#3 - Brion Crum on Arizona Opportunity Zones - Scottsdale Arizona [VP of Investments @ Caliber Companies]

Have you heard of Opportunity Zones but you're still unclear what an Opportunity Zone is and how it benefits the community as a whole.  Brion Crum, VP of Investments at Caliber Companies joins the show to tell you everything you need to know about Opportunity Zones. What are they? Who do they benefit? Are they working? 

Most importantly, he's going to discuss how Opportunity Zones are making a positive and immediate impact on Arizona communities all around the state.  From hotels to hospitals, Caliber has become a leader in the state of Arizona in helping to make lower income, high unemployment rate communities desirable places to live, work and thrive. 

Brion takes us through several examples of how Caliber has not only helped to bring valuable services and jobs to struggling communities but also how their projects have assisted municipalities in dealing with difficult issues like mental illness and homelessness.

Brion will also tell you how you may be able to put your investment dollars to work by assisting in the effort to make AZ a better place to live while benefiting from some amazing  tax benefits.

It's Time to Podcast!

To reach Brion direct:
Brion Crum
Brion.Crum@CaliberCo.com
480.881.1906
www.Caliberco.com

Transcript

Hey, yes, indeed it is time to Podcast. Today I have a really exciting conversation. One of the things
coming out of DC right now is a lot of conversation about, you know, things like raising the minimum
wage, and things like how people earn a living wage and those types of things. But I think one of the
best pieces of legislation that's come out of DC in the last five years, is something called opportunity
zones. And you may or may not be familiar, maybe you've heard the term opportunity zones, not quite
sure what it is. Today, I have a guest that is literally an expert in this area, they work with opportunity
zones every single day. And so we're gonna learn what opportunity zones are, but more importantly,
what's happening here in the state of Arizona, and how opportunity zones are benefiting communities
right here in our backyard. But before we do that, let me quickly introduce my other YouTube channel
that is Phoenix homes and hotspots, Phoenix homes and hotspots is basically, if you if you think about
it, from a standpoint of somebody moving into a different area, it's very easy to go online and find an
actual home today. The difficult part is understanding the community itself, and the surrounding area or
the actual lifestyle of that home. So what we've done with Phoenix homes and hotspots is we've gone
out and created videos, put them on YouTube. And those videos are designed to help you get familiar
with not just homes, but communities, what these communities have in terms of amenities. But then
also what are the restaurants What are where are the golfing opportunities, where's the closest hiking
and all the stuff around it, we're really giving you a visual of what that lifestyle around those homes look
like. So Phoenix homes and hotspots, again, very easy to find homes online. One of the challenges
with with home shopping online is you put your contact information. And if you find the home you like
and you put your contact information in to like a web form, then you get a bunch of realtor calls. So you
can actually go to Phoenix homes and hotspots.com and just collaborate directly with us. And we'll get
out videos to you. So you can actually get not just see the home. But see that surrounding area as well.
If you are listening on one of our audio platforms, you can go to Phoenix or I'm sorry, youtube.com
forward slash Phoenix homes and hotspots. If you're watching on YouTube right now, just click the link
on the top right hand corner. It'll take you there, you can subscribe, hit that bell and that way that'll
notify you every time we create new great videos. With that. Let's jump in and I'm super excited about
this. Let me introduce Mr. Brian Crum from caliber companies. You are the VP of investments correct
here at caliber? That's correct. Welcome, my friend.
02:58
I'm excited to be here with you, Todd.

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03:00
Awesome, man. I'm super excited. So let's start before we jump into opportunity zones, because we're
going to focus most this conversation directly on that. But just so people have have an idea. I was
introduced to caliber, I think back in about 2014 2015 actually worked with you guys for several years,
from a real estate and commercial like kind of residential real estate and commercial aspect. But you
guys were up to some really exciting things. This is a super innovative company. And you guys just
continue to transform yourselves. So tell everybody a little bit more just so they have an understanding
who is caliber and what is what is it that you guys do? Yeah, todos
03:37
great working with you. I actually joined caliber around the same time in 2014 caliber is a Scottsdale
Arizona based real estate investment development company and what we do on behalf of our
investors, we acquire, renovate, build and operate income producing real estate. A lot of this has now
become in the opportunity zones. And we're diversified in a multiple asset classes in the geographic
southwest. We have hotels, office buildings, apartment communities, including student housing, we're
going to be developing assisted living. We literally build a hospital last year during COVID. And a lot of
this is around the opportunity's own program. So I was so excited when you wanted to cover this as
one of your topics.
04:23
Okay, so going back so calibre has been in business since
04:27
calibre was started in 2009. Specifically, to help investors take advantage of the displacement that
occurred because of the recession. Calibur started off with several young real estate entrepreneurs,
basically buying homes off the courthouse steps on behalf of investors, and then gradually moved into
commercial real estate started buying off market apartment complexes and hotels and renovating them
and even reinvigorating some of those communities. And then today, because of the opportunity Zone
program, we have the opportunity to Get involved with community revitalization. And it's not just going
to be happening in Arizona, we're expanding into Texas. We've got some pretty active projects in
Colorado. And we're just excited to be able to make an impact in the communities with these
revitalization projects.
05:16
Yeah, when I was with caliber, and I think I was here from 2014 to 2016, if I remember, right, but when I
was with caliber, I mean, there was a huge emphasis on hotels. So again, um, you guys just continue to
watch the market. Obviously, times have changed a lot, especially with COVID, the last two years, and
you guys just continue to evolve. So it's really impressive to watch what you guys are doing. And when
I found out you were really focused so heavily on opportunity zones, I was just like, Yeah, we have to
sit down and, and discuss that. So what is your story? How do you? How do you and going back as far
as you want, right? Like for me, you know, being in the real estate business, I always had an interest as
a kid in real estate, right? Not necessarily as as a real estate consultant type of thing, which is
ultimately what I am today, but really on the investment side. So why did you have a passion for

