Discussion Highlights
| Phoenix Behavioral Health Facility – Mr. Loeffler and Dr. Carson discuss Caliber’s recent development. Caliber would like to develop four or more properties like this in the near future |
| Important tax incentive point on Opportunity Zone funds – High-net individuals can hedge their tax burden by investing in these opportunities |
| Opportunity Zones are on track to accrue $100 billion in personal investment within a 10-year period |
| To date: Opportunity Zones have attracted $75 billion in investments within the first two years, producing 500,000 jobs |
| Opportunity Zones can accommodate innovative thinking, rather than being just another way for the rich to become richer, they benefit communities, create jobs and get people out of poverty |
| Next Opportunity Zone Opportunities? – Mr. Loeffler discusses the potential in smart cities |
| The Future of Opportunity Zones – Dr. Carson and Mr. Loeffler discuss the future and their thoughts on where the program should head to |
| Dr. Carson discusses his time in office from his tenure in the previous administration and the challenges they faced to get this program up-and-running |
Opportunity Zones Discussion
Chris Loeffler, Chief Executive Officer and Co-Founder of Caliber talks with Ben Carson, the former U.S. HUD Secretary, about Opportunity Zone tax incentives.
Caliber is a full-service real estate investment and development company in the Southwest and one of the top 5 opportunity zone sponsors in the country according to Mr. Loeffler.
Getting right down to business, Mr. Loeffler said that he would like to obtain Dr. Carson’s perspective on a variety of things, such as what he thinks are the future of Opportunity Zones and also what is in store for Dr. Carson going forward.
Join Chris Loeffler, Caliber CEO, as he shares Caliber’s journey from a small startup to a market leader in commercial real estate asset management and gives key insights on Caliber’s innovative investment approach, including self-directed IRAs and private loans.
There are various approaches utilized by Caliber, such as converting commercial spaces, investing in distressed real estate, and introducing pickleball facilities. In this podcast, Chris discusses the importance and intricacies of approaching opportunity, building investor trust, securing funding, transitioning to the public domain, and maximizing returns within Opportunity Zones.
Phoenix Behavioral Health Facility
Dr. Carson put his doctor’s hat on for just a moment to comment on Caliber’s recent development – a behavioral health facility located in Phoenix. Commenting on the newly delivered asset, the former neurosurgeon said that he hoped to see more developments like this in the future from Caliber. Mr. Loeffler concurred, stating that Caliber would like to do four or more in the not-so-distant future.
Opportunity Zones Tax Incentives
Dr. Carson detailed the tax incentives involved in the development programs, which were on track to accrue $100 billion in personal investment within a 10-year period. According to the former Cabinet official, Opportunity Zones wound up attracting $75 billion within the first two years, as well as produce 500,000 jobs and is expected to lift a million Americans out of poverty.
“Those are the kinds of things that are highly effective,” Dr. Carson said. “And I hope that the Biden administration will recognize that it was put forward as a bipartisan program, and because it has been successful, I hope there won’t be any attempts to snuff it out rather than build on it.”
“The economic policies in the pre-COVID period that brought that unemployment rate down, particularly in the Black communities, to historic lows – those are the kinds of things that make a difference,” he said. “Let’s do the things that actually work.”
Thoughts on High-Net Individuals Investing
Dr. Carson and Mr. Loeffler emphasized how high-net-worth individuals can significantly hedge their tax burden by investing in opportunity zones while simultaneously benefitting the community.
Opportunity Zones can accommodate innovative thinking, rather than being just another way for the rich to become richer, they benefit communities. Dr. Carson quipped, “the rich are going to get richer anyway, might as well give them some incentive to improve our local communities.”
Some economically neglected communities benefit the most from these investment opportunities. Whether they are accessed through real estate funds, opportunity zones (funds) and venture funds, which are essentially investing in a business within a project, create jobs, increase new housing, create wealth, and decrease poverty. Dr. Carson believes the derived from these opportunity zones for the investors and communities will keep these alternative investment vehicles going.
Opportunity Zones Innovation & Smart Cities
Mr. Loeffler added that Caliber has discussed launching a handful of opportunity zones in the future, one of which would be a build a smart city or an innovation hub within the cities where Caliber operates. He continued that Caliber could essentially have one fund that invests in the underlying real estate and another all-stage venture fund that would invest in the business within the real estate.
Commenting on the synergistic nature of that vision, Dr. Carson was delighted to hear what Mr. Loeffler was talking about and stated that opportunity zones were designed to promote innovative thinking.
Expanding on the innovation discussion, Mr. Loeffler added that Caliber is in discussion with several major corporations in Arizona that have incubation-type projects that Caliber could facilitate in opportunity zones.
Dr. Carson’s Vision of Opportunity Zones
Mr. Loeffler asked Dr. Carson, “When you think about future of the opportunity zone program – what needs to be done or needs more attention?”
Dr. Carson said with a sigh, “there is a long list of things that need to be accomplished.” He continued, when he first arrived at HUD, the word malfeasance was thrown around a lot. The programs were so complex and nonfunctional.
Dr. Carson believes that it stemmed from the office of the CFO, which was essentially defunct for many years with no accountability. His team managed to attract a new CFO and embarked on a major overhaul with an integrity task force, which made the most difference in the world.
