Starting in 2013, Mr. Parker bankrolled a Capitol Hill lobbying effort to pitch the idea to members of Congress. That effort was run through his Economic Innovation Group. In addition to Mr. Parker, the group’s backers included Dan Gilbert, the billionaire founder of Quicken Loans, and Ted Ullyot, the former general counsel of Facebook.

The plan won the support of Senators Cory Booker, Democrat of New Jersey, and Tim Scott, Republican of South Carolina. When Congress, at Mr. Trump’s urging, began discussing major changes to the federal tax code in 2017, Mr. Parker’s idea had a chance to become reality.

Mr. Scott, who sponsored a version of the opportunity-zone legislation that was later incorporated into the broader tax cut package, said it was “for American people stuck, sometimes trapped, in a place where it seems like the lights grow dimmer, and the future does, too.”

“Let’s turn those lights on and make the future bright,” he added.

Confined to six pages in the 185-page tax bill, the provision can significantly increase the profits investors reap on real estate and other transactions.

It allows investors to defer for up to seven years any capital gains taxes on the money they invest in opportunity zones. (That deferral is valuable because it allows people to invest a larger sum upfront, potentially generating more profits over time.) After 10 years, the investor can cash out — by selling the opportunity-zone real estate, for example — and not owe any taxes on the profits.

Over a decade, those dual incentives could increase an investor’s returns by 70 percent, according to an analysis by Novogradac, an accounting firm.

“We are very, very excited about the potential,” the president’s daughter Ivanka Trump said last year at an event celebrating Mr. Parker’s role in creating opportunity zones. “The whole White House obviously is behind the effort. The whole administration.”

The opportunity zones, focused on low-income census tracts, were drawn by officials in each state, as well as in Washington, D.C., and Puerto Rico. Last year, the Treasury Department approved roughly 8,800 such zones. (The White House and Treasury declined to make senior officials available to discuss the program.)

Nearly a third of the 31 million people who live in the zones are considered poor — almost double the national poverty rate. Yet there are plenty of affluent areas inside those poor census tracts. And, as investors would soon realize, some of the zones were not low income at all.

The Preston is financed by the investors in Cresset, a multibillion-dollar asset management firm.CreditBrandon Thibodeaux for The New York Times

The Harvard Club of New York City, in Midtown Manhattan, is the embodiment of America’s old-money elite. Crimson-jacketed waiters serve members who are watched over by oil portraits of elite alumni.

One recent morning, financial advisers representing several dozen of America’s richest dynasties — advisers to the Pritzker and Soros families were listed as attendees — crowded into a drab meeting room on the club’s third floor.

The advisers were there to see Daniel Kowalski, a top aide to Treasury Secretary Steven Mnuchin and the Trump administration’s point person for the opportunity-zone rules. Mr. Kowalski is barnstorming the country, bouncing from one conference to the next, explaining to real estate investors and developers how to take advantage of the new rules.

Mr. Kowalski was an aide to the Trump campaign, where he worked for the White House policy adviser Stephen Miller. Before that, he was an aide to Jeff Sessions when Mr. Sessions was on the Senate Budget Committee.

[The Trump associates benefiting from a tax break for poor communities.]

At the Harvard Club, he dived into an explanation of how opportunity zones work — and for whom they work. “The audience for opportunity zones is inherently fairly small because it’s limited to capital-gains income, which is why I wanted to come and talk to this group,” he told the room of advisers.

That audience is small indeed: Only 7 percent of Americans report taxable capital gains, and nearly two-thirds of that income was reported by people with a total annual income of $1 million or more, according to I.R.S. data.

Yet this is a vital constituency, since the success of the opportunity-zone program will hinge largely on how much money investors kick in. That is why the Trump administration — and Mr. Kowalski in particular — is promoting the tax break on Wall Street.

“I have served a little bit as a middle man between the business community and the I.R.S.,” he said at another conference a few weeks later.

More than 200 opportunity-zone funds have been established by banks like Goldman Sachs and major real estate companies, including CIM Group of Los Angeles, which has previously been a partner with the Trump and Kushner families on projects. Those funds have said their goal was to raise a total of nearly $57 billion.

The law does not require public disclosure of who are taking advantage of the initiative or how they are deploying their funds. Among those who have invested money or said they intend to are Mr. Kohl, a founder of the department store chain that bears his name; Steve Case, co-founder of AOL; Alexander Bhathal, part owner of the Sacramento Kings basketball team; and Richard Forman, the former owner of the Forman Mills chain of clothing stores, according to interviews and other public statements.

Daniel Kowalski, the Trump administration’s point person for opportunity-zone rules, speaking at a Washington forum about them in June.CreditMelissa Lyttle for The New York Times

Many others are lesser-known business executives who recently sold small companies or real estate and are looking for ways to avoid large tax bills.

Paul DeMoret, for example, recently sold his auto-industry software company in Oregon. He said he was using some of those capital gains to help finance a Courtyard by Marriott in Winston-Salem, N.C., and an apartment building in Tempe, Ariz., among other projects in opportunity zones. He is making the investments through a private equity firm, Virtua Partners.

The tax break is largely benefiting the real estate industry — where Mr. Trump made his fortune and still has extensive business interests — and it is luring people with personal or professional connections to the president.

Mr. Christie, a onetime adviser to Mr. Trump, has raised money for opportunity-zone investments including an apartment building in Hackensack, N.J., and a self-storage center in Connecticut.

Cadre, an investment company co-founded by Mr. Kushner and his brother, Joshua, is raising hundreds of millions of dollars that it hopes to use on opportunity-zone projects. The company is eyeing neighborhoods in Savannah, Ga., Dallas, Los Angeles and Nashville that are expected to grow larger and wealthier in coming years. Jared Kushner has a stake in Cadre worth up to $50 million, according to his most recent financial disclosure.

Mr. LeFrak, a longtime confidant of Mr. Trump’s and a major campaign donor, is building a luxury residential community in the middle of an opportunity zone in Miami. (It is unclear how much of the development’s funding will end up being tax advantaged.)

Not far away in the Design District, Daniel Lebensohn is planning to build his high-end office tower. Mr. Lebensohn previously joined the Trump Organization to sell luxury condominiums at the Trump Hollywood complex north of Miami.

And Mr. Kushner’s family company directly owns or is in the process of buying at least a dozen properties in New York, New Jersey and Florida that are in opportunity zones. They include a pair in Miami, where Kushner Companies plans to build a 393-apartment luxury high rise with sweeping views of Biscayne Bay, according to a company presentation for potential investors.

A representative for the Kushner family confirmed that it was considering opportunity-zone funding for some developments, but said it would probably not use the funding for the Miami projects.

Backers of the opportunity-zone program say luxury projects are the easiest to finance, which is why those have been happening first. Over the long run, they say, those deals will be eclipsed by ones that produce social benefits in low-income areas.

At least some struggling neighborhoods are already starting to receive investments.

In Birmingham, for example, a developer is using opportunity-zone funds to convert a building, vacant for decades, into 140 apartments primarily aimed at the local work force.

“We are seeing projects that are being announced here in Alabama that would not have happened otherwise,” said Alex Flachsbart, founder of Opportunity Alabama, which is trying to steer investors to economically struggling neighborhoods.

Similar projects are getting underway in Erie, Cleveland and Charlottesville, Va. Goldman Sachs is using some of its capital gains — profits on the company’s own investments — in opportunity zones, including $364 million for mixed-income housing developments in Salt Lake City, Baltimore and other cities.

Mr. Case, the AOL co-founder, and Derrick Morgan, a former professional football player, are among those who have announced that they will invest in opportunity-zone projects that are designed to address clear social and economic problems.