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investments growing up? How do you what's your story? How do you end up here at caliber for as long
as you have as successful as you bend? How does how does that evolve?
06:15
Yeah, it definitely all started when I was growing up on the family farm in Ohio. Looking back on it, I
didn't appreciate this at the time, my dad owned a business and he was a farmer. And it didn't dawn on
me until I started learning more about real estate, that everything that my family did was tied to a
business. So that being an entrepreneur, and then being a farmer, and the farm house that I grew up in,
my parents never had a mortgage on it, because it was a loan that they used to buy the farm. And I
remember my dad always saying that, if you do something related to the ground, that it's hard to lose.
And the reason for that is if you own dirt, it always has some sort of an intrinsic value to it. So fast
forward to today at caliber, now I understand what the difference was between when dad owned a farm,
and when dad would start selling off parts of the farm to home builders, and the difference that that
made in the value of that land. So after I graduated from Ohio State, and moved to Arizona, I worked at
Merrill Lynch for several years. And I got to the point where I was helping investors, you know, do well,
but I didn't have the ability to let people invest directly into real estate in Arizona. So when I met Chris,
the founder of caliber, I really was attracted to the mission of helping good people invest into real
estate, and have an impact on the local community, instead of potentially investing into a fund that then
that money, went back to Wall Street and never came back into the community. Right. So I really like
that mantra of investing where you live banking locally, and then being able to invest into the
community that you've been able to be successful with your business.
08:07
Yeah. So good. I think, you know, anytime a story starts with a farm in Ohio, you know, it's a good
story. So, so let's jump in then what is, you know, by definition, but I mean, what is not? That's always
the definition of it. But what is what is an opportunity zone? I mean, if for some of this just never even
heard the term before? What is it?
08:30
Yeah, the history of how an opportunity zone became about is really pretty interesting. And it goes back
to about 2015, there was a working group called The Economic Innovation Group. And this included
politicians from both sides of the aisle, and included successful business people, and even some of the
original founders of tech companies like Facebook. And they were trying to figure out what do we need
to do to reinvigorate certain parts of the United States. And they're identifying that there are certain
areas that just hadn't seen the same level of success in recovery after the 2008 and nine recession.
And one of the key figures that they recognized is that those areas that haven't really recovered, also
lacked access to capital. So the plan was, what can we do to incentivize people to invest into these
underserved communities. And what they decided to do was create the opportunity Zone program that
was originally put into legislation in 2016. And it got in front of Congress and it failed to pass. And then
at the end of 2017, instead of the tax cuts and Jobs Act often called the Trump tax bill. It was finally
approved. What an opportunity zone is and how they work. An opportunity zone is a geographic census
tract. There are literally like 8700 of these opportunities zones across the whole country. Over 160 of
them are in Arizona. Part of what we're going to talk about today are some of the opportunity zones that
calibre has been investing into. But it's important to understand the foundation behind why was the

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opportunity's own program started. So this is how it works. If you're an investor and you have a capital
gain, keep in mind, it doesn't matter what you sold. It doesn't have to be just real estate. It doesn't have
to be stocks. We have people selling Bitcoin and cryptocurrencies. They're taking their profits and
investing them into opportunity's own funds. So any capital gain, if it's invested into a qualified
opportunity zone fund, that then deploys at least 90% of that capital into qualifying businesses in an
opportunity zone, you get three tax benefits. The first tax benefit is a total deferral of owing any capital
gains taxes, and this is at the federal level, most states participate, Arizona does participate on the
state level as well. So in Arizona, if you invest into capital gains into qualified opportunities on fund, you
get a deferral of both federal and Arizona state capital gains taxes until the end of 2026. first benefit is
deferral second benefit actually ends at the end of 2021. So at the end of this year, the second benefit
actually goes away. The second benefit is a 10% reduction or a 10%, step up in the original cost basis.
And I'll give you an example. If you invest $100,000, in an opportunity zone fund, by the end of this
year, when you get to the end of 2026, you will only recognize and pay capital gains taxes on 90%. So
$90,000, so you get a reduction in the amount of the original capital gain. But this is where it gets really
powerful. After a 10 year holding period, and investment in a qualified opportunity's own fund will
actually have a total exclusion of future capital gains taxes after 10 years. So that $100,000 reduces to
90,000 being taxable in 2026. And then after a 10 year holding period in an opportunity zone, when
those assets are sold. If there's a profit, the capital gains get distributed, 100% tax free. So it's almost
like a Roth IRA at that point.
12:11
Wow. So the benefit that ends at the end of this year, does that mean that you have to make an
investment before the end of this calendar year to get the to receive that benefit? Want to any is that
understand that correctly?
12:24
That is correct? Yeah, the investment has to be made by the end of 2021. To get that second benefit,
which is a 10% step up in the cost basis. Got it? Okay.
12:35
So, who benefits? I mean, you've touched on, you know, we've kind of you've touched on it, but now
specifically, who are the beneficiaries of an opportunity zone who has the opportunity to benefit across
the board?
12:51
One of the things that Arizona did a great job of the the census tracts were actually selected based on
what the 2010 census looked like. And the two rules that you had to follow as a community that was
picking where your opportunity zones were going to be? Did you have census tracts that had 85%, or
below the average median income? Or did you have 20%, or greater unemployment. So when all of the
cities and towns and counties in Arizona looked at the rules and started picking their census tracts, a lot
of them wanted them to be in their downtown core areas, if they qualified, as well as transit corridors
along light rail is a great example. And also around airports. So these are all areas that you can put a
focus on, if it's in an opportunity zone, you can use it to attract businesses and attract capital, I'm going
to talk about a couple different areas that have been really revitalized. And a lot of it was related to job

