Alfonso Costa Jr. of Falcone Group: 5 Questions

Before he was CEO of Falcone Group in Boca Raton, Fla., Alfonso Costa Jr. was a deputy chief of staff at the U.S. Department of Housing and Urban Development during President Donald Trump’s first term.

Costa had a front-row seat for the rollout of opportunity zones, an effort to encourage development in specified blighted areas through tax deferments. Costa also is overseeing the redevelopment of the former city hall in the Fort Lauderdale suburb of Oakland Park, Fla.

The following conversation has been edited for length and clarity.

Commercial Observer: Opportunity zones had a splashy rollout. What’s the status of the program now?

Alfonso Costa Jr.: There’s been a lot of exciting updates on the opportunity zones front.

The One Big Beautiful bill that was signed into law on July 4, 2025, made the opportunity zones program permanent. It also established what’s going to essentially be known as Opportunity Zones 2.0, whereby new census tracks will be designated by governors and certified by the U.S. Department of the Treasury this year, and go into effect in January of 2027. 

There are also enhanced and new benefits associated with Opportunity Zones 2.0, such as the fact that investing in rural opportunities zones will allow for a 50 percent improvement test as opposed to the standard 100 percent substantial improvement test.

Also, there’s a rolling five-year deferral period. So, no matter when you invest in the new 10-year time frame, starting in January of 2027, as long as you’ve held your investment for five years, there’s no shot clock or time period associated with the deferral.

It’s a rolling five-year deferral as opposed to an Opportunity Zones 1.0, where you had these time frames of investing before the end of 2019 to get the 50 percent step-up in basis, depending on or requiring a seven-year hold, by the time you reach the end of 2026, or investing in a qualified opportunity fund, before the end of 2021, in order to get the 10 percent step-up based on a five-year hold period by the time you got to the end of 2026.

So there’re no time frames or set dates that require the investment to be made during this next 10-year time frame.

If you had to assign a letter grade to the opportunity zone policy so far, what would you give it?

I would give it an A. 

More than $100 billion has been invested in OZs throughout the country. If you think about it, especially given the final regulations published in December 2019, and then understanding what happened with COVID, to still have had such an incredible amount of investment, despite construction costs, interest rates, insurance, especially in certain parts of the country, including Florida, to still see so much investment, and so much housing supply, job creation, economic growth and output throughout the country, but especially in opportunity zones. 

I think it’s been a very well-received initiative, and I think that’s why its inclusion in the One Big Beautiful Bill was very exciting for stakeholders across the entire ecosystem of opportunity zones, especially now that everyone has their feet underneath them in terms of having several years to fully understand the regulations.

As a developer, what projects are you working on?

We broke ground last year on a 240-unit workforce housing project in Jacksonville called Momentum Blanding. It’s a workforce housing or attainable housing project, with rent at 120 percent of area median income, using Florida’s Live Local Act.

We’re also breaking ground later this month on a historic public-private partnership with the City of Oakland Park, just north of Fort Lauderdale. I’ll be purchasing the former city hall site, which is 4 acres, and building 311 apartments of which 10 percent of the units are set aside for workforce housing, and also including 20,000 square feet of retail. We’re building the city a new park. We’re building a woonerf, which is a Dutch word or term for a pedestrian-friendly street.

Is that a car-free street?

It does have vehicular access and drive-through, but there are a lot of traffic-calming measures. It’s fully pavered, and is surrounded by a lot of pedestrian-friendly elements — picnic-oriented areas, cabanas and trellises, benches, etc. Not too dissimilar from what you see like on Clematis Street at West Palm Beach. 

We’re really excited about Oakland Park. It’s become known as the Brooklyn of Broward — a small-town city with a big heart. The RFP process started at the end of 2021. We competed against the likes of Terra, Merrimack Ventures and a lot of other really qualified developers, and we were successful winning the project in March 2022. 

We’ll be getting all of our permits here shortly and we’re breaking ground on the park, which includes two pickleball courts, basketball court, tennis courts, open-air pavilion, picnic area.

What’s your biggest challenge?

I think right now, the biggest challenge for most general partners or sponsors is common equity still has one foot on the sidelines, one foot in the game. Just seeing how the evolving dynamics of the economy as well as international or geopolitical situations evolve. 

Common equity is still very intentional and rightfully disciplined in how they’re underwriting projects, and that continues to be something that we as an industry continue to try to really give our investors and prospective investors the conviction that they need in order to move forward on projects.

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.