Larry Flynt, founder of Adult Magazine Penthouse, had to backtrack on an investment in an opportunity zone in Los Angeles. He had been slated to invest $25 million to help in the development of an area just East of Santa Monica.
However, he abruptly pulled his money just days before closing. His representative explained, "We want to be honest here. This is a total misunderstanding on our part. When we heard there was an o-zone project, we thought it was like a tax advantaged g-spot of some sort. We were in. Unfortunately, like most people in these projects, we didn't even read the materials or understand how it worked. When it turned out to be some sort of real estate venture, it just got a lot less interesting for us. We apologized and have moved on."
What you can learn from this fake news
Opportunity zones were part of the tax reform enacted. They are meant to bring investment to areas that need it. They have potential the potential to improve areas but, likely any regulation, can also be exploited in unintended ways.