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creation, calibers, building hotels, or building hospitals. We're also investing in a co working space. So
those all have a direct benefit of jobs that are being created not just during the construction phase, but
these are brand new businesses that didn't exist before. So the first benefit is a job creation
component. The second benefit is identifying what does at each individual opportunity's own as a
community really need, you know, where are they lacking? So you go out there and you talk to a lot of
the stakeholders. You talk to the local business owners, you talk to the residents, you talk to the city's
their economic development. A lot of the mayor's are actively involved in this program, especially in
Tempe and Phoenix, and Mesa, which are three of the main areas that we've been investing into. And
you ask them, What do you want to have happen in your opportunity zones? Why did you select this as
one of those geographic census tracts that we could rate raise capital into and deploy it to make an
improvement, and a lot of them want to have more affordable housing, affordable housing, workforce
housing, there's over 25,000 apartment units that are being built right New ground up today in Arizona.
But there's a projected need of over 200,000 multifamily units. If you build them to be affordable in
opportunity zones, especially if it's near where people are going to work, you can also reduce traffic. So
there's also looking at the impact on the environment as well. big emphasis on doing renewable energy
as an example, if you build something, build it to be very energy efficient, put solar on it, anything you
can do to reduce the costs for those residents, because the higher someone's electric bill is, as an
example, that's less money that they have for something else, which could be food, or medicine, or
even just the ability to save and invest for tomorrow.
15:47
So number one, I mean, when we talk about who benefits number one is, if I heard you correctly, right,
number one is the resident, the whole focus of the program is to take less fortunate communities that
have high unemployment, that are struggling, finding affordable housing, and just cost of living in
general, and trying to create benefits for less fortunate folks, folks with lower lower income type of
communities, correct?
16:17
Correct. That's definitely one of the areas of impact.
16:19
Number two would be the city, right, and so that the city benefits because now we've solved a bunch of
problems, or challenges that the city faces such as affordable housing, such as the potential for more
homelessness as a possibility. Right, right. And so when you solve the city problem, a lot of time you
saw you solve some sort of problem for the residents, although, you know, if you're a middle income or
higher income family, you may not feel the impact. However, down the road, there are things that you
may feel the impact. So we're solving a challenge for the city, we're solving a challenge for the
residents. And the number three is, in terms of who benefits obviously, and we'll talk more about this
here in a little bit. But number three is that you have an opportunity to actually invest, you know, if you
meet certain credentials, and again, we won't talk about it now. We'll talk about it here in a little bit. But
you have opportunity to invest to help better these communities. Number one, but also you get some
really great tax benefits. Is that pretty much the right areas that you would say in terms of who who
benefits? Yeah, definitely. Yep. What is it again, you kind of touched on this, but maybe expand a little
bit. So what is? Well, maybe, maybe you've hit it all. So So I was gonna ask you, what is the positive

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impact on communities? But I guess you'd really kind of summarize that. I mean, is there anything else
so you talked about trying to expand employment, we've talked about trying to create more affordable
housing, and, and, and, and decrease the cost of living make the cost of living more affordable, is there
anything else I mean, in terms of positive impact that you're seeing that, that these programs are
creating?
17:56
Yeah, I'm gonna give you a couple examples that actually take a few of those different factors into
account the actual premium that's happened to community. And I'm going to use the example of a
behavioral health care hospital at caliber built last year, so caliber actually built a hospital in the middle
of COVID. Obviously, very challenging, but our team did an amazing job working through all of those
challenges. And what we did in that community in particular, we acquired a vacant assisted living facility
where there are homeless people doing drugs. And this is in an area where right behind the hospital is
a historic neighborhood where there's a lot of pride in the the community, and across the street from it
are some of the largest hospitals in Arizona. By buying this vacant assisted living facility, we were able
to make a difference in that community. Not only did we create over 100 jobs, because now there's a
96 bedroom hospital there. But people that were not getting mental health care treatment, now have
another place to go to receive treatment, which could include include people who may have been living
in homelessness had drug and addiction problems. So we've got a job creation component. We've got
taken a vacant facility where there homeless people living, which could have been causing some crime
for the local homeowners. So we've gotten rid of that. And then some of those people that may have
been displaced, probably were in homelessness, potentially, because of drug or other addiction issues.
Now they can actually get treatment, potentially in the same facility where they may have been living in
homelessness. So that's a great example.
19:37
That's an awesome example. So here's the big question in my mind, as is everything in DC everything
is very polarized, right? Have you really this crazy polarized climate and so you kind of went through
the timeline earlier of how these things how an opportunity zone came about, but at the end of the day,
it was enacted in 2017. under Trump with the under that jobs and tax cuts act. And so, you know, a lot
of the critics, you know, when you talked about opportunity zones, people people wanted to deflect I
mean, this is what I was hearing in the initial year to now I'm not saying today, but I'm just talking about
initially, people kind of wanted to deflect Well, yeah, that's not really working anyway. Right. It's almost
like Trump did it. Let's let's let's pull the rug out from under that. Let's, let's stop the conversation on
that. But again, that was in year one, year two, and there were definitely people trying to deflect and
make it sound like it wasn't a big deal, which I think was, you know, I think at the end of the day, I was
like, Hey, let's give this a shot. Because it seems like a pretty good piece of legislation, regardless of
who it was enacted under. And you said it was a bipartisan bill that was well party supported. So at the
end of the day, so here's my question. Is it working? And you've already given a pretty good example.
But I mean, from what you're seeing, is it working? And you think that this is something and you know,
at some point, some of these tax incentives are going to go away as well. Now, maybe some of them
get reinstituted as we go. But is it working? And how do you think? If so, do you think it will continue to
prosper into the future?

