The Pearl Fund is establishing the country’s first Opportunity Zone Incubator ™.
The concept of the startup incubator is a proven way to attract, nurture and accelerate the growth of early-stage companies. Incubators are known to catalyze innovation, foster collaboration and provide a competitive advantage to attracting top talent.
Opportunity Zone regulations require a “substantial” portion of the Opportunity Zone Business be located in one or more designated Opportunity Zones.
The OZ-Incubator™ is an ideal way for the Pearl Fund to maximize the potential return for investors while ensuring compliance with the tax regulations, and while also allowing the General Partner to spend more time with the fund’s investments at less cost.
The Pearl Fund is establishing OZ-incubators™ in two separate locations. These locations have a rich history and have been interconnected for hundreds of years (and are each a short distance from the General Partner’s two residences): The Brooklyn Navy Yard & North East Pennsylvania where coal was mined to support the building of the ships.
While Navy ships like the USS Missouri or the USS Arizona are no longer being built at the Navy Yard, nor is coal being mined outside Scranton, both areas are designated Opportunity Zones and are thriving. They are ideal locations for the fund’s OZ-Incubators™. Infrastructure, tax mitigation, supportive government, higher education, ample housing and an eager labor force are already in place and available.
A new study (link) shows "New York City is the best place on the planet for technology!" New York ranked first in an index measuring 30 global tech-heavy cities. New York pulled ahead thanks to its volume of venture capital cash, and its large pool of talent -- both homegrown and people attracted to the city.
Here is more about our two locations:
The Navy Yard in Brooklyn (link) is undergoing its largest expansion since WWII. Through a nearly $1 billion investment, the Yard will add over 2 million square feet of space and is on track to triple the number of new jobs to over 17,000 by 2020. It currently houses over 400 companies that generate over $2B in revenue.
The Yard's master plan lays out an ambitious vision for growth… well beyond its current expansion. The plan represents a $2.5 billion investment that would bring the total number of jobs at the Yard to 30,000. To achieve this growth, the plan envisions development of 5.1 million square feet of vertical manufacturing space unlike any in the country, further solidifying the Yard's role as a national urban model for sustainable middle-class job creation. At the same time, the plan outlines a series of open space and connectivity improvements aimed at integrating the 300-acre Yard with its surrounding neighborhoods, while improving operations for its manufacturing users.
The Pearl Fund will be located right in the middle of this dynamic environment, selecting the most promising companies for investment.
The Navy Yard currently has an existing incubator ripe with 100 potential investments for The Pearl Fund. It's called New Lab (link) and was named the “Cathedral to Manufacturing” by the Wall Street Journal (link) and “The 84,000 Square-Foot Paradise in Brooklyn” by Vanity Fair (link).
In addition, more potential deal flow for the fund is expected to come from the new WeWork which is opening a 220,000 sq./ft. facility in the Navy Yard Spring 2019.
Here is a link to some of the startups in the Navy Yard (subset of potential pipeline for the Fund):
New Lab Tenants (link)
Navy Yard Tenants (link)
A few hours away from the Navy Yard in what used to be coal country is the Jessup Small Business Center (link). It sits on a scenic mountain ridge just east of the city of Scranton, Pennsylvania. This 132 acre mixed use park is not only a designated an Opportunity Zone but also is a Keystone Opportunity Zone and a Keystone Innovation Zone, meaning businesses located there receive special Federal, State and City tax advantages.
The park is positioned in the center of the Boston-Washington Corridor and has class A-office as well as industrial rentable space readily available at 1/5th the cost of the Navy Yard. The park also has several dozen building sites available ranging from 7 to 45 acres each.
The park is located at the crossroads of five major highways and provides ready access to the business centers of New York City, Philadelphia, Boston Washington D.C. and the Canadian markets, is within a 50 mile radius of a potential workforce of 586,000 residents, and is home to 14 colleges and universities
The Pearl Fund selected this area with the intention that some deal flow will come from the area but it's also ideal space for when the fund’s early-stage investments are ready to scale production such as: manufacturing, assembly, packaging and shipping of their products. By locating these services outside New York City they can operate at a significantly lower cost and remain Qualified Opportunity Zone businesses. In addition, they can receive additional state and local tax benefits and the cost sharing and collaboration that comes from a facility with other startups in a similar phase of their growth trajectory.
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The Pearl Fund Limited Partnership: 75 West End Avenue, Suite P31D, New York, NY 10023
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