Investor groups pitch Opportunity Zone capital for maritime and defense reindustrialization; federal Maritime Prosperity Zones may add new benefits

Ellen Cheng, managing director at Capstone Impact Investments, told GO'Biz webinar attendees that Opportunity Zone funds can be structured to support reindustrialization and maritime supply'chain projects, including arrangements where a federal agency participates as a limited partner.

"We bought land along with the Navy as a limited partner to have a public'private partnership to support the nation ship building," Cheng said, describing a recent Capstone deal that paired public and private capital for industrial development.

Cheng said structured fund governance can include protective rights for government partners (she described a "golden share" veto for certain types of investments) so that projects remain mission'aligned. She also emphasized that large industrial projects often carry complementary workforce housing needs that OZ investments and local planning should address together.

Cheng outlined the emerging federal concept of Maritime Prosperity Zones (MPZs), which grew from a maritime action plan and executive initiatives; MPZs would not be identical to Opportunity Zones, she said, but could be "synthetically tied" by offering permitting advantages, customs or trade'zone features and other incentives coordinated at the Department of Commerce.

She noted states and regions are already preparing MPZ nomination materials and that the Department of Commerce expects to select up to 100 MPZs when the program is implemented; Congress is also considering the "ships act" to flesh out MPZ authorities and a maritime security trust fund.

Why it matters: Cheng framed OZ funds as a tool to mobilize private equity for projects of national and regional strategic interest, where federal participation can help de'risk early stages and anchor development. She urged localities to think broadly about MPZ geography (coastal and inland) and to coordinate OZ nominations, TIF planning and grant strategies to access multiple federal programs.

Next steps and questions: Cheng said Commerce and Congress are still shaping MPZ details and recommended that local governments track federal guidance. On a question about whether MPZ-eligible activity could include domestic maritime fuels (methanol, ammonia), Cheng said the topic has been contemplated at Commerce and will require policy clarification.