As he announced his retirement from the Tennessee Titans in July, Mr. Morgan wrote on Instagram that his goal would be to “create more opportunities for those who are underserved and overlooked” in communities like Coatesville, Pa., where he went to high school.

Emanuel J. Friedman, a hedge fund manager, is using some of his capital gains and money he has raised from others to build 11 warehouses in rural Jasper County, S.C., near the Savannah seaport. The warehouses won’t employ many people, but he said the jobs would offer higher wages than hotel housekeeping positions at the nearby Hilton Head resort, where many area residents now work.

“Of course it will make a difference,” Mr. Friedman said. “It is mind-boggling. It is the best thing I have ever done.”

The developers of the Sole Mia project in North Miami, Fla., urged a local official to nominate the area as an opportunity zone and are now considering ways to take advantage of the status.CreditScott McIntyre for The New York Times

But even supporters of the initiative agree that the bulk of the opportunity-zone money is going to places that do not need the help, while many poorer communities are so far empty-handed.

Some opportunity zones that were classified as low income based on census data from several years ago have since gentrified. Others that remain poor over all have large numbers of wealthy households.

Number of Opportunity Zones by Median Household Income

More than 7 percent of opportunity zones had household incomes above the median census tract in 2017. Investors are focusing on projects in these neighborhoods.

Westlake Legal Group oz-distribution-335 How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$137,147

Long Island City,

Queens

$98,508

Market Square,

Houston

Westlake Legal Group oz-distribution-600 How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$91,397

Gowanus,

Brooklyn

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Westlake Legal Group oz-distribution-900 How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$91,397

Gowanus,

Brooklyn

$77,692

Fishtown,

Philadelphia

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Source: American Community Survey

By Blacki Migliozzi and Juliette Love

And nearly 200 of the 8,800 federally designated opportunity zones are adjacent to poor areas but are not themselves considered low income.

Under the law, up to 5 percent of the zones did not need to be poor. The idea was to enable governors to draw opportunity zones in ways that would include projects or businesses just outside poor census tracts, potentially creating jobs for low-income people. In addition, states could designate whole sections of cities or rural areas that would be targeted for investment, including some higher-income census tracts.

In some cases, developers have lobbied state officials to include specific plots of land inside opportunity zones.

In Miami, for example, Mr. LeFrak — who donated nearly $500,000 to Mr. Trump’s campaign and inauguration and is personally close to the president — is working with a Florida partner on a 183-acre project that is set to include 12 residential towers and eight football fields’ worth of retail and commercial space.

In spring 2018, as they planned the so-called Sole Mia project, Mr. LeFrak’s executives encouraged city officials in North Miami to nominate the area around the site as an opportunity zone, according to Larry M. Spring, the city manager. They did so, and the Treasury Department made the designation official.

The Far West Side of Manhattan is part of an opportunity zone — even as high-end towers have been replacing run-down apartment buildings and more than 15 percent of households reported income of $200,000 or more in 2017, according to an analysis by Webster Pacific, a consulting firm. This is the new home of Pershing Square Capital Management, the prominent hedge fund run by the billionaire Bill Ackman.

Mr. Ackman is trying to find tenants for 80,000 square feet of unused office space in his fund’s building, which has a Jaguar dealership on the ground floor. He said he was using its location inside an opportunity zone as a lure.

That is because investors can use their capital gains to invest not only in real estate but also in businesses inside opportunity zones. A company that sets up shop inside Mr. Ackman’s building therefore would be eligible to accept tax-advantaged opportunity-zone money.

One of the Sole Mia partners is Richard LeFrak, who donated nearly $500,000 to President Trump’s campaign and inauguration.CreditScott McIntyre for The New York Times

Financial institutions are not even trying to make it look as if their opportunity-zone investments were intended to benefit needy communities.

CBRE, one of the country’s largest real estate companies, is seeking opportunity-zone funding for an apartment building in Alexandria, Va., which CBRE is pitching to prospective investors as “one of the region’s most affluent locations.”

JPMorgan Chase is raising money to build housing targeting students in College Park, Md., near the University of Maryland. (Because many students do not have jobs, census data often wrongly suggests that college towns are poor neighborhoods.)

In marketing materials, JPMorgan noted that while College Park “qualifies as low income due to the student population, the area around it is affluent.” The bank added, “The tax benefits can be remarkable.”

The Swiss bank UBS is raising funds from its “ultra high net worth” clients — requiring in some cases that they have at least $50 million in investable assets — for developments in New York and Connecticut. The projects include a 23-story retail and office building in Downtown Brooklyn and an upscale apartment building in New Rochelle, N.Y., with a yoga studio and 24-hour valet parking. There is even a spa — for residents’ pets.

Other companies have set up subscription databases showing which zones have the highest incomes and fastest-growing populations to help investors steer their money to the most lucrative and least risky destinations.

“The current system is clearly driving capital to places that are known to be winners,” said Christopher A. Coes, vice president at Smart Growth America, a nonprofit group that encourages investments in American cities.

This street in New Orleans became part of an opportunity zone after a hotel in the Virgin chain had already been planned there.CreditAkasha Rabut for The New York Times

The Warehouse District of New Orleans is one of the city’s trendiest neighborhoods. Some of the area’s hottest restaurants — as well as a new one dishing out shrimp tempura tacos — are here. So are hipster barbershops. Boutique hotels spill well-heeled tourists onto the red brick sidewalks. High-end coffee shops are packed with young people buried in their MacBooks.

And it is getting hotter. The sounds of heavy-duty equipment heaving steel or pouring cement are audible across the neighborhood.

In other words, in a city grappling with acute poverty, this is not a neighborhood that especially needs a generous new tax break to lure luxury lodging. Yet state officials have established an opportunity zone here.

That decision benefited businesses already operating or planned for the district. One of those is a 225-room hotel, part of Richard Branson’s Virgin Hotels chain, whose plans were unveiled a year before Mr. Trump signed the tax law. Its location inside an opportunity zone meant investors could earn greater profits than they otherwise would have, by financing the project with tax-advantaged money.

Changing Incomes in New Orleans

Early opportunity zone development is often happening in neighborhoods where income was already rising, not in struggling areas.

Westlake Legal Group la-map-Artboard_1 How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

(under construction)

Hoffman Triangle

Warehouse District

NEW ORLEANS

Garden

District

Mississippi River

Westlake Legal Group la-map-Artboard_1_copy How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

Hoffman

Triangle

Warehouse

District

NEW ORLEANS

Mississippi River

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

Those investors include Mr. Scaramucci, who briefly served as White House communications director in 2017 and has claimed credit for helping to create the opportunity-zone plan. “We got to get into this business because this will be transformative to the United States,” he said recently.

Mr. Scaramucci’s investment firm, SkyBridge Capital, has raised more than $50 million in capital gains from outside investors, and most of it is being used to finance the hotel, according to Brett S. Messing, the company’s president. He said the hotel was likely to be the first of numerous opportunity-zone projects financed by SkyBridge.

The Virgin Hotels construction site in New Orleans. Because of the zone, the 225-room hotel can be financed with tax-advantaged money.CreditAkasha Rabut for The New York Times

Less than two miles away is the poorest opportunity zone in Louisiana — and one of the poorest nationwide. The zone includes the Hoffman Triangle neighborhood, where the average household earns less than $15,000 per year. Block after block, streets are lined with dilapidated, narrow homes, many of them boarded up. On a recent afternoon, one of them was serving as a work site for prostitutes.

City officials, including the head of economic development for New Orleans, said they were not aware of any opportunity-zone projects in this neighborhood.

Terrance Ross, a construction worker who has lived in the area for 20 years, is familiar with the building boom underway in the Warehouse District.

“Why is the federal government putting money where money is already accumulating?” he asked, lighting a cigarette and standing across the street from an abandoned house. “This neighborhood just needs some tender loving care.”

