Tax reform legislation enacted in 2017 created the opportunity for significant new capital gains tax benefits for investors in qualified opportunity funds (QOFs). The primary purpose of the law is to create economic development as well as job creation in economically distressed communities. The Treasury, in coordination with State Governors, certified nearly 9,000 census tracts as QOZs. There are two enumerated QOZs right here in Manassas and several more throughout Fauquier & Prince William County. See Designated Qualified Opportunity Zone map here.
capital gains tax benefits for investors
A QOF is an investment vehicle that invests in real estate or other businesses located in certain areas that have been designated as qualified opportunity zones (QOZs). This legislation provides the ability for investors with existing capital gains tax liability, to reduce the amount of those tax obligations by up to 15%, and more significantly, allowing the reinvestment of those funds to accrue tax free; provided, that, they are invested in a QOZ and held for at least 10 years. Clearly, this is a tremendous tax advantage for investors that are interested in making a real estate or business investment in a QOZ.
restriction on the source of those capital gains
Another added benefit is that there is no restriction on the source of those capital gains in order to take advantage of this new legislation. While QOZ investment options are limited to real estate or businesses in QOZs, the source of funds can come from a wide range of investments giving rise to capital gains tax.
Additional guidance released in May 2019
when it was first enacted, there were many unanswered open issues with respect
to the legislation, the United States Department of the Treasury (Treasury), has
issued proposed regulations and additional guidance related to QOFs on May 1,
2019, which updated the original regulations and guidance from October 19, 2018.
Updates included clarification on topics such as:
Investing Capital gains into a QOF
Structuring Issues related to investment into a QOF
Investing by the QOF into a QOZ property
Operating within the qualified opportunity zone
Exiting the QOF
Our experienced team of attorneys are able to assist you with your QOF investment questions, clarification on the recent legislative updates, and prospective transactions in order to take advantage of this unique opportunity.
In our first blog post on the 2019 Virginia proffer legislation, we told you what hasn’t changed with the new law. As promised, now we will address what has changed.
Myth: Under the
new law, localities have no liability exposure for unreasonable demands unless
the governing body requests one in writing, so planning staff can talk to
Reality: The new legislation says that developers and localities can talk, but the old legislation didn’t say they couldn’t. The reason why local government attorneys warned staff against talking to developers was the Koontz decision from the US Supreme Court, and specifically Justice Kagan’s dissent in that case which warned that “no local government official with a decent lawyer would have a conversation with a developer” because of the risk of liability. (That hasn’t changed.) There’s also the question of whether a local governing body authorizes or ratifies a written request from a staff member.
The bottom line is that the new law changes the liability exposure of localities, but localities should still exercise caution.
Myth: Under the
new law, localities can expect to receive proffers for facilities in addition
to the four enumerated facility types of transportation, schools, public
safety, and parks.
Reality: The new
legislation allows for proffers to be deemed reasonable if signed by the
applicant and property owner, even if they are for off-site proffers that
aren’t for the four kinds of public facility. However, beware that the new law
takes away with one hand what it hands out with the other. Right after the
language about the owner and applicant being able to make any offsite proffer
reasonable just by signing it, the General Assembly wrote the following:
2. Failure to submit proffers as
set forth in subdivision 1 shall not be a basis for the denial of any rezoning
or proffer condition amendment application.
This raises an interesting question if the locality relies upon impacts on facilities other than transportation, parks, schools and public safety to deny a rezoning.
Myth: Under the
new law, an applicant has to object in writing to a proffer request in order to
challenge it later.
Reality: Challenges based on violations of “this section” (Va. Code Section 15.2-2303.4) require a written objection to the governing body before the aggrieved applicant can file suit. This limits the availability of the legal remedies under that code section, but does not limit the remedies available for a constitutional challenge or a challenge based on another statute. It is also important to note that this section does not extend to conditions imposed pursuant to a special use permit.
Localities still need to do their own analysis on whether a proffer request is reasonable. Maybe not as much changed with the new law as some people are hoping.