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21:11
Yeah, there was definitely a lot of criticism around the fact that this got passed under Trump, because a
lot of people were saying, Hey, this is going to be a way for people that made a lot of money in real
estate, like Trump to be able to defer taxes. And you don't, you know, there's no disagreeing with that.
But the average person has been investing with us. These are hard working people, they might have
been selling some real estate, they might have had a good year in the stock market, a lot of families are
in the process of selling, you know, generations of family businesses, these are hardworking people
that are actually being able to take advantage of it, including people that might even be investing some
of their charitable trusts into these opportunity zones. So we're definitely seeing a lot of people across
the country being able to take advantage of it. And they're really excited about the impact that they can
have on the community with their dollars isn't working. What we've seen is it's absolutely working
because we have all these great examples of revitalizing communities. One of the investments that we
completed earlier this year, was the completion of the Tucson Convention Center Hotel. So it's a Hilton
by Doubletree. There's about 430 Double trees in the country. This one is already ranked as one of the
top hotels in that brand. As far as like customer service and things like that. We were in conversations
with local business people in downtown Tucson, they're already telling us that they're seeing an uptick
in traffic, an uptick in the number of people that are coming to events and staying down there, because
now there's a hotel connected to it. And it's not just a hotel connected to a convention center, it's also
connected to an arena. So there are people that are coming down there for concerts and sporting
events that are staying in the hotel, they're going into the local businesses down there. So this is really
an example of yes, we build a hotel in an opportunity zone, but it's already having an impact on bringing
more people down to that area. And when you're doing that come in out of COVID. That's crucial,
because a lot of those businesses struggled just to stay open. So now the fact that you're bringing more
people into an area that are benefiting the local businesses, help them create jobs. I think that's a great
example of another success of the program.
23:36
So you just mentioned revitalization, and revitalization is nothing new in and a lot of times when you
hear when you think about opportunity zones, or when I hear opportunity zones, to me, opportunity
zones and revitalization almost go hand in hand, they really seem like the same thing. Are there other
than the tax benefits that were actually enacted with this particular program? Are there other I mean, is
that pretty much what we're talking about as revitalization with tax benefits? Are there other
differences?
24:04
I mean, there are there are areas where you don't have to do revitalization, but you might have vacant
land. And depending where it is and what the nature of the zoning is. You could literally be building
hospitals, you could be building, mixed use communities, you could be building more affordable
housing. So it doesn't have to be just an existing property that gets revitalized, is looking where is the
demand for certain types of real estate, certain types of businesses, and then building ground up. You
know, the first hospital we built was a renovation. The rest of the hospitals that were in the process of
planning to build in conjunction with very established operators, a lot of them were going to going to be
ground up. So there's going to be a lot more mental health care services being provided in those areas.
And there's been a shortage of health care, treatments and just recognition of the need for Across the

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country, and the fact that these opportunity zones are being used to bring more behavioral and mental
health care to people in those communities, I think is another great example of this program working.
Yeah,
25:12
for sure. So we talked about caliber, and, and, and kind of going through the process and how calibre
continues to evolve as a company, right from its inception through when I was here, hotels. So you start
to hear this buzzword opportunity zones is coming, it's coming. When I mean, is this something that you
that you hear coming down the pipeline, and as a company, you're just like, hey, when this hits, we're
hitting the ground running. I mean, when when do you guys jump into this thing.
25:43
As I mentioned, the program was put into law at the end of 2017. But it took a couple of months at the
beginning of 2018, for all the states to kind of understand the rules and start making the selection of
where their opportunity zones were, Arizona was one of the first states in the country to actually pick
where their opportunity zones were going to be. And when they announced them. And then when you
look at what the rules are, which means that you have to basically make a substantial improvement in a
building when you buy it. So you can't just buy an apartment complex, you know, new paint, new
carpet, rebranded and meet the rules, you literally have to either do a total renovation like we did with
that hospital, or you need to build something ground up. When Calibur looked at where the opportunity
zones ended up being designated in Arizona, we identified that we were already investing in these
areas, because we saw that they were up and coming we could get good deals there. And we're
building something those communities needed. At that point, even though we had just launched
another fund earlier, and 2017 and had no plans to launch a new fund, we knew this was something
that we had to get involved with. By the middle of 2018, very few opportunities on funds had actually
been established. So we started creating the fund. And we opened our fund up in the fourth quarter of
2018. And it's really been a huge difference in the amount of deals that we're doing. We've been hiring
people here at caliber, caliber alone has had hire probably 20 or 30. More people on our team just
execute these opportunities on strategy. And that's the marketing the raising of the capital, deploying
the capital, where we have project managers that oversee all the different construction projects. So we
caliber have actually been creating jobs as a result of launching an opportunities on fund.
27:35
What was this a huge leap for you? I mean, in other words, you were doing other stuff you weren't, this
isn't exactly what you were doing? Or did you find that like, Hey, this is it's already in our locations,
place we're already investing, we could really use another opportunity to create opportunities for our
investors. But in terms of the projects themselves, was a giant leap like, hey, we have to now learn
something completely new, or was it like, Hey, we're already kind of doing this. We're just not not
necessarily hospitals. But we're but this is right up our alley? Was it? Was it a big shift? Or was that a
pretty easy transition?
28:10
There are a lot of rules, you have to follow in these opportunity zones to make sure that you don't run
afoul of the requirements. So there's definitely learning curve, you know, we hired a brand new person