Similar scenes are playing out in opportunity zones across the United States: The federal government is subsidizing luxury developments — often within walking distance of economically distressed communities — that were in the works before Mr. Trump was even elected president.

In Houston, construction recently started on the Preston, with 373 “luxury for rent” apartments as well as a “skydeck” and a resort-style swimming pool. The development is being financed by the investors in Cresset, a multibillion-dollar asset management firm, including one of its founders, Avy Stein.

Changing Incomes in Houston

Early opportunity zone investment is coming to Market Square, already a site of high-end developments and major income growth.

Westlake Legal Group houston-map-Artboard_1 How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Market Square is home to three recent luxury developments.

Greater

Fifth Ward

Downtown

Houston

Fourth Ward

Opportunity zones

South

Central Houston

University

of Houston

Rice

University

Houston

Zoo

Westlake Legal Group houston-map-Artboard_1_copy How a Trump Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Market Square is home to three recent luxury developments.

Downtown

Houston

Fourth Ward

South

Central Houston

University

of Houston

Houston

Zoo

Opportunity zones

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

And in downtown Portland, Ore., the developers of a 35-story tower with a hotel, condos and office space are hoping to raise up to $150 million in opportunity-zone money to pay for the project. Condos will go for as much as $7.5 million each. The hotel is a Ritz-Carlton.

Exhibits at Mr. Scaramucci’s investment conference in Las Vegas, where opportunity zones were discussed as the next big thing.CreditBridget Bennett for The New York Times

Club music blared from speakers as millionaires and billionaires — and the money managers, lawyers, accountants and other professionals looking to make money off all this wealth — milled around a pool and private cabanas at the Bellagio hotel in Las Vegas.

They were at an annual investment conference to talk about the next big thing. This year, that thing was opportunity zones, which were the focus of five panel discussions.

The Las Vegas event was hosted by Mr. Scaramucci. Among the attendees was Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team. At one point he posed and smiled for a photo with Mr. Scaramucci and his wife.

“OZ are super hot right now,” Mr. Cuban said in an email after the event, adding that he had recently bought a property in an opportunity zone, but had not decided yet if he would use the tax break. “Every major investor I know has been pitched a property or fund within an OZ.”

The feeding frenzy is not confined to rich individuals. Lawyers, accountants, wealth managers and consultants are enjoying a gusher of new work — and raking in fees — helping clients structure deals with the maximum tax savings.

Real estate lawyers like Brad A. Molotsky are billing hundreds of extra hours as they field calls from eager investors. One day in June, Mr. Molotsky juggled clients who wanted to invest in $500 million worth of opportunity-zone projects.

“I am just one guy, and that was from just two meetings,” said Mr. Molotsky, who works in New Jersey for the law firm Duane Morris. He has completed more than 20 opportunity-zone deals, he said, and has dozens more in the pipeline.

The night after Mr. Scaramucci’s pool party, more festivities were underway on the other end of the Las Vegas Strip — part of a separate event also focused on opportunity zones. One party was at the Soviet-themed Red Square restaurant. Inside, an investor handed out postcards with photographs of buildings he wanted to buy in opportunity zones.

At another open-bar soiree, a man in a navy suit and a cowboy hat wandered the crowd, drink in hand. Attached to the top of his hat was a large sign. It beckoned: “Looking for OZ Funds.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

How a Tax Break to Help Poor Communities Became a Bonanza for the Rich

NEW ORLEANS — President Trump has portrayed America’s cities as wastelands, ravaged by crime and homelessness, infested by rats.

But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans.

Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.

Former Gov. Chris Christie of New Jersey; Richard LeFrak, a New York real estate titan who is close to the president; Anthony Scaramucci, a former White House aide who recently had a falling out with Mr. Trump; and the family of Jared Kushner, Mr. Trump’s son-in-law and senior adviser, all are looking to profit from what is shaping up to be a once-in-a-generation bonanza for elite investors.

The stated goal of the tax benefit — tucked into the Republicans’ 2017 tax-cut legislation — was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs.

The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones. Any profits from those projects can avoid federal taxes altogether.

“Opportunity zones, hottest thing going, providing massive new incentives for investment and job creation in distressed communities,” Mr. Trump declared at a recent rally in Cincinnati.

Instead, billions of untaxed investment profits are beginning to pour into high-end apartment buildings and hotels, storage facilities that employ only a handful of workers, and student housing in bustling college towns, among other projects.

Many of the projects that will enjoy special tax status were underway long before the opportunity-zone provision was enacted. Financial institutions are boasting about the tax savings that await those who invest in real estate in affluent neighborhoods.

ImageWestlake Legal Group 31ozbonanza8-articleLarge How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Among those raising money for opportunity-zone investments are Anthony Scaramucci, center, the founder of SkyBridge Capital, and Chris Christie, right, the former governor of New Jersey.CreditBridget Bennett for The New York Times

Mr. Scaramucci’s development in New Orleans offers a portrait of how the tax break works. His investment company, SkyBridge Capital, is using the so-called opportunity zone initiative to help build a hotel, outfitted with an opulent restaurant and a rooftop pool, in the city’s trendy Warehouse District.

The tax benefit also is helping finance the construction of a 46-story, glass-wrapped apartment tower — amenities include a yoga lawn and a pool surrounded by cabanas and daybeds — in a Houston neighborhood already brimming with new projects aimed at the wealthy.

And in Miami’s hot Design District, where commercial real estate prices have nearly tripled in the last decade, the tax break is set to be used for a ritzy new office tower with a landscaped roof terrace.

Some proponents of opportunity zones note that money is already flowing into downtrodden communities like Birmingham, Ala., and Erie, Pa. They argue that more funds will follow.

“The early wave, that’s not what you judge,” said John Lettieri, president of the Economic Innovation Group, an organization that lobbied for the establishment of opportunity zones.

But leaders of groups that work in cities and rural areas to combat poverty say they are disappointed with how it is playing out so far.

“Capital is going to flow to the lowest-risk, highest-return environment,” said Aaron T. Seybert, the social investment officer at the Kresge Foundation, a community-development group in Troy, Mich., that supported the opportunity-zone effort.

“Perhaps 95 percent of this is doing no good for people we care about.”

Mr. Scaramucci, left, shaking hands with John F. Kelly, the former White House chief of staff. Mr. Scaramucci is using opportunity-zone advantages to help build a hotel in a trendy section of New Orleans.CreditBridget Bennett for The New York Times

The opportunity-zone tax break was targeted at the trillions of dollars of capital gains held by rich Americans and their companies: profits from investments in the stock market, real estate and other businesses, even short-term trades by hedge funds. When investors sell those assets, they can incur tax bills of up to 41 percent.

Sean Parker, an early backer of Facebook, helped come up with the idea of pairing a capital-gains tax break with an incentive to invest in distressed neighborhoods. “When you are a founder of Facebook, and you own a lot of stock,” Mr. Parker said at a recent opportunity-zone conference, “you spend a lot of time thinking about capital gains.”

Starting in 2013, Mr. Parker bankrolled a Capitol Hill lobbying effort to pitch the idea to members of Congress. That effort was run through his Economic Innovation Group. In addition to Mr. Parker, the group’s backers included Dan Gilbert, the billionaire founder of Quicken Loans, and Ted Ullyot, the former general counsel of Facebook.

The plan won the support of Senators Cory Booker, Democrat of New Jersey, and Tim Scott, Republican of South Carolina. When Congress, at Mr. Trump’s urging, began discussing major changes to the federal tax code in 2017, Mr. Parker’s idea had a chance to become reality.

Mr. Scott, who sponsored a version of the opportunity-zone legislation that was later incorporated into the broader tax cut package, said it was “for American people stuck, sometimes trapped, in a place where it seems like the lights grow dimmer, and the future does, too.”

