So hello everyone and thank you for joining us today for this week's lecture and planning series presentation. Our speaker today is one of our own GSAP colleagues, Michael Snydo PhD candidate and urban planning here at Columbia's urban planning program. My name is Marine Abiranam and I am to a PhD student here at the program and I will be moderating the session. I will start with a brief logistical announcement and then introduce our speaker. During the talk, I'd like to remind members to please need to have microphones. We will be recording today's lecture so anyone in the audience who wishes to not be recorded should turn off their camera. The chat box should be used only for discussion regarding the session. So if you have any technical questions that apply only to you please message me or my co-host Joe Hennikens directly. After the presentation we will have time for Q&A and we'll start around 2 or 2.15 to have enough time for everyone's questions and we encourage you all to participate. I will be coordinating the Q&A with attention to diversity and inclusion. So if you've already had a chance to ask your question, please allow others to do so before asking another one. And to ask questions you have two options. Participants can either use the raise your hand feature in Zoom and we will call on you to unmute and ask your question directly. Or you may also type your questions in the chat box as the presentation goes along and I can read them out. So with that I'm delighted to now turn to introducing today's speaker. Michael Snydel is a doctoral candidate in urban planning here at Columbia University's Graduate School of Architecture Planning and Preservation. Snydel is also principal of Snydel real estate, a Baltimore based construction and property management firm. He was formerly the director of neighborhood development of West Baltimore at the Baltimore Development Corporation. His work has been featured in academic and popular news sources, such as the Washington Post, the Financial Times, and the Baltimore Sun. Today, Michael's lecture entitled Missed Opportunity, The West Baltimore Opportunity Zone Story explores opportunity zones that were established by the tax cuts and job acts of 2017. This represents the federal government's largest commitment to play space investment in decades. Michael questions the early evidence of its effect and presents finding from 76 interviews with community and government officials, program managers, developers, businesses, and fund managers about opportunity zones, economic development outcomes in West Baltimore. Michael concludes with a set of short term policy recommendations and discusses the broader policy framework that is necessary to attract durable and equitable investments into highly distressed neighborhoods. I'm sure it will be a bracing and insightful talk. So with that, Michael, if you're ready, I'll pass things over to you now. I'm ready. You can see my slides. Yeah. Well, thanks so much for the kind introduction marine and thanks so much for having me. Hi, everyone, as Marie mentioned, I'm Michael Snydel and I'm a doctoral candidate at Columbia. And I was a master's student in this program. So this is a particular honor for me. I've seen some really good research presented at lips over the years, and by some really impressive people. And those lectures have definitely shaped the way I not only think about research but the way I thought about research on this project. And I know firsthand how helpful urban planning students with with your diversity of credentials and experiences can be an informing research and asking those sharp and critical questions. So this is truly exciting for me. So today I'm going to present on a project that I've been working on over the last year and a half. It's part of my dissertation. And it's part of a multi prong examination of the federal opportunity zones policy. And today I'm going to focus on just one face of that project that is now complete, which is a baseline qualitative evaluation of the policy in very distressed neighborhoods West Baltimore, but I'm going to try to touch on the other pieces and how they all fit together along the way. And so I'm just going to hop into it and marine I hope to let me know if something in the chatboxes is timely and we can go back to it. Okay, so, so for optimism sake let's say I'm halfway through this three prong research agenda, and those three prongs hopefully three papers are the following the first is an in depth qualitative evaluation of OZ policy in the very distressed neighborhoods West Baltimore. And again this is a piece of the pie which is basically complete. It was supported by a research seed grant through Johns Hopkins University. And I expect it will be published in cityscape, the journal this summer. And I should mention that I'm beyond grateful to Johns Hopkins 21st century cities initiative, as well as my grant partner Dr. Without them, this research definitely would not have been possible. Just quickly the other faces of the agenda include an early quantitative evaluation of OZ policy. This replicates some of the more compelling econometric assessments of OZ predecessor state and federal enterprise zones. I'll talk about those a little shortly. And specifically this paper looks at lending outcomes between OZ and non OZ tracks carefully establishing a counterfactual using a propensity score matching technique. The final piece I I refer to as a theoretical investigation of OZ. And this research really traces the etymology and the intellectual history of OZ. In order to explore what I think is a under theorized and misunderstood question, which is why tax preferences for economic development continue to be advanced without robust literature supporting their effectiveness. So first, I want to give you a quick overview of opportunity zones policy, and I should note that when I first presented this research. I and anyone kind of looking at OZ really described the policy as hidden or tucked into the 2017 tax cuts and jobs act. Opportunity zones have since then become front and center and really fully politicized in popular news coverage. And in Washington and I imagine that many if not all of you have at least had some sort of