Today, all those structural defects have been cleared, resulting in a clean audit for the first time in many years.
In addition, HUD not only updated their internal controls, but they implemented new technology with a specially designed dashboard that can track the various investment programs and grants in real-time.
Dr. Carson was pleased to share that this investment made all the difference in the world in attaining new grants – especially with FHA and Ginnie Mae accumulated a significant amount of money in the mutual mortgage and insurance funds. As a result of this cash infusion, HUD was better able to deal with the COVID crisis more effectively.
Another game-changer mentioned, included restructuring the programs towards self-sufficiency instead of dependency. Dr. Carson believes this is important – because historically, people would be in public housing for multiple decades. This even included younger people coming out of foster care, making it more likely to end up homeless. With the new programs focused on self-sufficiency, those numbers have been dropping dramatically.
Thoughts on the Government and the Private Sector Working Hand-in-Hand
Mr. Loeffler shared a similar anecdote about Caliber who built out a wing of a hotel called the Phoenix Dream Center. Caliber’s goal was like HUD’s – bringing young people coming out of foster care to a safe, nurturing place to go that would set them up for self-sufficiency and success.
Dr. Carson loved hearing that story because he believes most of our social problems cannot be solved by the government alone. He believes that help from the private sector is essential in making these types of initiatives successful.
Mr. Loeffler reflected on the infrastructure of the opportunity zones – stating that there are roads and bridges in the private sector as well as the financial sector. He believes that many of those roads and bridges were not quite completed in the early stages of opportunity zone investing, but that infrastructure is being built out and it is working a lot better than it was even three years ago.
To that end he Mr. Loeffler asked Dr. Carson what he would say to the investment community about the impact their investments are making within our communities?
Dr. Carson reiterated that Opportunity Zone investing is the best win-win program ever designed by the federal government because distressed communities get the help they need and investors get a great tax benefit in return.
Discussion Wrap-Up
Mr. Loeffler wraps up the discussion with one last question to Dr. Carson, “When you look at the opportunity zone program today, fast forward 50 years – does it still exist? From the chair you sit in today, how do we ensure it exists?”
Dr. Carson’s response, “Unfortunately, we will also have poor people, but that does not mean we should not try to obliterate it. On the flip side, you are always going to have people that are looking for ways to help. What will demonstrate success is more people exiting from poverty and dependency faster than going into that. My hope is that 50 years from now the amount of poverty is greatly reduced. Remember, 11% decrease in poverty in opportunity zones – so that is a good indicator.”
He concluded that everyone needs to dive in with both feet to do something about poverty and he’s pleased that Caliber has taken the initiative to make these investments in areas that need it most. Dr. Carson has seen firsthand how this program has changed people’s lives when they are given the opportunity to live in a revitalized community.
About Dr. Carson
Benjamin Solomon Carson Sr. is an American retired neurosurgeon, author, and politician who served as the 17th United States Secretary of Housing and Urban Development from 2017 to 2021. He was a candidate for President of the United States in the 2016 Republican primaries. He is considered a pioneer in the field of neurosurgery.
Carson became the Director of Pediatric Neurosurgery at the Johns Hopkins Children’s Center in 1984 at age 33; he was the youngest chief of pediatric neurosurgery in the United States.[6] At retirement, he was a professor of neurosurgery, oncology, plastic surgery, and pediatrics at the Johns Hopkins School of Medicine.
Carson’s achievements include participating in the first reported separation of conjoined twins joined at the back of the head. Although surgically a success, the twins continued to suffer neurologic/medical complications.[8] Additional accomplishments include performing the first successful neurosurgical procedure on a fetus inside the womb; developing new methods to treat brain-stem tumors; and revitalizing hemispherectomy techniques for controlling seizures. He wrote over 100 neurosurgical publications. He retired from medicine in 2013.
Carson gained national fame among political conservatives after delivering a speech at the 2013 National Prayer Breakfast which was perceived as critical of the policies of President Barack Obama. Following widespread speculation of a presidential run, Carson officially announced his campaign for the 2016 Republican nomination for President in May 2015. Carson performed strongly in early polls, leading to him being considered a frontrunner for the nomination during the fall of 2015; however, his polling support began to decline following scrutiny of his foreign policy credentials after the November 2015 Paris attacks.
Carson withdrew from the race after Super Tuesday, following a string of disappointing primary results, and endorsed Donald Trump. Following Trump’s victory, Trump nominated Carson as Secretary of Housing and Urban Development, was confirmed by the United States Senate in a 58–41 vote on March 2, 2017. Carson has also been seen as a “symbol” of black conservatism.
Carson has received numerous honors for his neurosurgery work, including more than 60 honorary doctorate degrees and numerous national merit citations. In 2001, he was named by CNN and TIME magazine as one of the nation’s 20 foremost physicians and scientists and was selected by the Library of Congress as one of 89 “Living Legends” on its 200th anniversary. In 2008, Carson was bestowed the Presidential Medal of Freedom, the highest civilian award in the United States. In 2010, he was elected into the National Academy of Medicine. He was the subject of the 2009 TV film Gifted Hands: The Ben Carson Story, where he was portrayed by Cuba Gooding Jr.