Lightstone Taps Ex-Goldman Partner to Fund Opportunity Zone Hotel
Patrick Clark and Noah Buhayar | March 28, 2019 | Bloomberg
Former Goldman Sachs partner Peter Scaturro and real estate developer Lightstone Group are joining the rush into “opportunity zones” – designated areas that allow investors to claim tax breaks for putting money to work in low-income neighborhoods.
Scaturro’s wealth management firm, the PKS Group, is working with the New York developer to invest client money in individual real estate projects that benefit from the tax break. Their first project is a 203-room Moxy hotel in the Williamsburg neighborhood of Brooklyn that will cost about $125 million to build. The partners also are weighing plans to develop apartments in the Bronx, and could make more than $500 million in equity investments in opportunity zones this year, Lightstone Group President Mitchell Hochberg said in an interview.
Opportunity zones were created as part of the Trump administration’s 2017 federal tax law as a way to draw development and jobs to low-income neighborhoods. Investors who fund projects in the zones and meet certain requirements can defer capital-gains taxes on profits earned elsewhere and eliminate them on the new investments within the more than 8,700 designated census tracts.