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solely to oversee the tax aspects of it. So it's definitely a large learning curve. But because we've been
actively involved in the opportunity Zone Program, basically, since the day that it was created, I think
that we've learned a lot. And it really, even though it's an extension of our business, it was something
that we're already looking, expanding, you know, diversifying into other asset classes into other
geographic areas. And a lot of what we've been doing outside of the opportunity Zone Program, those
deals are coming to us, because we have this very visible opportunity's own fund that has some
successes under our belt with the completion of this hotel, building this hospital, we're in the process of
building a co working space in downtown Mesa. So it's really just a natural extension. And it's been
really exciting to see the impact that we've been able to make on these different communities on behalf
of our investors.
29:17
So there's obviously when the government creates something like this, you have to go through a
process. There's a lot of probably red tape regulations and all of that stuff that a company must qualify
for. So So is that what you're saying? Like a lot of that? I mean, what are some of those regulations?
What's an example of something that's like, hey, we need to hire additional staff members, because this
particular regulation, we just have to figure out how to navigate through it like what would be some of
those regulations that are just Yeah, hard, difficult to navigate?
29:45
Yeah, a couple examples and it also talks about the team that we put in place, including the the legal
experts and the accounting experts that also had to dig in and start understanding what these rules
were to make sure that we at caliber also understood them. There are certain types of leases that you
have to have, you have to have some active involvement. So you can't do triple net leases out as an
example. Okay? So you have to make sure that who your tenants are, understand what those rules are,
and that your leases are being written properly, you have the substantial improvement rule. And I'll use
the example of the hospital of how you can't just buy a building and do a minor renovation and meet the
requirements. So the substantial improvement rule basically is $1, for dollar improvement in the value
of the building that's in an opportunity zone. But you can exclude the value of the land. When we
bought that vacant assisted living facility in central Phoenix, they got converted into the hospital, we
paid about $12 million for the land and the vacant building, and then put another $11 million into it. So
we're all in for about $23 million on a basically what became a brand new hospital, we had to make
sure that the amount of the improvement that we made in that property met that substantial
improvement. So that's another example of it.
31:04
Okay. So let's shift and let's talk about for me, when I think about a prosperous community, there's a
couple pillars and a foundation, this is the way this is the way I think about it. Right? So for me, if I want
to have a successful community, meaning like a neighbor, when I say community, I'm talking about
neighbors, not the people but the neighborhoods themselves, right. I think, number one, you have to
have great educational opportunities. And number two, like one pillar education, pillar number two, is
economic, economic opportunity. But here's the thing, it's very hard in my mind to create education and
economic opportunity if you don't have a foundation of safety. Right. And so one of the things that we're
you know, that we're seeing, again, spreading across the country, and not to get down, you know, a

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rabbit hole with this, but you know, you have defund the police. And it's like, well, how do you take
these communities and makes them successful if you're going to increase violent crime? 100%, in
some cases is, which was what we're seeing. So when you go in, and you and you say, Okay, we're
going to take this area now, a lot of these less fortunate neighborhoods, these lower income type
neighborhoods, one of the issues that's there, maybe not always but but as a general rule, crime is one
of those things. You talked about homelessness earlier, and some of the potential crime that could
come from from that. And so is Is this one of those things where you go in and you say, Hey, we're, you
know, our job? In other words, there's a few things here. Is this something where you start to
collaborate with community leaders and say, Look, we're coming, we're bringing, but what we need is a
strong foundation, we got to clean this thing up, because otherwise what we're doing isn't going to
work, or do you build it, and then hope and assume that everything around that including crime is going
to get better as a result of what you've done?
33:06
There is a lot of community involvement and collaboration around these. Part of it is just by the nature
of the fact that most of the investments that are happening in the opportunity zones are related to real
estate, which means that you do you need to have the buy in and the approval of the community. So
we're actively in conversations with the mayors and the council's and economic developers. And we
actually go to them and say, What does your community need? And I'm going to use downtown Mesa
as the example. For anyone that isn't familiar with Mesa, if you're listening to this podcast from outside
of Arizona, Mesa is the 30th largest city in the country. It has the benefit of being connected to Tempe,
which is where Arizona State University is based. Arizona state university wanted to build a new
campus in East Valley. And they're building it in downtown Mesa in an opportunity zone in a slight right
on the light rail, which means that there's going to be more educational opportunities for people. And
this is a very cool sophisticated technology focus campus. Kids are going to be learning about artificial
intelligence. The city of Mesa has already been attracting companies from Hollywood as an example, to
tap into that those resources. What calibre has been doing in the opportunity zones in downtown Mesa
has all been in conjunction with the planning of the ASU expansion is been with the blessing of the
economic development groups, the mayor, the city council, and because we bought vacant buildings,
as we're renovating them, we're creating jobs. We're bringing forms of businesses that are typically
expansions of successful businesses and other parts of the state that want to be in downtown Mesa
because of the excitement around this expansion of Arizona, Arizona State University. So obviously, if
you're taking multiple vacant buildings, or ones that had you know, the the A good example of it is an
antique store that used to be one of the original downtown Mesa department stores. So it was originally
built as a department store, and then it became an antique store, when we bought it, we started
renovating it to convert it into a co working space, where now we're going to be helping people create
jobs. So if you look at that community, you're also going to identify that there are a lot of people that
would love to be able to have the opportunity to start their own business, but they're not sure how to do
it. So those resources are going to be brought into that community, we're going to be helping people
create jobs, we're also going to be building a food services company. So it's an expansion of an
existing business is doing very well out of Texas. And it's gonna be a way for people to launch a food
services business, and be in an area where people are going to be coming there. So in conjunction with
the City of Mesa, you know, if there is crime down there, then the city of Mesa is going to be proactively
looking for, you know, how does the person that's down here need help? You know, do they need to be