As a human resource professional, business owner, executive, manager or administrative personnel tasked with dealing with HR issues, you need to stay on top of recent developments in the field of HR and employment law that may impact the future of your business. This Summit is designed to provide you with critical information in an engaging and useful format. Being informed about what is going on in the world of employment will help you stay on top of your company’s evolving HR needs.
The Employment Law & HR Summit is an easy and affordable way to summarize and highlight the most up-to-date information employers need to address issues currently impacting their workforce and organization, and identify issues that can have an impact on tomorrow’s workplace.
Jointly Presented by Vanderpool, Frostick & Nishanian, P.C., and Prince William SHRM, Inc.
Hottest employment law issues and trends of 2019 as well as significant court decisions.
Christopher D. Silva – Assistant District Director US Department of Labor/Wage & Hour Division
Learn important information from the DOL on topics including FLSA exemptions, wage deductions, independent contractor classifications, overtime requirements, and minimum wage issues. This is also the opportunity for attendees to gain a clearer perspective about common employer violations and trends in DOL enforcement.
Jinnae Monroe – Managing Principal, Professionals by Design
Gain a deeper richer understanding of generations in the workplace and best practices for accepting roles and responsibilities of each generation. The session will discuss the importance of HR’s role in leading and guiding other organizational units in embracing generational differences.
Mauricio Velasquez – CEO & Owner The Diversity Training Group
The HR professional in 2020 must understand the concepts of Change Management and have the skills and knowledge to guide their organizations through change. This session will address how HR professionals can help their organizations identify the impact of change, assess and manage the ripple effects that change can cause across the organization, and how to communicate change across throughout all levels of the organization.
Pricing: Includes admission, continental breakfast, lunch, written materials (online), and a chance to win prizes!!!
Early Bird Rate on or before August 31st: PWSHRM Member Rate: $129, Non-Member Rate: $169.
Regular Rate on or after September 1st: PWSHRM Member Rate: $169, Non-Member Rate: $199.
Cancellation Fee $25. No refunds will be issued after September 12, 2019. Registration closes October 3, 2019.
Credit Status: One-Day Conference is approved for 5 HRCI ( 3.75 Business/1.25 General ) & 5 SHRM PD Hours
In a press release by the Australian Minister for Defence; issued March 06, 2019it was announced that “the Royal Australian Navy (RAN) will receive a new sovereign air transportable Submarine Rescue Service capability under a contract with Phoenix International (Australia).”
Attorney Christopher Collins speaks to the proposal efforts, the due diligence performed to vet subcontractors and the importance of solid teaming agreements.
ICE Agents have been active recently in the Prince William area and other parts of the VA/DC/MD metropolitan area, investigating businesses (especially small and medium companies) to determine compliance with properly completing and retaining I-9 forms. Employers in industries involving construction, restaurants, landscaping, and janitorial/cleaning services are frequently (but by no means the only) targets of ICE investigations.
U.S. Immigration and
Customs Enforcement (ICE) (an agency within the Department of Homeland
Security) has significantly increased its efforts to reduce unlawful
immigration employment practices under the Immigration Reform and Control Act
(IRCA). Employers are legally required to verify the identity of the person
they hire and to confirm that they are eligible to work in the United States. The law further requires that employers document
this process by completing a Form I-9 for each person they hire.
ICE has focused
enforcement efforts on employers who hire an illegal workforce. They follow up
on tips provided by the public and conduct random and unannounced audits of
employer records to determine if the company has complied with its legal
obligations. They do not need probable
cause to investigate your business nor do they need to have a tip.
I-9 Forms and ICE’s Notice of Inspection
The mandatory I-9 forms
must be completed every time you make a new hire. The form must be retained for three years
after the date of hire, or one year after the date employment ends, whichever
is later. If ICE has been given a tip or the business has been selected for an
audit, ICE will present you with a Notice of Inspection.
What to Expect from an ICE Inspection
The notice of inspection
usually requests the following records from the company:
No-match and mismatch letters
Upon notice, you have
three business days to provide the investigating officers with the requested
Civil and Criminal Penalties
Failure of employers to
comply with IRCA can result in substantial civil fines and ultimately, possible
criminal prosecution if you are found to have knowingly violated the law.
