Behind one of the doors here, at an unmarked Brink’s Global warehouse near John F. Kennedy International Airport, is roughly $30 million in gold bars.
A group of investment advisers from suburban Pennsylvania parked the gold here last May, shortly after buying it from a seller in Europe. And they chose this spot — an ordinary-looking warehouse in Springfield Gardens, a majority-Black, lower-middle-class part of town — for a very specific reason: a provision in the Trump tax cuts that offers breaks to investors who launch ventures in poorer neighborhoods.
“We are actually driving economic activity in economically challenged areas,” Bob Enck, the CEO and founder of the business, boasted in a promotional video. He’s dubbed his scheme the US Opportunity Gold Fund.
The gambit relies on “opportunity zones,” a controversial federal program that lavishes a steep capital gains cut on rich companies and individuals in exchange for investing in a struggling community. Thanks to the 2017 Tax Cuts and Jobs Act, investors who sell financial assets such as stock can defer and reduce their capital gains taxes — which can run as high as 40% — if they use the proceeds to build a business or housing in a federally approved low-income neighborhood.
If the venture lasts more than 10 years, the profits from the new business become entirely tax-free.
The program entails very few requirements to prove that new projects will benefit existing communities. As a result, opportunity zones have fueled the construction of luxury housing, self-storage units and even a superyacht marina, and helped the Trump tax breaks earn their reputation as a bonanza for the ultrarich.
But even in that light, experts told HuffPost the US Gold Opportunity Fund is one of the boldest applications of the program they have ever encountered.