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tied into a nonprofit that is providing them with affordable housing, or mental health services. So there's
absolutely a collaborative effort that includes nonprofits, that are providing resources for the people that
are in those communities, while calibers down there, during the renovation, helping people create jobs,
and bring some some more activity down to these communities.
36:35
So there's a collaborative effort, effort. And obviously, it's not it's not your role in terms of crime. So it's
like, we're kind of trusting the city, we collaborate, we trust the city, and at the end of the day, you're
going to build it. What about? And again, it may be that in Arizona, we probably you know, we don't
have probably the kind of issue that you would have in LA as an example. But I mean, or maybe you
do, maybe you've gone into a community like, hey, it's not just homelessness here. That's not the kind
of crime we're talking about. We're talking about drug dealing, and, and murder, and, you know, gangs
and stuff like that. Have you worked on any project? Like, do you guys have a project like that? Where
you're like, man, is this gonna work? Because this is this is going to be pretty, pretty tough to clean up?
Do you have anything like that? Or as most of your stuff kind of more? Along the lines? I know, you've
talked quite a bit about homelessness and some of that kind of stuff.
37:27
Yeah, most of what we've been doing have been in the middle of communities. So if there was already
issues with drugs or homelessness, by being able to bring more, more people into those areas, whether
it's building more housing, or helping people create jobs, you know, that's really up to the municipalities
to deal with that. But there are definitely issues with homelessness and drugs in Arizona, probably more
so than than at any other point. So I think that if you can build a hospital where people can get
treatment for drug addiction, that yeah, own is a good way to, you know, help make an impact.
38:08
Absolutely. Absolutely. So I'm a little bit of a nerd for the behind the scenes. So give it give us a step by
step like you you find a location you find a need take a take me kind of through like you don't have to go
through every little single nuance, but but take take us through kind of like how do you go from A to Z
from in from finding an opportunity and a location you're interested in in a location as a need to taking it
all the way to an investment process? What is kind of like the basic steps along the way?
38:47
Yeah, I'll give you a couple examples. A lot of what Calibre is doing these are joint ventures, sometimes
even public private partnerships. The Tucson Convention Center hotel is a public private partnership
with Rio nuevo downtown Tucson, redevelopment nonprofit. And we were working with them to meet
the requirements of an RFP. So we could win the opportunity to build that hotel when the opportunity
Zone Program was created. So when we found out that downtown Tucson was an opportunity zone, we
were almost to the point where we had won that competitive competitive RFP process to be the
developer and the owner of the Tucson Convention Center hotel. It takes years of planning and going
through zoning just to get to the point where you can break ground. So once you get to the point where
you know that you're going to move forward with a project, you put the pro forma together, you start
sharing it with your investors at the same point that you're working with who your construction team is
going to be. So you have to put a team together. Typically the team is going to be your architects, your

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engineers, the construction companies, so Calibre is going to oversee that. So you go from the idea,
hey, it would be really great to be able to build a hotel connected to the convention center, and then go
through the legal wranglings and the political opportunities to actually get to the point that you get
approved. And then once you get to that point, you can start the building and the construction while
you're bringing in who your operators are going to be. So you have to pick the team that's going to
actually manage and operate the hotel. So it's literally can be three to four years from the time that you
start a project until it gets completed, is up and running. A lot of what we do is a joint venture. So that
means that someone else has already identified that there is a need for another hospital in a
community. We're in the process of building a school. We're building a school in an opportunity zone,
which is going to create more educational opportunities in that area in that area Charter School, a
private school, private school, but it could it could be charter schools, at the end of the day of school is
a business just like anything else, and they need a campus. So Calibre is going to be building an
expanded campus for Rancho Solano school. You know, that's been two years in the making. And
we're getting ready to break ground before the end of this year. So that at some point, those kids will be
able to all be on the same campus, next to the high school,
41:25
very nice. So I want to let everybody know that anybody is listening on the audio versions of the
podcasts that if you check out the YouTube version, we're going to run some B roll, just showing some
of the projects and just kind of a little bit of some of that behind the scenes or some you know, some of
the projects that you guys have actually worked on or are currently working on. So if you're listening on
the audio versions, make sure you go over to the YouTube. And again, you can find that it's huge. If
you if you just put it into the search criteria, right now interviews with Arizona, and it'll pop up once we
have 100 subscribers. So go on and subscribe. Once we have 100 subscribers, then it'll be
youtube.com, forward slash interviews with Arizona. So again, check out the YouTube versions for
some that B roll. You've talked about some of the projects that that you've worked on. I mean, we've
already talked about some of the projects. So my next question really was, hey, let's talk let's get into a
few of the projects like some of the cooler projects. You've already talked about some pretty cool ones
are there any other projects that you guys are either working on or have worked on that you think are
just really have been really impactful? from a community standpoint that you want to that you want to
talk about?
42:34
You know, we've already talked about several really cool projects where we literally build a hotel in
hospital during COVID. Yeah, for sure. We're in the process of building that co working space, we're
helping multiple existing successful Arizona businesses with an expansion into downtown Mesa. What
we haven't talked about is something that is in the planning phases. And one of the one of the areas of
interest to make an impact in the world in an opportunity zone is related to sustainability and renewable
energy, caliber, we'll be building what are called Smart Cities and opportunity zones, and the first one is
going to be here in Scottsdale. Wow. So this is an actual official United Nations program. So it's the
United Nations Smart Cities Program, the caliber we'll be participating in. And one of the first examples
of a smart city through this program will be in an opportunity zone with calibre as one of the partners.
And it's going to give us the ability to look at what are the needs of that particular community? Is it
workforce and affordable housing? Is it building a tech co working space? Is it mixed use retail for the