“Let’s turn those lights on and make the future bright,” he added.

Confined to six pages in the 185-page tax bill, the provision can significantly increase the profits investors reap on real estate and other transactions.

It allows investors to defer for up to seven years any capital gains taxes on the money they invest in opportunity zones. (That deferral is valuable because it allows people to invest a larger sum upfront, potentially generating more profits over time.) After 10 years, the investor can cash out — by selling the opportunity-zone real estate, for example — and not owe any taxes on the profits.

Over a decade, those dual incentives could increase an investor’s returns by 70 percent, according to an analysis by Novogradac, an accounting firm.

“We are very, very excited about the potential,” the president’s daughter Ivanka Trump said last year at an event celebrating Mr. Parker’s role in creating opportunity zones. “The whole White House obviously is behind the effort. The whole administration.”

The opportunity zones, focused on low-income census tracts, were drawn by officials in each state, as well as in Washington, D.C., and Puerto Rico. Last year, the Treasury Department approved roughly 8,800 such zones. (The White House and Treasury declined to make senior officials available to discuss the program.)

Nearly a third of the 31 million people who live in the zones are considered poor — almost double the national poverty rate. Yet there are plenty of affluent areas inside those poor census tracts. And, as investors would soon realize, some of the zones were not low income at all.

The Preston is financed by the investors in Cresset, a multibillion-dollar asset management firm.CreditBrandon Thibodeaux for The New York Times

The Harvard Club of New York City, in Midtown Manhattan, is the embodiment of America’s old-money elite. Crimson-jacketed waiters serve members who are watched over by oil portraits of elite alumni.

One recent morning, financial advisers representing several dozen of America’s richest dynasties — advisers to the Pritzker and Soros families were listed as attendees — crowded into a drab meeting room on the club’s third floor.

The advisers were there to see Daniel Kowalski, a top aide to Treasury Secretary Steven Mnuchin and the Trump administration’s point person for the opportunity-zone rules. Mr. Kowalski is barnstorming the country, bouncing from one conference to the next, explaining to real estate investors and developers how to take advantage of the new rules.

Mr. Kowalski was an aide to the Trump campaign, where he worked for the White House policy adviser Stephen Miller. Before that, he was an aide to Jeff Sessions when Mr. Sessions was on the Senate Budget Committee.

At the Harvard Club, he dived into an explanation of how opportunity zones work — and for whom they work. “The audience for opportunity zones is inherently fairly small because it’s limited to capital-gains income, which is why I wanted to come and talk to this group,” he told the room of advisers.

That audience is small indeed: Only 7 percent of Americans report taxable capital gains, and nearly two-thirds of those people reported total annual income of $1 million or more, according to I.R.S. data.

Yet this is a vital constituency, since the success of the opportunity-zone program will hinge largely on how much money investors kick in. That is why the Trump administration — and Mr. Kowalski in particular — is promoting the tax break on Wall Street.

“I have served a little bit as a middle man between the business community and the I.R.S.,” he said at another conference a few weeks later.

More than 200 opportunity-zone funds have been established by banks like Goldman Sachs and major real estate companies, including CIM Group of Los Angeles, which has previously been a partner with the Trump and Kushner families on projects. Those funds have said their goal was to raise a total of nearly $57 billion.

The law does not require public disclosure of who are taking advantage of the initiative or how they are deploying their funds. Among those who have invested money or said they intend to are Mr. Kohl, a founder of the department store chain that bears his name; Steve Case, co-founder of AOL; Alexander Bhathal, part owner of the Sacramento Kings basketball team; and Richard Forman, the former owner of the Forman Mills chain of clothing stores, according to interviews and other public statements.

Daniel Kowalski, the Trump administration’s point person for opportunity-zone rules, speaking at a Washington forum about them in June.CreditMelissa Lyttle for The New York Times

Many others are lesser-known business executives who recently sold small companies or real estate and are looking for ways to avoid large tax bills.

Paul DeMoret, for example, recently sold his auto-industry software company in Oregon. He said he was using some of those capital gains to help finance a Courtyard by Marriott in Winston-Salem, N.C., and an apartment building in Tempe, Ariz., among other projects in opportunity zones. He is making the investments through a private equity firm, Virtua Partners.

The tax break is largely benefiting the real estate industry — where Mr. Trump made his fortune and still has extensive business interests — and it is luring people with personal or professional connections to the president.

Mr. Christie, a onetime adviser to Mr. Trump, has raised money for opportunity-zone investments including an apartment building in Hackensack, N.J., and a self-storage center in Connecticut.

Cadre, an investment company co-founded by Mr. Kushner and his brother, Joshua, is raising hundreds of millions of dollars that it hopes to use on opportunity-zone projects. The company is eyeing neighborhoods in Savannah, Ga., Dallas, Los Angeles and Nashville that are expected to grow larger and wealthier in coming years. Jared Kushner has a stake in Cadre worth up to $50 million, according to his most recent financial disclosure.

Mr. LeFrak, a longtime confidant of Mr. Trump’s and a major campaign donor, is building a luxury residential community in the middle of an opportunity zone in Miami. (It is unclear how much of the development’s funding will end up being tax advantaged.)

Not far away in the Design District, Daniel Lebensohn is planning to build his high-end office tower. Mr. Lebensohn previously joined the Trump Organization to sell luxury condominiums at the Trump Hollywood complex north of Miami.

And Mr. Kushner’s family company directly owns or is in the process of buying at least a dozen properties in New York, New Jersey and Florida that are in opportunity zones. They include a pair in Miami, where Kushner Companies plans to build a 393-apartment luxury high rise with sweeping views of Biscayne Bay, according to a company presentation for potential investors.

A representative for the Kushner family confirmed that it was considering opportunity-zone funding for some developments, but said it would probably not use the funding for the Miami projects.

Backers of the opportunity-zone program say luxury projects are the easiest to finance, which is why those have been happening first. Over the long run, they say, those deals will be eclipsed by ones that produce social benefits in low-income areas.

At least some struggling neighborhoods are already starting to receive investments.

In Birmingham, for example, a developer is using opportunity-zone funds to convert a building, vacant for decades, into 140 apartments primarily aimed at the local work force.

“We are seeing projects that are being announced here in Alabama that would not have happened otherwise,” said Alex Flachsbart, founder of Opportunity Alabama, which is trying to steer investors to economically struggling neighborhoods.

Similar projects are getting underway in Erie, Cleveland and Charlottesville, Va. Goldman Sachs is using some of its capital gains — profits on the company’s own investments — in opportunity zones, including $364 million for mixed-income housing developments in Salt Lake City, Baltimore and other cities.

Mr. Case, the AOL co-founder, and Derrick Morgan, a former professional football player, are among those who have announced that they will invest in opportunity-zone projects that are designed to address clear social and economic problems.

As he announced his retirement from the Tennessee Titans in July, Mr. Morgan wrote on Instagram that his goal would be to “create more opportunities for those who are underserved and overlooked” in communities like Coatesville, Pa., where he went to high school.

Emanuel J. Friedman, a hedge fund manager, is using some of his capital gains and money he has raised from others to build 11 warehouses in rural Jasper County, S.C., near the Savannah seaport. The warehouses won’t employ many people, but he said the jobs would offer higher wages than hotel housekeeping positions at the nearby Hilton Head resort, where many area residents now work.

“Of course it will make a difference,” Mr. Friedman said. “It is mind-boggling. It is the best thing I have ever done.”

The developers of the Sole Mia project in North Miami, Fla., urged a local official to nominate the area as an opportunity zone and are now considering ways to take advantage of the status.CreditScott McIntyre for The New York Times

But even supporters of the initiative agree that the bulk of the opportunity-zone money is going to places that do not need the help, while many poorer communities are so far empty-handed.

