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Luxury developer seeks federal tax breaks

Written by on Sunday, March 10, 2024

But Payne Park near downtown Sarasota is not exactly known as a blighted area. What gives?


By Ramon Lopez

Original Air Date: Mar. 8, 2024

Host: Payne Park for decades was mostly a trailer park, an affordable home first to circus folks and artists, then for migrant workers. But these times ended in 2007, when the City of Sarasota turned the 29 acres into a public park. Today, the big city park has become an attraction, and luxury real estate developments, going for waterfront prices, are popping up around it. A proposed luxury townhome development bearing the park’s name is the latest. We have learned that the actual developer is taking advantage of tax breaks of a federal law designed to provide an incentive for investment in economically distressed communities. All this, with the blessing of the City of Sarasota. Ramon Lopez explains.

Ramon Lopez: The new Payne Park Townhome community, to be built beside Payne Park, is before the Sarasota Development Review Committee.

Payne Park Townhomes renderings

The market-rate townhomes will take up an entire two-acre block between US 301 and the 29-acre public park. They will be in walking distance to government offices and to Main Street, with its movie theaters, live music venues, and upscale restaurants and stores.

The site is currently home to a half-dozen retail and office buildings, one residential building and parking lots. They would be demolished and replaced by a mixed-use project with nearly 7,000 square feet of commercial space, almost 2,000 square feet of amenities, a leasing office fronting US 301, and 50 upscale rental three-bedroom townhouses. Each home will have an outdoor deck area at the second and fourth levels. There will be a community pool within a landscaped courtyard.

No attainable housing is proposed for this project.

Who is the actual developer?

The paperwork submitted to the Development Review Committee listed the owner of the property as CCP Opa-Locka LLC of Fort Lauderdale. Six lots were apparently consolidated by the previous owner, a trust. CCP Opa-Locka LLC bought the property for $7 million last summer.

A search of the Florida Secretary of State website for Opa-Locka lists the firm as a foreign limited liability company headquartered at 330 Southwest 2nd Street in Fort Lauderdale. Partners in the company include Nicholas Pantuliano and Michael Tillman. Both Pantuliano and Tillman are also listed as founding partners of PTM Partners, a real estate development firm based in Miami. Pantuliano is cited as PTM’s chief development officer. Tillman is listed as chief executive officer and chief investment officer.

PTM Partners describes itself as “a real estate investment firm that seeks community-oriented development opportunities that create substantial value for its residents, partners, and investors.” “Initially focused exclusively on Qualified Opportunity Zones, PTM has become one of the largest Opportunity Zone fund managers in the country.”

“PTM focuses on making investment decisions that balance reputation and long-term profitability over short-term revenue maximization.”

PTM manages more than $20 billion in real estate covering a broad range of mixed-use development projects in Florida, New Jersey, New York and Washington, DC. Many of them are luxury projects, taking advantage of federal Opportunity-Zone tax breaks.

The project includes an entire block on US 301, near downtown Sarasota.

The opportunity zone specialist issued a press release last November announcing it bought its first Sarasota-area property for its next mixed-use development project.

In it, Pantuliano said that “our team is excited to have a project in Sarasota, especially in this beautiful, unique corner of the city next to one of its greatest amenities, Payne Park”.

PTM said Sarasota is one of the fastest-growing cities in the country and can benefit from a “dedicated rental product with finishes and amenities on par with luxury for-sale communities.”

The entire eastern section of downtown Sarasota was marked as an “opportunity zone” in 2019. The city says opportunity zones provide a ‘win-win’ for investors. Depending on the length of investment, capital gains taxes can be deferred or ultimately eliminated. This, for redevelopment efforts within the city’s qualified zones.

Opportunity Zones in Sarasota

A bit of background here. In 2017, the Federal Government passed the Federal Tax Cuts and Jobs Act, providing the capital gains taxes avoidance. In 2018, U.S. states and territories were allowed to nominate eligible
census tracts for consideration as opportunity zones, based on meeting statutory criteria for ‘low’ income communities. There are nearly 9,000 such zone nationwide.

Four eligible census tracts in the City of Sarasota were ultimately identified as qualified opportunity zones.
They include Newtown, neighborhoods to the West and South of Newtown, and a tract off Fruitville Road near the Eastern city limit.

And then there is the entire eastern segment of downtown, including Gillespie Park and adjacent neighborhoods East of US 301.

Unclear is why CPP Opa-Locka, LLC and not PTM Partners is listed with the city as bankrolling the project.

WSLR News reached out to PTM Partners for comment, but a company officer was not immediately available to discuss the Payne Park Townhomes project.

Kevin Hall, North America Editor of the Washington, DC-based Organized Crime and Corruption Reporting collaborative, told WSLR News he wasn’t surprised if there was one corporate entity being the front of the Sarasota real estate development and another corporation the front of the Opportunity Zone bid.

It should be noted that PTM Partners was contacted by Chairman of the Senate Finance Committee Ron Wyden in early 2022. Senator Wyden said he was investigating the operation and effects of opportunity funds. He said, given the lack of transparency and reporting requirements for opportunity funds, he needed data from PTM Partners about its business practices.

The senator from Oregon told Michael Tillman, “I am long concerned that the Opportunity Zone program may permit wealthy investors another opportunity to avoid billions of dollars in taxes without meaningfully benefitting the distressed communities the program was intended to help”.

This is Ramon Lopez for WSLR News.

 

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