“The development team’s ability to secure capital for Soleste Grand Central underscores the strong demand for both multifamily investments in Miami’s urban core and the tax benefits derived from long-term investments within opportunity zones,” attorneys who closed the financing said by email.

Bilzin Sumberg partners Alexandra Lehson, Jay Sakalo and Jon Chassen in Miami represented the development team.

A joint venture of PTM Partners LLC, a development company founded last year to focus entirely on opportunity zones and with offices in Miami and New York, and Estate Investments Group, a prolific South Miami-based developer of apartments in Miami-Dade County, are working on Soleste Grand Central.

The Tax Cuts and Jobs Act in 2017 created opportunity zones to encourage new projects and businesses in economically distressed areas by giving investors tax breaks. This prompted developers and investors to start projects across South Florida.

PTM and Estate Investments in February bought the 1.3-acre site for $9.7 million through an OZ fund. It’s south of the historic Greater Bethel AME Church and east of Interstate 95.

Investors can defer paying taxes on their capital gains from any commercial venture by putting the funds in an OZ project. If they keep their investment in for five years, 10% of the capital gains won’t be taxes. A seven-year commitment means 15% of the capital gains won’t be taxed, and a 10-year commitment eliminates the tax on capital gains.

Developers structure their OZ financing differently with some buying sites betting OZ investors will finance the projects and others putting in their own capital gains.

PTM belongs to the latter group and plans to hold Soleste Grand Central for 10 years, said Scott Meyer, chief investment officer.

“We have equity invested in the deal. That equity is via a qualified opportunity fund. And then we’ve gone to lenders to take debt on the project, a construction loan to complete the total capital needed to develop the project,” he said. 

OZ critics say the tax breaks go to rich investors, leading to high-end projects in poor neighborhoods and gentrification.

Soleste Grand Central is rising in economically struggling Overtown, but developers say it will have approachable and affordable rents.

The Bilzin Sumberg attorneys said the project fulfills OZ goals.

“The development of Soleste Grand Central is doing precisely what opportunity zones are intended to do: encourage credible sponsors such as PTM Partners and Estate Investments Group to stimulate new economic development in an underserved area, while filling a void in the market with 360 new first-class apartment units at attainable prices,” the attorneys’ statement said.

Soleste will have amenities on par with luxury buildings, including a resort-style pool deck, gym, spa, children’s playroom, co-working space and lounge. It will be part of Estate Investments’ Soleste-branded multifamily buildings that so far have risen in more suburban areas west of Interstate 95.

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