A programme meant to aid poor communities as part of Donald Trump’s tax code reforms in 2017 instead reportedly benefited a Florida marina near his Mar-a-lago resort, housing luxury superyachts that cost over $100m (£77.7m).
The wealthy area received a major tax break after it was listed in an “opportunity zone,” according to the ProPublica report published on Thursday, following apparent lobbying efforts from a local billionaire developer.
Opportunity zone tax breaks featured in the GOP’s Tax Cuts and Jobs Act of 2017 were meant to encourage private business investments in low-income regions. There are no public reporting requirements to determine how much each tax break costs under the new programme, however, and critics have said the process of choosing opportunity zones lacks transparency.
Wayne Huizenga Jr, who owns the Rybovich superyacht marina in West Palm Beach, Florida, successfully managed to have the area listed as an opportunity zone after writing a letter last year to then-Florida Governor Rick Scott, ProPublica said.
Mr Huzienga Jr, who was a major donor to the former governor along with his billionaire father, noted the “significant private sector investment that is poised to take place” in the area called Marina Village.
The marina owner had planned to develop luxury apartment condominiums on the site housing the superyachts well before the 2017 tax overhaul, writing in his letter to Mr Scott: “This project has been planned for some time as part of the larger Marina Village initiative which incorporates the Rybovich working waterfront marina.”
But the programme was only meant to provide tax breaks for new investments in opportunity zones.
Still, the former governor announced the Rybovich marina region was selected as a zone that would receive tax breaks under the programme while rejecting lower-income communities throughout the city.
Mr Trump has previously celebrated the success of the programme as “doing unbelievably well”, while claiming “the biggest beneficiary there is African Americans”.
Congress has meanwhile called for investigations into the alleged exploitation of the programme, which at one point received bipartisan support from Democrats like Cory Booker.
The New Jersey senator has since stated the US Treasury’s inspector general should review the programme.
Ron Wyden, an Oregon Democrat, has also introduced legislation to restrict the programme and curb the use of opportunity zone tax breaks in wealthy regions of the country.
In a statement, the senator said: “The Opportunity Zone programme has been troubled from the start.”
He added: “The Treasury Department has been steering potentially billions in tax breaks to Donald Trump’s friends, and there are no safeguards to ensure taxpayers are not simply subsidizing handouts for billionaires with no benefit to the low-income communities this program was supposed to help.”
The president of Rybovich defended the company’s requests to be considered for an opportunity zone tax break in a statement to ProPublica, saying the motivation “was to create incentives for redevelopment by third parties in the surrounding neighbourhood” and that it “never planned the use of any Opportunity Zone tax deferment for its property”.
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