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people that are living and working there. And then these are going to be very energy efficient, they're
going to be the latest and greatest smart building technologies. And we'll be able to use this as kind of
like a showpiece to develop these and other opportunity zones across the country. So that's something
that is in the planning stages. The caliber opportunity's own fund will be one of those investors into it.
So this is an ability for and I'll use the example of a technology founder some of our investors are the
founders of tech companies have received venture capital capital gains for them, they invest capital
gains into our fund. And now they have the ability to make an impact in the community by literally
building smart cities with us so that's something that is in the planning stages that I'm really excited
about.
44:33
So you're saying that's the first of its kind in the country first of its kind in the world like what do you say
first of its kind? You're saying this is the very first project ever or just in what did I understand that
correctly?
44:46
This this will be one of the first examples one of a United Nations Smart City Okay, in the country.
That's correct. Got it.
44:53
Got it. Okay. Before we jump into Before we jump into the fund itself, and kind of just how that works,
what else man? What did I miss? What should people know about opportunities? I think I mean, I have
a better understanding just through where are we at now? 4045 minutes of conversation, I have a
better understanding. Is there anything that you think that is important that we haven't discussed that
people should know about this, these programs,
45:25
you know, a lot of people are finding out about these, because they hear, hey, there might be a way for
you to defer your taxes. And they'll go online, and we'll start doing some research, hopefully they find
our website, they see some content we've created, what we're finding is that there's not a lot of
recognition of this program within the greater financial services community. So it's really important for
CPAs and financial advisors, and trust and estate planning, attorneys m&e attorneys to make sure that
they understand what these programs are, and how it may be a benefit for their for their clients, okay,
because in 2020, because of the impact of the pandemic, there were a lot of deals to, for people to buy
companies that maybe didn't happen that are happening this year. So we think this year in particular is
going to be a large year for people to invest into these opportunity zones. And part of that is because at
the end of this year, you do lose that 10% reduction, the amount of the original capital gain, right, so
just more awareness within the community. Real Estate, if you're, if you are selling real estate, and you
have capital gains, a 1031 is still a great solution for a lot of people. But it's not the right solution for
every scenario when you sell real estate. So capital gains that could be protected in an opportunity
zone fund, as an alternative to 1031 exchanges is another great area of opportunity.
46:53

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So that's a good segue. So let's talk we've talked about some of the benefits, obviously the tax benefits
of investing in an opportunity zone. What what specifically is an opportunity zone fun for somebody
who's like, hey, what, you know, how do you create a fund out of an opportunity zone? What, uh, more
specifically, what is the fund itself? Okay, what is what does that mean? Yeah,
47:13
the fund is a company could be a limited partnership, it could be a multi member LLC. So it's, it's an
entity that is established for the purpose of investing into these opportunity zones. So there's typically
an attorney that's going to draft the document, there are there are investors who have created their own
fund, they might have had a $10 million capital gain on the sale their business and instead of taking
those capital gains and investing into our fund or other funds, they will actually create their own fund.
So that is an entity established for the purpose of taking advantage of this program. But they still have
to meet all the rules and requirements that the caliber fund does. So there's a lot of compliance, you
know, ongoing for the next 10 plus years, you need to make sure that you're meeting all of the rules. So
it can be pretty complex to actually set up and operate your own fund. If someone does establish their
own fund. Now, they still have to find the qualifying businesses and projects that they can invest into.
calibre does have other opportunities on funds that were established that invest side by side into our
deals. So an opportunity zone fund can't invest into another fund. But multiple opportunity's own funds
can invest into the same qualifying opportunity's own business or project.
48:30
So somebody listens to this podcast, and they say, Hey, you know what, I like the idea of investing into
something that's gonna, that's going to make an impact in the community, that, but also where I can,
you know, receive the tax benefits and get a decent return on my money. Who can invest who can
actually get involved in the in the process of investment?
48:53
Yeah, so as I mentioned, anyone that has a capital gain, theoretically could establish their own fund.
49:00
Through you guys, I mean, if somebody that wanted to come to you and say, Look, Brian, right? They
don't want to do all that. But they say, they come to you, VP of investments. Calibrachoa, right? And
they say, Look, man, I want to I want to get involved with what you guys are doing, what do they need,
what needs to happen in order for them to get involved?
49:18
Yeah, the first thing is that they do need to qualify as an accredited investor. And that means that
means that they have met a couple different requirements either related to net worth or income. The
income aspect of being accredited means that if you're married, you have to have an income of
300,000 per year for two years with an expectation that that will continue. If you're not married, it's
200,000. If you're looking at the net worth requirement, it's a net worth of a million dollars or more single
or married, excluding the equity in your primary residence. So if someone has a net worth over a million
dollars, or makes over two or 300,000 per year, there's a good chance that they will be accredited,
there isn't there also, is the ability for someone who has a securities license like a stock broker at the

