President Donald Trump's company owns a golf club in an Opportunity Zone offering developers massive tax breaks, but experts say it is unlikely it could take advantage of them.
Continue Reading Below
The Trump National Golf Club outside Philadelphia is in one of the nation's nearly 9,000 high-poverty areas offering the breaks to spur investment, create jobs and lift incomes. But the federal law that set up the program bans "sin businesses" from benefiting, and specifically cites golf courses and country clubs along with massage parlors and racetracks in a list of examples.
The 365-acre course in the southern New Jersey town of Pine Hill includes an 18-hole course framed by maple and pine trees, putting greens and a 43,000-square-foot clubhouse rented for weddings and other events.
Census data suggests that areas nearby are indeed struggling, with nearly a fifth of residents living in poverty and median household incomes, at $38,000, half that of New Jersey as a whole.
Ira Weinstein, managing principal of the CohnReznick tax advisory firm in Baltimore, said that Trump's club could get around the "sin businesses" ban, but only if it bought a new zone property for development adjacent to the club.
"The program gives funds a lot of latitude in developing all kinds of different businesses and residential properties around sites they already own," he said. "The question for them and anyone looking to use the program — is it worth it financially?"
One of the president's business partners might benefit from the program, though.
The Trump Organization has partnered with a Mississippi company to open several hotels starting next year, and at least one, in Greenville, Mississippi, is in an Opportunity Zone.
"If it is a publicly advertised program and we qualify for it, I am going to look at it," said Dinesh Chawla, CEO of the family owned Chawla Hotels.
"If you see a five-dollar bill on the sidewalk," he said, "do you walk away or do you pick it up?"
Chawla Hotels is opening as many as four hotels in the Mississippi Delta as the first of what the Trump Organization hopes are dozens of properties in two new chains — American Idea and Scion — targeting budget and mid-priced travelers.
Trump's business is taking a licensing fee in the venture and is not an owner so none of the tax breaks would go directly to it.
The Trump Organization did not respond to requests for comment.
The Opportunity Zone breaks, including an elimination of all capital gains tax on certain investments, were part of the Republican-led tax overhaul last year. The program was touted by Trump in a White House ceremony earlier this week as a way to send billions of investment dollars into overlooked "distressed" neighborhoods across the country, but it has also drawn criticism as a giveaway to developers who would have poured money into some of the areas anyway.
The Trump Organization could also benefit by building in zones itself, just like any company. The head of Trump's hotel business told The Associated Press last year that he was looking for sites in the U.S. to add to Trump's owned-and-operated line of luxury hotels, which includes the Trump International Hotel near the White House.
Braun contributed from Washington.