Some opportunity zones that were classified as low income based on census data from several years ago have since gentrified. Others that remain poor over all have large numbers of wealthy households.

Number of Opportunity Zones by Median Household Income

More than 7 percent of opportunity zones had household incomes above the median census tract in 2017. Investors are focusing on projects in these neighborhoods.

Westlake Legal Group oz-distribution-335 How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$137,147

Long Island City,

Queens

$98,508

Market Square,

Houston

Westlake Legal Group oz-distribution-600 How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$77,692

Fishtown,

Philadelphia

$91,397

Gowanus,

Brooklyn

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Westlake Legal Group oz-distribution-900 How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

$54,408

Median

U.S. tract

$91,397

Gowanus,

Brooklyn

$77,692

Fishtown,

Philadelphia

$98,508

Market Square,

Houston

$137,147

Long Island City,

Queens

Source: American Community Survey

By Blacki Migliozzi and Juliette Love

And nearly 200 of the 8,800 federally designated opportunity zones are adjacent to poor areas but are not themselves considered low income.

Under the law, up to 5 percent of the zones did not need to be poor. The idea was to enable governors to draw opportunity zones in ways that would include projects or businesses just outside poor census tracts, potentially creating jobs for low-income people. In addition, states could designate whole sections of cities or rural areas that would be targeted for investment, including some higher-income census tracts.

In some cases, developers have lobbied state officials to include specific plots of land inside opportunity zones.

In Miami, for example, Mr. LeFrak — who donated nearly $500,000 to Mr. Trump’s campaign and inauguration and is personally close to the president — is working with a Florida partner on a 183-acre project that is set to include 12 residential towers and eight football fields’ worth of retail and commercial space.

In spring 2018, as they planned the so-called Sole Mia project, Mr. LeFrak’s executives encouraged city officials in North Miami to nominate the area around the site as an opportunity zone, according to Larry M. Spring, the city manager. They did so, and the Treasury Department made the designation official.

The Far West Side of Manhattan is part of an opportunity zone — even as high-end towers have been replacing run-down apartment buildings and more than 15 percent of households reported income of $200,000 or more in 2017, according to an analysis by Webster Pacific, a consulting firm. This is the new home of Pershing Square Capital Management, the prominent hedge fund run by the billionaire Bill Ackman.

Mr. Ackman is trying to find tenants for 80,000 square feet of unused office space in his fund’s building, which has a Jaguar dealership on the ground floor. He said he was using its location inside an opportunity zone as a lure.

That is because investors can use their capital gains to invest not only in real estate but also in businesses inside opportunity zones. A company that sets up shop inside Mr. Ackman’s building therefore would be eligible to accept tax-advantaged opportunity-zone money.

One of the Sole Mia partners is Richard LeFrak, who donated nearly $500,000 to President Trump’s campaign and inauguration.CreditScott McIntyre for The New York Times

Financial institutions are not even trying to make it look as if their opportunity-zone investments were intended to benefit needy communities.

CBRE, one of the country’s largest real estate companies, is seeking opportunity-zone funding for an apartment building in Alexandria, Va., which CBRE is pitching to prospective investors as “one of the region’s most affluent locations.”

JPMorgan Chase is raising money to build housing targeting students in College Park, Md., near the University of Maryland. (Because many students do not have jobs, census data often wrongly suggests that college towns are poor neighborhoods.)

In marketing materials, JPMorgan noted that while College Park “qualifies as low income due to the student population, the area around it is affluent.” The bank added, “The tax benefits can be remarkable.”

The Swiss bank UBS is raising funds from its “ultra high net worth” clients — requiring in some cases that they have at least $50 million in investable assets — for developments in New York and Connecticut. The projects include a 23-story retail and office building in Downtown Brooklyn and an upscale apartment building in New Rochelle, N.Y., with a yoga studio and 24-hour valet parking. There is even a spa — for residents’ pets.

Other companies have set up subscription databases showing which zones have the highest incomes and fastest-growing populations to help investors steer their money to the most lucrative and least risky destinations.

“The current system is clearly driving capital to places that are known to be winners,” said Christopher A. Coes, vice president at Smart Growth America, a nonprofit group that encourages investments in American cities.

This street in New Orleans became part of an opportunity zone after a hotel in the Virgin chain had already been planned there.CreditAkasha Rabut for The New York Times

The Warehouse District of New Orleans is one of the city’s trendiest neighborhoods. Some of the area’s hottest restaurants — as well as a new one dishing out shrimp tempura tacos — are here. So are hipster barbershops. Boutique hotels spill well-heeled tourists onto the red brick sidewalks. High-end coffee shops are packed with young people buried in their MacBooks.

And it is getting hotter. The sounds of heavy-duty equipment heaving steel or pouring cement are audible across the neighborhood.

In other words, in a city grappling with acute poverty, this is not a neighborhood that especially needs a generous new tax break to lure luxury lodging. Yet state officials have established an opportunity zone here.

That decision benefited businesses already operating or planned for the district. One of those is a 225-room hotel, part of Richard Branson’s Virgin Hotels chain, whose plans were unveiled a year before Mr. Trump signed the tax law. Its location inside an opportunity zone meant investors could earn greater profits than they otherwise would have, by financing the project with tax-advantaged money.

Changing Incomes in New Orleans

Early opportunity zone development is often happening in neighborhoods where income was already rising, not in struggling areas.

Westlake Legal Group la-map-Artboard_1 How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

(under construction)

Hoffman Triangle

Warehouse District

NEW ORLEANS

Garden

District

Mississippi River

Westlake Legal Group la-map-Artboard_1_copy How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Opportunity

zones

French

Quarter

Virgin Hotel

Hoffman

Triangle

Warehouse

District

NEW ORLEANS

Mississippi River

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

Those investors include Mr. Scaramucci, who briefly served as White House communications director in 2017 and has claimed credit for helping to create the opportunity-zone plan. “We got to get into this business because this will be transformative to the United States,” he said recently.

Mr. Scaramucci’s investment firm, SkyBridge Capital, has raised more than $50 million in capital gains from outside investors, and most of it is being used to finance the hotel, according to Brett S. Messing, the company’s president. He said the hotel was likely to be the first of numerous opportunity-zone projects financed by SkyBridge.

The Virgin Hotels construction site in New Orleans. Because of the zone, the 225-room hotel can be financed with tax-advantaged money.CreditAkasha Rabut for The New York Times

Less than two miles away is the poorest opportunity zone in Louisiana — and one of the poorest nationwide. The zone includes the Hoffman Triangle neighborhood, where the average household earns less than $15,000 per year. Block after block, streets are lined with dilapidated, shotgun-style homes, many of them boarded up. On a recent afternoon, one of them was serving as a work site for prostitutes.

City officials, including the head of economic development for New Orleans, said they were not aware of any opportunity-zone projects in this neighborhood.

Terrance Ross, a construction worker who has lived in the area for 20 years, is familiar with the building boom underway in the Warehouse District.

“Why is the federal government putting money where money is already accumulating?” he asked, lighting a cigarette and standing across the street from an abandoned house. “This neighborhood just needs some tender loving care.”

Similar scenes are playing out in opportunity zones across the United States: The federal government is subsidizing luxury developments — often within walking distance of economically distressed communities — that were in the works before Mr. Trump was even elected president.

In Houston, construction recently started on the Preston, with 373 “luxury for rent” apartments as well as a “skydeck” and a resort-style swimming pool. The development is being financed by the investors in Cresset, a multibillion-dollar asset management firm, including one of its founders, Avy Stein.

Changing Incomes in Houston

Early opportunity zone investment is coming to Market Square, already a site of high-end developments and major income growth.