What To Do If ICE Agents Present You With A Notice of Inspection Regarding Your I-9s
Do not provide records immediately or allow an
immediate inspection of records as you have up to three days to respond.
Call your trusted
employment lawyer in order to advise you on the best course of
action and to timely respond with the proper documents presented in the best
Ensuring Compliance Before ICE Investigates
If you have not yet been
the subject of an investigation, you can take steps to protect your
business. Employers should conduct
confidential internal audits of your I-9 forms with the help of your employment
lawyer. This process can help you
correct any potential problems before an inspection and avoid possible fines. It is also beneficial to have knowledgeable
employment counsel conduct periodic training of your personnel assigned to
handle your I-9s.
Contact a Trusted Employment Law Attorney
Kristina Keech Spitler, Esq., with Vanderpool, Frostick & Nishanian is ready to help your business respond to an ICE inspection, provide a confidential internal Form I-9 audit, and/or help train your personnel to properly complete and retain I-9 forms.
Kristina Keech Spitler is a Shareholder and Head of the Employment Law Practice of Vanderpool, Frostick & Nishanian, PC. With over thirty years of experience, Kris has been recognized as “Legal Elite” in Employment Law by Virginia Business Magazine, as well as a “Leader in the Law” and an “Influential Women of Law” by Virginia Lawyers Weekly. You can reach Kris at (703)369-4738 or firstname.lastname@example.org.
** The information contained in this website is provided for informational purposes only and should not be construed as legal advice.
Pictured above: VF&N land use and zoning attorney, Karen Cohen, with legendary engineer, Sid Dewberry, PE, LS, Chairman Emeritus, Dewberry, Kat Grimsley, Director of the MS Real Estate Development program at George Mason University, and the team of book contributors, celebrating the publication of the third in a series of land development books by industry-leading design firm, Dewberry.
the Built Environment: From Site Acquisition to Project Completion is a textbook that explores the entire development process from
an applied perspective to provide architects, civil engineers, and other team
members with an understanding of the context in which real estate development
occurs. Karen, fellow alumnae of the Mason Masters of Real Estate
Development (MRED) program, and others, were contributors and advisors.
The commercial real estate and property sector in Northern Virginia and Prince William County has experienced fluctuations in recent years which resulted in vacant buildings. For the owners of these properties, they’re left with a tough decision – let the property stay vacant or repurpose the property.
Repurposing property is
using a building differently than the original intent. As a property owner, you
are looking for cost-effective ways to keep your investment profitable. For example, If you turn an old factory into
loft apartments, or a barn into an event center, the building sees new life,
you continue to make money, and all without building on existing green space.
But it isn’t always that easy to change land use of an existing property.
Land use considerations
Land use laws regulate
how businesses can operate on certain lands. The most common form of land use
regulation is zoning. Cities use this legal process all across the country to
help regulate their local development. Zoning laws prevent you from coming home
to your well-established housing neighborhood and finding a big box store has
set up shop next door.
While it’s not likely for
a big box store to pop up next to houses, it is possible as in our earlier
example, for a factory to become loft apartments. The zoning for that land must
change to account for residents living on the property instead of people coming
to work. Without making this change, it puts both the business operator and
you, the property owner, in legal peril. It’s up to you to make sure the city
allows the land use modification.
Special use permit (SUP)
A special use permit
allows a local government to take a look at one particular development and to
impose conditions needed to mitigate any impacts on the community. It is
available only if the zoning ordinance provides for it.
To obtain a special use permit, you must get approval from the governing body in your community. You need to file an application, submit the filing fee, provide documentation supporting your request, and submit to questioning at a public hearing. See the steps outlined below:
Michael Vanderpool, Esq., founder of Vanderpool, Frostick & Nishanian, P.C. (VF&N) and a highly regarded community leader, will receive the 2019 Leadership Prince William Vision Award. This award honors an individual in Prince William County whose innovative, strategic or bold leadership has had a positive and significant impact on the community. Past award recipients have included Virginia Senator Charles J. Colgan and Dr. Gary L. Jones, CEO of Youth for Tomorrow.
