Paul L. Caron
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Saturday, December 7, 2019

ProPublica: How A Tax Break To Help The Poor Went To NBA Owner Dan Gilbert

ProPublica, How a Tax Break to Help the Poor Went to NBA Owner Dan Gilbert:

Pro PublicaAfter a lobbying effort, Dan Gilbert, billionaire founder of Quicken Loans, won special tax status for wealthy areas of downtown Detroit where he owns billions worth of property.

Billionaire Dan Gilbert has spent the last decade buying up buildings in downtown Detroit, amassing nearly 100 properties and so completely dominating the area, it’s known as Gilbertville. In the last few years, Gilbert, the 57-year-old founder of Quicken Loans and owner of the Cleveland Cavaliers, has also grown close to the Trump family.

Quicken gave $750,000 to Trump’s inaugural fund. Gilbert has built a relationship with Ivanka Trump, who appeared at one of his Detroit buildings in 2017 for a panel discussion with him. And, last year, he watched the midterm election returns at the White House with President Donald Trump himself, who has called Gilbert “a great friend.”

Gilbert’s cultivation of the Trump family appears to have paid off: Three swaths of downtown Detroit were selected as opportunity zones under the Trump tax law, extending a valuable tax break to Gilbert’s real estate empire.

Gilbert’s relationship with the White House helped him win his desired tax break, an email obtained by ProPublica suggests. In February 2018, as the selection process was underway, a top Michigan economic development official asked her colleague to call Quicken’s executive vice president for government affairs about opportunity zones.

“They worked with the White House on it and want to be sure we are coordinated,” wrote the official, Christine Roeder, in an email with the subject line “Quicken.” ...

The result has likely already been a boon to Gilbert: Multiple studies have found that property values in opportunity zones increased because of the tax break. Gilbert has put an estimated $3 billion into buying and renovating properties in Detroit, the vast majority now in opportunity zones.

In addition, even though the law was designed to incentivize new investment, Gilbert has several already-planned developments in the area that could benefit from the tax break, experts said.

The upside for an investor such as Gilbert “could be huge,” said Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy, a liberal-leaning think tank. “This seems to be a situation where someone is going to get tax breaks for something they were going to do anyway.”

https://taxprof.typepad.com/taxprof_blog/2019/12/propublica-how-a-tax-break-to-help-the-poor-went-to-nba-owner-dan-gilbert.html

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Comments

Now that's a shocker. A friend of Trumps is benefiting from the Opportunity Zones. Drain the swamp.

Posted by: Oliver Buckley | Dec 7, 2019 6:23:04 AM

Well, it should be a shocker. But it isn't because it's become so commonplace. There's just no end to the corruption and sleaze in the Trump Administration. "Drain the swamp"? What a (bitter) laugh.

Posted by: Gerald Scorse | Dec 7, 2019 2:02:47 PM

I'm guessing you guys don't know the specific enterprise zone boundaries were set by the governors of each state before CONGRESS passed the enabling legislation. Feel free to blame Trump for all the sins of the world, but this one is not on him.

Posted by: Dale Spradling | Dec 8, 2019 8:19:11 AM

I am no fan of opportunity zones, but their particular locations in each state were selected by the Governors of those states. If you look across the country at where the zones ended up you can get the feeling that occasionally politics played a role. However, those politics were local – not federal – and it is just as true in blue states as it is in red states.
Here is the bad analogy – Blaming the President for Gilbert’s zone benefit here is like resenting your parent’s employer for giving him/her an unexpected (and perhaps unearned) bonus in their paycheck because they are spending it all on their favorite sibling (not you) whom they expect to have the greatest likelihood of taking care of them in their old age. There is plenty of blame to go around but most of it should rest closer to home.

Posted by: SRB | Dec 8, 2019 10:02:15 AM

These comments are a parody of the impeachment hearings. Emotions and beliefs on one side, facts and reality on the other.

Posted by: ruralcounsel | Dec 9, 2019 3:51:51 AM