Westlake Legal Group houston-map-Artboard_1 How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household

income 2012-17

Market Square is home to three recent luxury developments.

Greater

Fifth Ward

Downtown

Houston

Fourth Ward

Opportunity zones

South

Central Houston

University

of Houston

Rice

University

Houston

Zoo

Westlake Legal Group houston-map-Artboard_1_copy How a Tax Break to Help Poor Communities Became a Bonanza for the Rich Trump, Donald J Tax Cuts and Jobs Act (2017) Scaramucci, Anthony Parker, Sean (1979- ) opportunity zones New Orleans (La) Miami (Fla) Lefrak, Richard S Kushner, Jared Kushner Cos Federal Taxes (US) Christie, Christopher J Capital Gains Tax

Median household income 2012-17

Market Square is home to three recent luxury developments.

Downtown

Houston

Fourth Ward

South

Central Houston

University

of Houston

Houston

Zoo

Opportunity zones

Sources: American Community Survey; OpenStreetMap | By Weiyi Cai and Blacki Migliozzi

And in downtown Portland, Ore., the developers of a 35-story tower with a hotel, condos and office space are hoping to raise up to $150 million in opportunity-zone money to pay for the project. Condos will go for as much as $7.5 million each. The hotel is a Ritz-Carlton.

Exhibits at Mr. Scaramucci’s investment conference in Las Vegas, where opportunity zones were discussed as the next big thing.CreditBridget Bennett for The New York Times

Club music blared from speakers as millionaires and billionaires — and the money managers, lawyers, accountants and other professionals looking to make money off all this wealth — milled around a pool and private cabanas at the Bellagio hotel in Las Vegas.

They were at an annual investment conference to talk about the next big thing. This year, that thing was opportunity zones, which were the focus of five panel discussions.

The Las Vegas event was hosted by Mr. Scaramucci. Among the attendees was Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team. At one point he posed and smiled for a photo with Mr. Scaramucci and his wife.

“OZ are super hot right now,” Mr. Cuban said in an email after the event, adding that he had recently used some of his capital gains to buy a property in an opportunity zone. “Every major investor I know has been pitched a property or fund within an OZ.”

The feeding frenzy is not confined to rich individuals. Lawyers, accountants, wealth managers and consultants are enjoying a gusher of new work — and raking in fees — helping clients structure deals with the maximum tax savings.

Real estate lawyers like Brad A. Molotsky are billing hundreds of extra hours as they field calls from eager investors. One day in June, Mr. Molotsky juggled clients who wanted to invest in $500 million worth of opportunity-zone projects.

“I am just one guy, and that was from just two meetings,” said Mr. Molotsky, who works in New Jersey for the law firm Duane Morris. He has completed more than 20 opportunity-zone deals, he said, and has dozens more in the pipeline.

The night after Mr. Scaramucci’s pool party, more festivities were underway on the other end of the Las Vegas Strip — part of a separate event also focused on opportunity zones. One party was at the Soviet-themed Red Square restaurant. Inside, an investor handed out postcards with photographs of buildings he wanted to buy in opportunity zones.

At another open-bar soiree, a man in a navy suit and a cowboy hat wandered the crowd, drink in hand. Attached to the top of his hat was a large sign. It beckoned: “Looking for OZ Funds.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

House Panel Approves Subpoena for White House Emails From Private Accounts

Westlake Legal Group 25dc-oversight-facebookJumbo House Panel Approves Subpoena for White House Emails From Private Accounts United States Politics and Government Trump, Ivanka Presidential Election of 2016 Kushner, Jared House Committee on Oversight and Government Reform E-Mail

WASHINGTON — The House Oversight Committee voted Thursday to authorize a subpoena for all work-related texts and emails sent or received by White House officials on personal accounts, part of a long-running probe into whether senior administration aides have violated federal records laws by using private messaging services for official business.

The 23-to16 vote, divided along party lines, puts into the cross hairs President Trump’s daughter Ivanka Trump and his son-in-law and senior adviser, Jared Kushner, both of whom have admitted through an attorney to using personal accounts in the course of their work. The effort is also a turnabout of sorts for House Republican efforts in 2016 to highlight Hillary Clinton’s use of personal emails for her official work as secretary of state.

“The committee has obtained direct evidence that multiple high-level White House officials have been violating the Presidential Records Act by using personal email accounts, text messaging services and even encrypted applications for official business — and not preserving those records in compliance with federal law,” said Representative Elijah E. Cummings, Democrat of Maryland and the chairman of the committee. “What we do not yet know is why these White House officials were attempting to conceal these communications.”

The broad subpoena includes all communications — even messages that contained classified material — sent or received by White House employees, including employees in the National Security Council. It specifically names Mick Mulvaney, the acting White House chief of staff.

The committee first requested those messages in March 2017 under the Republican leadership of Representative Jason Chaffetz of Utah, after reports that multiple White House officials, including Ms. Trump, were using encrypted apps to conduct administration business. CNN reported last October that Mr. Kushner had communicated with Crown Prince Mohammed bin Salman of Saudi Arabia using WhatsApp, and a lawyer for Mr. Kushner and Ms. Trump confirmed to the committee in March that they both used private email accounts for White House business.

The White House has not produced a single document in response, Mr. Cummings said. The Presidential Records Act requires that nearly all communications with White House staff on official matters be preserved and that officials who use personal accounts either copy or forward an official account on all such messages.

Representative Jim Jordan of Ohio, the top Republican on the panel, painted the efforts as a partisan attack on Mr. Trump.

“They are so desperate to get the President. They just can’t help themselves,” Mr. Jordan wrote Wednesday on Twitter.

Just last month, Mr. Jordan and two other Republicans called on the committee to renew its examination of Mrs. Clinton’s use of a private email server.

Democrats on the committee slammed Republicans’ opposition to the authorization and charged them with hypocrisy after Republicans demanded thousands of Mrs. Clinton’s private emails as part of the Benghazi investigation. Mr. Trump made Mrs. Clinton’s private email server a central line of attack in his 2016 campaign for president.

“We received those documents, and I called for them to be made public,” Mr. Cummings said. “Our approach today should not be different merely because Donald Trump is president.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

House Democrats Approve Subpoenas for Who’s Who of Mueller Witnesses

WASHINGTON — The House Judiciary Committee on Thursday approved a dozen new subpoenas targeting a who’s who of witnesses cited in Robert S. Mueller III’s report as Democrats sought to elevate their showdown with President Trump over episodes of possible obstruction of justice documented by the special counsel.

The panel also approved a separate group of subpoenas seeking information about the Trump administration’s practice of separating children from their families at the border.

And House Democratic leaders set Tuesday for a full House vote to hold Attorney General William P. Barr and Commerce Secretary Wilbur Ross in contempt of Congress over their refusal to relinquish under subpoena documents related to the administration’s efforts to add a citizenship question to the 2020 census.

“The House will not shirk from its oversight of this administration and its malign effort to silence the voices of millions in our democracy,” said Representative Steny H. Hoyer of Maryland, the majority leader, referring to fears that a citizenship question would dissuade immigrants from answering the census.

Among the prominent figures to be subpoenaed by the Democrats are Jeff Sessions, the former attorney general; Rod J. Rosenstein, his deputy who appointed Mr. Mueller, the special counsel; John F. Kelly, the former White House chief of staff; Jared Kushner, the president’s son-in-law and senior adviser; and Corey Lewandowski, a former Trump campaign manager. Democrats also authorized a subpoena for David J. Pecker, who as head of American Media helped Mr. Trump during the 2016 presidential campaign buy the silence of a pornographic film actress and a former Playboy model, both of whom claimed to have had sexual relationships with him.

