When Natalie Noel and her father, Chip, open Noel Family Distillery early next year in Donaldsonville’s historic district, it will be the first of its kind in the small city. Once complete, the craft distillery will produce high-grade rhum agricole, vodka and gin, all made with sugarcane cultivated by local farmers and provided in partnership with Cora Texas sugar mill in White Castle.
The concept inspired Noel to open an opportunity-zone fund earlier this year in an effort to attract larger-scale investment to the business venture. However, since it’s only secured one investor so far—she calls the fund a “work in progress.”
Noel’s experience is similar to a trend visible throughout the country: developers appear slower to jump on investment opportunities low-income areas.
At its core, the capital gains tax incentive program—established by Congress in the Tax Cuts and Jobs Act of 2017—is designed to drive long-term investment to low-income communities by incentivizing developers to reinvest their capital gains into opportunity-zone funds, which are specialized vehicles dedicated to investing in the designated zones.
The greater Baton Rouge area is home to 29 federally designated opportunity zones, which are seeing mixed levels of traction.
To pump significant investment into an overlooked area, national policy experts say attaching a developer to a project is the most difficult, yet most necessary, step.
Part of this difficulty is that investors are still cautious about the program because of a lack of clarity regarding the rules and a desire to see how other projects pan out before jumping in themselves. Read the full story about Opportunity Zones from the Nov. 5 edition of Business Report.
