Opportunity Zones - Related Party Definition
For anyone here who has experience structuring OZ deals, I was hoping to get some clarity on the related party rule.
Here's the example I am using:
An individual purchased the property in 2018, originally took title in his own name. Afterwards, individual creates LLC and deeds property to LLC, and is the sole member of the LLC. A developer comes along and agrees to help with the entitlement. Does not take an equity position in the LLC, but is paid a consulting fee for 12 months to work through entitlements. All costs are paid by the 100% owner. Developer is given a "manager" title within LLC, but continues to own 0%.
Property is now fully entitled. Opp Zone Fund comes along and wants to be part of the development. Property is sold into a new JV where individual owner can only have 20% max ownership (including promote). The developer also wants to invest and serve as GP/developer/GC. Would developer be considered a related party due to history with project? Or would his non ownership position mean that he is free to invest without restriction?