The committee’s actions set up a slew of possible new conflicts with the White House, which has taken a dim view of House Democrats’ continued investigation of matters studied by Mr. Mueller. White House officials could try to intervene to block testimony from many of those subpoenaed on Thursday who are current or former high-level administration officials, as they have with other witnesses.

That would only deepen the standoff between the administration and the House. On the census issue, Mr. Barr and Mr. Ross could still reach an accommodation with the House Oversight and Reform Committee, but more likely, Tuesday’s vote would allow the committee to go to court to try to pry the documents loose and make criminal referrals for Mr. Barr and Mr. Ross to the Justice Department for defying congressional subpoenas.

Despite rancorous Republican opposition, Judiciary Committee Democrats easily pushed the subpoena authorizations through on Thursday along party lines — promising to jump-start two of their highest-priority oversight investigations of Mr. Trump and his presidency. The chairman, Representative Jerrold Nadler of New York, did not indicate when he would deploy the newly authorized orders, but he is likely to wait until after closely anticipated testimony in the committee next week from Mr. Mueller himself.

The first oversight inquiry focuses on Mr. Trump’s attempts to impede federal investigators studying his campaign’s ties to Russia constituted obstruction of justice or an abuse of power.

Westlake Legal Group trump-presidents-investigations-promo-1557500573411-articleLarge-v4 House Democrats Approve Subpoenas for Who’s Who of Mueller Witnesses United States Politics and Government Trump, Donald J subpoenas Special Prosecutors (Independent Counsel) Sessions, Jefferson B III Russian Interference in 2016 US Elections and Ties to Trump Associates Rosenstein, Rod J Mueller, Robert S III Lewandowski, Corey (1975- ) Kushner, Jared Kelly, John F (1950- ) Immigration and Emigration House Committee on the Judiciary Flynn, Michael T

Tracking 29 Investigations Related to Trump

Federal, state and congressional authorities are investigating Donald J. Trump’s businesses, campaign, inauguration and presidency.

“The committee on the judiciary has a constitutional obligation to investigate credible allegations of misconduct,” Mr. Nadler said as he opened the hearing. “There is no substitute for primary evidence as the committee makes its decisions.”

Mr. Trump fumed about the new subpoenas on Twitter Thursday morning, urging Democrats to “go back to work” on policy issues rather than trying to take additional “bites at the apple” after the conclusion of Mr. Mueller’s 22-month investigation.

Representative Doug Collins of Georgia, the top Republican on the committee, protested what he called a “subpoena binge” that was designed to provoke political conflicts rather than find information.

“Today’s subpoena binge is an effort to change the narrative,” Mr. Collins said. “It is a show of force. It is a chance for the chairman to prove to his rank and file, and the rest of the Democratic caucus, he can be tough on the Trump administration after being pushed around for six months.”

In addition to Mr. Sessions and Mr. Rosenstein, the Mueller-related subpoenas target Michael T. Flynn, Mr. Trump’s former national security adviser; Jody Hunt, Mr. Sessions’s chief of staff; Rob Porter, a former top White House aide; and Rick A. Dearborn, another former White House official. Mr. Flynn has already been subpoenaed by the House Intelligence Committee.

The immigration-related subpoenas are part of a Judiciary Committee investigation of the Trump administration’s divisive policies at the border. They specifically authorize the committee to demand testimony and documents from current and former administration officials about its so-called zero tolerance policy at the border, the practice of separating migrant families and the standards of detention of migrants.

They are also seeking information about any talk of presidential pardons for Department of Homeland Security officials involved in carrying out the president’s immigration orders, despite the possibility that some might violate existing law.

Mr. Nadler said on Thursday that he was pursuing a compulsory process because the Justice Department had failed to meaningfully comply with voluntary requests for the same information; the Homeland Security and Health and Human Services departments, he added, had largely complied with similar requests.

“We have given the administration ample time to respond to these serious reports of egregious conduct,” Mr. Nadler said. “This committee cannot sit idly by. There must be oversight and accountability.”

The immigration-related subpoenas prompted a fierce debate between Republicans and Democrats on the committee over which party was more committed to addressing the unfolding humanitarian crisis at the southern border. Several Democrats who have visited detention sites there in recent weeks vividly recalled what they saw and pleaded for the Trump administration to adopt higher standards of care, particularly for children.

Mr. Collins accused Democrats of pursuing the subpoenas merely to distract from “a very large and very public intraparty squabble over funding for the humanitarian crisis at the border” that has consumed Democrats in recent weeks after the passage of an aid bill deemed insufficient by liberals.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

House Democrats Subpoena a Who’s Who of Mueller Witnesses

Westlake Legal Group 11dc-judiciary1-facebookJumbo House Democrats Subpoena a Who’s Who of Mueller Witnesses United States Politics and Government Trump, Donald J subpoenas Special Prosecutors (Independent Counsel) Sessions, Jefferson B III Russian Interference in 2016 US Elections and Ties to Trump Associates Rosenstein, Rod J Mueller, Robert S III Lewandowski, Corey (1975- ) Kushner, Jared Kelly, John F (1950- ) Immigration and Emigration House Committee on the Judiciary Flynn, Michael T

WASHINGTON — The House Judiciary Committee on Thursday approved a dozen new subpoenas targeting a who’s who of witnesses cited in Robert S. Mueller III’s report as Democrats sought to elevate their showdown with President Trump over episodes of possible obstruction of justice documented by the special counsel.

The panel also approved a separate group of subpoenas seeking information about the Trump administration’s practice of separating children from their families at the border. And House Democratic leaders set Tuesday for a full House vote to hold Attorney General William P. Barr and Commerce Secretary Wilbur Ross in criminal contempt of Congress over their refusal to relinquish documents related to the administration’s efforts to add a citizenship question to the 2020 census.

“The House will not shirk from its oversight of this administration and its malign effort to silence the voices of millions in our democracy,” said Representative Steny H. Hoyer of Maryland, the majority leader, referring to fears that a citizenship question would dissuade immigrants from answering the census.

Among the prominent figures to be subpoenaed by the Democrats are Jeff Sessions, the former attorney general; Rod J. Rosenstein, his deputy who appointed Mr. Mueller, the special counsel; John F. Kelly, the former White House chief of staff; Jared Kushner, the president’s son-in-law and senior adviser; and Corey Lewandowski, a former Trump campaign manager. Democrats also authorized a subpoena for David J. Pecker, who as head of American Media helped Mr. Trump during the 2016 presidential campaign buy the silence of a pornographic film actress and a former Playboy model, both of whom claimed to have had sexual relationships with him.

Despite rancorous Republican opposition, Democrats who control the committee were able to push the subpoena authorizations through along party lines — promising to jump-start two of their highest-priority oversight investigations of Mr. Trump and his presidency.

The first is an inquiry into whether Mr. Trump’s attempts to impede federal investigators studying his campaign’s ties to Russia constituted obstruction of justice or an abuse of power.

“The committee on the judiciary has a constitutional obligation to investigate credible allegations of misconduct,” Representative Jerrold Nadler, the chairman of the committee, said as he opened the hearing. “There is no substitute for primary evidence as the committee makes its decisions.”

Mr. Trump fumed about the new subpoenas on Twitter Thursday morning, urging Democrats to “go back to work” on policy issues rather than trying to take additional “bites at the apple” after the conclusion of Mr. Mueller’s 22-month investigation.

Representative Doug Collins of Georgia, the top Republican on the committee, protested what he called a “subpoena binge” that was designed to provoke political conflicts rather than find information.

“Today’s subpoena binge is an effort to change the narrative,” Mr. Collins said. “It is a show of force. It is a chance for the chairman to prove to his rank and file, and the rest of the Democratic caucus, he can be tough on the Trump administration after being pushed around for six months.”