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series seven securities license, they also are considered to be accredited. And people that actually
work at companies like caliber that understand what these deals are and what the risks are. They can
also be qualified as accredited, but for the most part, it's based on the level of income or net worth.
50:26
Okay, got it. And what's is there? I don't know how deep you go to this. Is there a minimum investment?
Or what does that?
50:33
Yeah, when people when people go to our website, they'll be able to see what those different
requirements are?
50:38
Perfect, perfect. And you had mentioned something to me earlier I was my next question is how do
people contact you? So but you had mentioned something early earlier to me that I think is really
important. And it's funny because I when I heard you say it, it sounds a lot like the reason I created
Phoenix homes and hotspots right is where people can actually go to Phoenix homes and hotspots and
they can say hey, you know what, I people will watch three or four of my videos. They'll go hey, man, I
feel like I know, Scottsdale and oh, by the way, you're you're my guy. Right. But you had mentioned
kind of the same thing with caliber, you somebody could go on to the caliber, what is it caliber,
51:11
caliber co ca l i b e r co.com. And then backslash opportunity. So if they go to Caliber co.com, they can
go on there, you can learn all about the company, you can click on a link to see what the projects that
we're doing are. There's there's one just for the opportunity Zone program. And you can go in there,
you can start watching videos, there's a video just about the opportunity's own program, there's videos
of the different projects that we've done as well. And then we also have obviously a part of the
company that has nothing to do with opportunity zones. So you can learn about non opportunity's own
related investments for people that don't have capital gains, but still want to have a way to invest into
real estate with us.
51:53
And you had mentioned earlier that for somebody that goes on and just kind of checks out a few of
those videos and some of that information it's going to answer a lot of their questions where they're kind
of calling you know, if they pick up the phone and call you they're going to be just that in itself is gonna
educate them pretty well
52:09
there is there's a lot of educational material on the website. They can even download a guide an
opportunity zone guide from there and then once they get through that if they're interested to learn
more they can reach out to us directly through the website.
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So I need to let you guys know something about about Brian something that most people don't know
he's popularly referred to as the what do people call you the human in the human
52:34
link,
52:34
the human link? Is that what it is I remember it's like name I feel like people I feel like back in the day
that you were called a few times I heard you being called the human LinkedIn. Yeah, right. So what is
what is I mean, so what I'm trying to say is I want people to to be able to reach out and contact you and
I know that there's a lot of ways to do that. I think you and I are connected through Facebook and
LinkedIn and
52:56
then your Twitter all the above every I don't tick tock and no one wants to see that somebody's
watching me on all social media except for tick tock I would like
53:05
to see you dance man. I'd like to see you do a little investment dance or something. And then I know
you're a subscriber of both my YouTube channel so I appreciate that my man. So if somebody just
wants to contact you, directly, do you do you want to give your phone number Do they just go to the
website? What's the best what's the best way they say hey, look, I need to talk to Brian about this.
What's what's you know, what's your favorite way to be?
53:30
Yeah, my name is spelled bear uniquely so I'm super easy to find on the internet. Brian is spelled br i o
n. Last Name Chrom CR u m ch just type Brian Crum into a search engine and I'll pop up on LinkedIn
and Facebook. My phone number this one was to reach out directly is 480-881-1906. And then my
email addresses Brian beer I O N dot Crum Cru M at caliber co.com.
54:00
And we'll go ahead and put that in the description below on whatever platform you're watching or
listening on. We'll we'll get all your make sure all your contact information website and all that stuff gets
up. So we'll so just check in the description below for that. Alright, let's transition last little segment. I
always like to promote local, right. So just thinking about local restaurants you and your wife have. I
mean, you're not even you know what, you're not even local anymore. Man. Every time I contact you.
You're like You're like a nomad. Now. Is there your way? Are you still an Arizona resident? What are
you What are you doing now? Like, is there is there a residency status for Nomad because every time I
talk to you, you're in like you're on the beach in Hawaii, or
54:40
yeah, what's he technically qualified to be digital nomads, my wife and I sold our house in north
Scottsdale in April of 2021. And we've been traveling quite a bit and I've been able to work remotely
and be very effective that way. So we lived a couple months on Maui. We're planning to spend some

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time in upstate New York next year. But yeah, no, we're definitely Scottsdale aliens were successful
residents. We just are living to three months at a time in different places around the world which is
pretty cool.
55:09
I'm just throwing you under the bus because I'm jealous. Scottsdale or Phoenix Metro favorite
restaurant you have a place do you have a place that you and your wife?
55:20
Yeah my wife like like a local place? Yeah, my wife and I are both vegan. So we love plant based
locations. Okay, we wish that there were more vegan food places. But I have to give a shout out to one
that calibre has an affiliation with it has several really great plant based choices called cook and craft.
Okay. This is an example of something the caliber did where we basically did a renovation of an old
Comerica Bank branch and turn it into a food and beverage concept. The student very well and they're
actually expanding. So cooking craft Arizona is at the corner of she in Scottsdale chance guys just one
location right now. One location right now they are expanding into the city north area next to Desert
Ridge though.
56:02
Okay, so Shane Scottsdale. Perfect. How about local like a local charity or something that you're really
passionate about that that, that you support that you that you want to get the word out on?
56:15
Yeah, I want to talk about two different things. One is not a nonprofit. But it's a community for
entrepreneurs, those created by entrepreneurs as well is called Eli sciences, el Ian CS e alliances.com.
I actually helped started alliances with a group of friends about eight years ago, about a year before I
met Chris Lafleur, and joined the team here at caliber, but alliances is a community built for
entrepreneurs by entrepreneurs. Even though most of our meetings are held here in Scottsdale, and
Tempe, when the pandemic hit, we started doing virtual meetings with Zoom, and remote CO, which is
a collaborative online meeting platform. And when someone moves to the valley, and they're trying to
find a way to get involved and maybe expand their business, they can become a member. And it's a
great way to help people start and grow their businesses. So love what we do within the community.
One of the nonprofits that is also involved in Ely sciences is a nonprofit that was founded by a mother in
the memory of her son, and it helps foster children. It's called Scott, it's the Scott foundation. So Scott's
foundation.org And there are so many kids in the foster system today, that they don't get the amount of
support as they're transitioning from being a kid into being an adult. And part of what the Scott
Foundation does is they bring them mentorship, they actually have a farm where these kids learn how
to grow their own food. You know, so they basically build a farm up in north Scottsdale in the last
couple of years. And it's amazing to see the impact that the being outdoors has on these kids, because
they love them come from some pretty tough environments. Nice. That's awesome. Yeah. So the
impact that the scout Foundation has on these foster kids is really amazing,
58:11

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very cool. Brian kromm Man, I appreciate your time. I appreciate your knowledge. And I want to thank
everybody for listening. Hey, we have some really, really great interviews coming up on the calendar.
So if you haven't already, if you're on YouTube, make sure you subscribe again, smash that smash that
bell so you're notified every time we do something new and then of course on all the audio platforms as
well make sure that you are connected with us. Until next time, thanks again, everybody for listening.
Thank you, Brian.
58:40
Todd, it was awesome being on the show with you today. Appreciate your brother