Mr. Vanderpool’s commitment to service and passion for
developing future leaders is best showcased through his legacy at VF&N. Founded on these very principles, Mr.
Vanderpool encouraged a company culture rich in civic duty and leadership. The
firm, located in Manassas and recently named one of Virginia’s largest law
firms, has produced a highly active group of leaders that have, and will continue
to make, significant contributions to their community.
VF&N boasts several industry and community leaders,
including Kristina Spitler, Prince William County Bar Association’s President; Brett
Callahan, President-Elect of the Center of the Arts of Greater Manassas; Karen
Cohen, Chair, NAIOP Government Relations Prince William Subcommittee; three past
chairmen of the Prince William Chamber of Commerce; and several graduates of
the Leadership Prince William program.
Leading by example, Michael Vanderpool has been a
community advocate since he moved to Manassas in 1975. He has contributed to the community in
several areas, including his work to initiate construction of the Route 234
Bypass and the Freedom Center. He was the
founding Chairman of the Manassas Education Foundation and the Hylton
Performing Arts Center for several years and represented the local community while
serving on the Board of the United Way of the National Capital Area. He served
as a Trustee of the George Mason University Foundation and as Trustee and Vice-Chairman
of the Prince William Health System. Most recently, he served as President of
the Manassas Rotary Club and is the current President of the Manassas Rotary Foundation.
Mr. Michael Vanderpool is a leader in business, a
leader in the community and a leader of people.
The government directs 23% of its procurement to small businesses from local, state & federal agencies, large primes and military installations. But some contracts are just too large for many to handle alone. When this is the case, small businesses can team up with one or more other businesses to collectively perform the contract. Learn from a panel of experts, to include VF&N attorney Kris Spitler and attorney Chris Collins, on how teaming is a great way for small businesses to build credibility and demonstrate proficiency to the government and other contractors.
Highlights will include how to raise the bar and maintain your business’ reputation; strategically vet external/internal partners before you win the contract; ask the pre-questions that matter to long-term collaborations; and address some of the common legal concerns regarding teaming.
Presented by the Government Contracting Council of the Prince William Chamber of Commerce.
Thursday, May 2, 2019 from 8:00-10:00 a.m.
9720 Capital Ct., Ste. 203; Manassas VA 20110
$35/Non chamber members. Register today: Click Here
As attorneys and self-proclaimed Proffer Professors, we were concerned by what we were hearing from the industry on the recent proffer reform. Blanket statements like, “oh, it’s just a repeal of the 2016 law” or “proffer schedules are legal now”. In this post, we clear the air of misconceptions.
Myth: The 2019 law repealed the 2016 law
Fact: To debunk the
first myth, we’ll just note that the 2019 law leaves large parts of the 2016 law
intact. For example, the law still forbids a local government from denying a
rezoning application for residential development “where such denial is based in
whole or in part on an applicant’s failure or refusal to submit an unreasonable
proffer.” For another, the law still exempts qualified “small area
comprehensive plans.” There are some significant changes, though, and we will
comment on them in future blog posts.
schedules are now legally OK
Fact: As for the
second myth, the 2019 law doesn’t clear the constitutional hurdle for proffer
schedules. Under federal case law, a proffer first must be connected to the development impacts (that is, it has to have a
“nexus”) and second, there must be “rough proportionality,” which refers to the
degree of connection between the
proffer and the development’s projected impact.
So, just how “rough” can the degree of connection be and
still pass muster under the Fifth Amendment of the U.S. Constitution? The U.S. Supreme Court (in a case called Dolan) answered that question this
way: “No precise mathematical
calculation is required, but the [locality] must make some sort of
individualized determination that the required dedication is related both in
nature and extent to the proposed development.”
A locality can still provide information about how much it costs to build a school, police station, or park, but because a “one size fits all” proffer schedule lacks the required individualized determination, it is subject to attack on constitutional grounds.