In addition to Mr. Sessions and Mr. Rosenstein, the Mueller-related subpoenas target Michael T. Flynn, Mr. Trump’s former national security adviser; Jody Hunt, Mr. Sessions’s chief of staff; Rob Porter, a former top White House aide; and Rick A. Dearborn, another former White House official. Mr. Flynn has already been subpoenaed by the House Intelligence Committee.

The immigration-related subpoenas are part of a Judiciary Committee investigation of the Trump administration’s divisive policies at the border. They specifically authorize the committee to demand testimony and documents from current and former administration officials about its so-called zero tolerance policy at the border, the practice of separating migrant families and the standards of detention of migrants.

They are also seeking information about any talk of presidential pardons for Department of Homeland Security officials involved in carrying out the president’s immigration orders, despite the possibility that some might violate existing law.

Mr. Nadler said on Thursday that he was pursuing a compulsory process because the Justice Department had failed to meaningfully comply with voluntary requests for the same information; the Homeland Security and Health and Human Services departments, he added, had largely complied with similar requests.

“We have given the administration ample time to respond to these serious reports of egregious conduct,” Mr. Nadler said. “This committee cannot sit idly by. There must be oversight and accountability.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Ivanka Trump Tests Her Diplomatic Chops and Riles a Legion of Critics

Set against a tense, eerie silence in the landmine-riddled mountains separating South and North Korea, the Demilitarized Zone may be the highest-stakes negotiation site on earth. It’s not the sort of place for mistakes.

It is the latest spot where Ivanka Trump has tried her hand at statecraft.

On Sunday, Ms. Trump, the president’s elder daughter, used an impromptu meeting between her father and Kim Jong-un, the North Korean leader, to further slip into the role of unofficial spokeswoman and budding stateswoman for the Trump administration. With her husband, fellow senior adviser Jared Kushner, at her side, Ms. Trump delivered news interviews, posed for photos and attended a closed-door meeting between her father and Mr. Kim.

Earlier in the day, Ms. Trump had repeated what her father has often said about dealing with the North: that it would be free of crippling sanctions and clear for an economic boom if Mr. Kim were to dismantle his nuclear program. Scant evidence suggests that Mr. Kim is taking the steps to do this, but on Sunday, two Trumps rewarded him with a visit.

“We are on the precipice of ushering in potentially a golden era for the Korean Peninsula,” Ms. Trump told Bloomberg News in the hours before her father took the historic step of crossing into the North. But by the time she emerged from the closed-door meeting between the leaders hours later, she only had one word for journalists about her encounter with North Korea.

She called it “surreal.”

Others following along called it inappropriate.

“Ivanka Trump is not on the National Security Council — she is not an adviser on the issues being discussed,” Michael A. McFaul, an ambassador to Russia under President Barack Obama, said of Ms. Trump’s presence. “So her presence undermines the professional look of the Trump delegation, both to other countries and to national security professionals in the Trump administration.”

President Trump has come under fire for making family members part of his staff since the beginning of his administration, and then for clinging more tightly to them in a White House racked by turnover. Mr. Kushner alone has overseen portfolios ranging from the federal government’s outdated technology to peace in the Middle East. But for Ms. Trump, 37, the visit to Asia over the past week represented a prominent step onto a bigger stage.

ImageWestlake Legal Group merlin_157182618_4cf9b9f7-a698-4d9c-a34d-4d0933fcb179-articleLarge Ivanka Trump Tests Her Diplomatic Chops and Riles a Legion of Critics United States Politics and Government United States International Relations Trump, Ivanka Trump, Donald J May, Theresa M Lagarde, Christine Kushner, Jared Group of Twenty Abe, Shinzo

Ms. Trump speaking about women’s empowerment at the Group of 20 summit in Osaka, Japan, on Saturday.CreditErin Schaff/The New York Times

She appeared ready to assert herself from the start of the trip. She was the most visible woman from the Trump administration to go. Her stepmother, the first lady Melania Trump, stayed behind in Washington, and Sarah Huckabee Sanders, the former White House press secretary and a fixture of recent overseas trips, had just stepped down.

So at the summit of the Group of 20 economic powers in Osaka, Japan — the original purpose of the trip before Mr. Trump threw out a Twitter invitation to meet Mr. Kim at the Demilitarized Zone — Ms. Trump was repeatedly flanked by her father and a roster of world leaders, including Shinzo Abe, the prime minister of Japan, and Mohammed bin Salman, the crown prince of Saudi Arabia.

Observers and critics used a snippet of digital footage as a way to show that she might be out of her depth: A short video posted to Instagram by the office of Emmanuel Macron, the president of France, showed Ms. Trump in conversation with Theresa May, the departing prime minister of Britain, and Christine Lagarde, the International Monetary Fund managing director, as Mr. Macron and Justin Trudeau, the Canadian prime minister, listened.

In the clip, Ms. Trump seemed to be looking to find a place to jump into this diplomatic game of double Dutch. First Mrs. May spoke: “As soon as you charge them with that economic aspect of it, a lot of people start listening who otherwise wouldn’t listen.”

And then Ms. Trump jumped in: “And the same with the defense side of it, in terms of the whole business that’s been, sort of, male-dominated.”

Ms. Lagarde, who was standing next to the president’s daughter, swiveled her head and blinked several times as she listened.

Ms. Trump has made international women’s empowerment a cornerstone of her work in the White House. In February, she unveiled the Women’s Global Development and Prosperity Initiative, a program meant to bring economic security to 50 million women across the world by 2025. In recent weeks, she has crisscrossed the country to bring attention to the Trump administration’s effort to bolster work force development. And in Osaka this weekend, she told world leaders that women should be at the heart of any economic agenda.

Still, the video posted by the French led to rampant discussion online about which doors had been opened for Ms. Trump because of her proximity to her father, and whether she should be engaging with heads of state at a diplomatic event. Among those criticizing her access was Representative Alexandria Ocasio-Cortez, Democrat of New York.

Ms. Trump with her husband, Jared Kushner, at the G20 summit last week.CreditErin Schaff/The New York Times

“It may be shocking to some, but being someone’s daughter actually isn’t a career qualification,” Ms. Ocasio-Cortez wrote on Twitter. “It hurts our diplomatic standing when the President phones it in & the world moves on.”

On Sunday, a White House official, who spoke on condition of anonymity to describe internal conversations, pushed back at the characterization that Ms. Trump had interjected or annoyed others in the conversation — particularly Ms. Lagarde, who the official said had, like the others, been attending a women’s empowerment event where Ms. Trump had been invited to speak when the interaction was filmed.

That official said Mr. Trump had requested that his daughter accompany him to several G20 events, and even delayed the start of one so he would not miss her giving an introductory speech. The president keeps the counsel of Ms. Trump and Mr. Kushner closer than anyone, the official said.

A White House spokeswoman, Jessica Ditto, called the video clip a “misrepresentation” and the criticism around it “absolutely pathetic” in an email.

Gone are the days when Ms. Trump and Mr. Kushner kept relatively low profiles inside the West Wing, grappling with waves of bad press as they sought to establish their profiles behind the scenes. And gone are the days when senior aides, such as John F. Kelly, the former chief of staff, tried to curb their influence.

Ms. Trump’s participation in the G20 trip illustrated just how unchecked her ascent in the White House has been in recent months, and how few people who might have raised doubts remain.

If the president has any concern about his daughter playing diplomat, it didn’t show on this trip: During a meeting for troops at a military base outside of Seoul, South Korea, the president introduced his daughter alongside Mike Pompeo, his secretary of state.

“She’s going to steal the show,” Mr. Trump said. “She’ll steal it.”

Glancing at his secretary of state and his daughter, Mr. Trump also offered his thoughts about her appearance: “Beauty and the beast, Mike,” he added.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com