Opportunity Zone Designation Gives Boost to Overtown MLS Stadium Site

Miami MLS Stadium rendering

With Inter Miami CF investors expected to close on land for an Overtown MLS stadium site, the group could receive a boost through a federal Opportunity Zone designation.

Last week, it was learned that Inter Miami CF’s investment group–which is headlined by David Beckham–intends to close on a $9 million purchase of three acres of land in the city’s Overtown neighborhood from Miami-Dade County. The parcel is part of nine acres of land that was previously the lead contender for the location of a new stadium, and finalizing a purchase of the county’s property would give investors control over the entirety of the site.

At this point, the exact plans that Inter Miami CF’s investors have in mind for the Overtown site remain unknown, but its location within a federally designed Opportunity Zone could provide an advantage. As part of a 2017 overhaul of the tax code at the federal level, investors can receive certain capital gain tax breaks by investing in a designated Opportunity Zone.

Some regulations related to Opportunity Zones are not finalized, and a number of factors determine the exact break that investors can receive by putting money into a designated zone. Inter Miami CF investors have not cited Opportunity Zone designation as a factor for wanting to close on the Overtown site, but real-estate experts feel that gaining control of and eventually developing the Overtown site–with or without a new stadium–provides a clear advantage. More from the Miami Herald:

“When these stadiums get sold, they often come with the franchise,” said Peter Mekras, managing director of Aztec Group, a real estate investment firm. “If you make a major capital investment in an Opportunity Zone and the physical part appreciates in value and it’s a good business venture, you’re allowing a smart decision to be even smarter.”

Through a spokesperson, [Jorge] Mas declined to comment for this story. But Miami-Dade Mayor Carlos Gimenez told the Herald that he and Mas had already discussed other options for the property if the stadium went elsewhere, including affordable housing.

“From a pure real estate standpoint, this purchase makes sense,” said Javier Aviño, a partner and land use lawyer at the Bilzin Sumberg law firm. “They are getting the property at a good price and they have support from the district commissioner and the county to do something else with the property, even if it’s not a stadium.”

It should be noted at this point that the exact plans for Overtown are not settled, and Inter Miami CF is still focused on the city-owned Melreese County Club as prospective stadium site. The shift from Overtown to Melreese in planning the stadium has to do with size of the land, as Melreese provides far more room for new development surrounding a privately financed stadium. However, plans for Melreese are not at all settled. Club investors still have to negotiate a 99-year lease land with city officials and have that agreement approved by four of Miami’s five city commissioners.

Inter Miami CF will have to work through that process before determining whether Overtown is needed for a new stadium, or if an alternate development plan can be instead be pursued in Overtown. While investors have not cited the tax breaks that come with the site’s Opportunity Zone designation as a factor for wanting to close on Overtown, having those incentives in place certainly could make any long-term investment more enticing.

Above rendering reflects previous plans for Overtown site.

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