cursory read on OZ by now. In the media it's been the the regular target of left leaning news organizations as a prime example of corporate abuse and waste. Trump administration. So for example, Paul Krugman has labeled this policy as part of the great tax break heist. And if you watched the presidential debates last fall, you may have seen that Donald Trump actually made OZ the central talking point of what his administration was doing around racial inequality in America. In fact, you know, Ben Carson, the former Johns Hopkins based neurosurgeon who has just served as HUD secretary in the Trump administration is still kind of meandering around right wing news outlets, talking about the effectiveness of OZ. And based on what I'd say are some pretty fudgy numbers put out by the White House last fall by the Council of Economic Advisors, he claims it's inspired 75 billion in investment that it's produced 500,000 jobs, and then it's lifted a million people out of poverty. So I'm not going to break down how problematic those White House numbers probably are, but, but I think there's good reason that attention continues to be given to this policy. And I think there's good reason for the skepticism as well. First, the Biden administration seems poised to keep OZ policy, which while, you know, the Trump administration really seized as their own policy it was actually concocted under the Obama administration, and in Congress it remains highly popular bipartisan policy. And according to Congress's Joint Finance Committee, OZ is expected to cost the US government about $1.5 billion a year between now and 2026 in Fordon tax revenue. Now later in this talk I'm going to try to convince you that this is not actually that much money for neighborhood transformation. Unless if these estimates are correct, they mean that OZ will trump not only the Clinton era empowerment zones but also the great society programs that we as planners and policymakers are repeatedly told were so expensive and so vast. And the intention is of course justified because OZ at least ostensibly is meant to troubleshoot one of the biggest threats to the American economy and the American dream inequality. So, so here's a graph you're all probably quite familiar with at this point it's the Thomas Piketty's work that upends the Kuznetz curve theory, and specifically, OZ was stated to address the spatial manifestations of inequality across American neighborhoods. In other analysis you're probably all quite familiar with at this point given the press around Raj Chetty's work on income mobility. We know economic mobility varies greatly by where you grow up. We know that a child growing up in Baltimore City where this study takes place is predicted to make almost $4,500 less per year than if they grew up in an average jurisdiction. And we could all get together hop in a van and drive 40 minutes from Baltimore City and go to the wealthy suburb of DC Montgomery County, and that same child would be expected to make $3,000 more than the average jurisdiction. And indeed opportunity zones were pitched from both sides of the political aisle as an opportunity to bring capital and economic development to communities and areas of unequal development, particularly those that had not rebounded from the great recession. And the notion of the policy was really threefold it was that it was that uneven distribution of capital deployment explains neighborhood inequality. The deployment of this capital must be made by private actors. And that the only role for the federal government is to reduce barriers in this case capital gains taxes, so that this private capital and equity can flow to where it hasn't previously. And again, most importantly, whether you, you know, read congressional testimony, whether you examine expert support, the sales pitch for all of this was that the businesses and residents of distressed communities would be the beneficiaries. So, opportunity zones should therefore represent economically distressed areas. Now in reality, 57% of all census tracts in America qualified to be opportunity zones based on their poverty and income demographics. The final designations you can see here they represent the over 8700 census tracts that were nominated by every governor and a true and approved by the Treasury. And just to give you a few examples of designated opportunity zones, you can really see they run the gamut of location of neighborhood type and of level of distress. So they include the highly distressed Pennsylvania Avenue and West Baltimore where the Freddie Gray riots were centered and where this study takes place. They include the historically distressed but recently gentrifying Woodlawn Chicago, which is next to the University of Chicago in the future Obama Presidential Library. They include the arguably not distressed site in Long Island City that Amazon decided not to establish an HQ to act. They include rural sites like the old Moran coal plant in Burlington, Virginia, undeveloped retail waterfront of the once bankrupt and still recovering from the foreclosure crisis Stockton. And even the entire USC college campus is an OZ, which you know that area certainly has a high poverty rate but it also, as we know has a massive student base whose lack of income supports such a designation. And, and if you've followed OZ in Baltimore when I began this research one of the early criticisms of the policy was that while the city had actually picked highly distressed tracks for OZ designation. Because of a computer error the governor actually later added a mega development industrial site that was being developed for underarmors new headquarters on a waterfront piece of land known as poor Covington. And, you know, according to analysis by both the Brookings Institution and the Urban Institute, some states clearly selected gentrified areas where access to capital was already abundant. So if we think about it, this broad and disparate geographic targeting may direct capital towards gentrifying neighborhoods that didn't need subsidy, and it may direct capital away from those highly distressed neighborhoods that are likely to be being higher risk investments. But it's not just the broad zone selection that calls into question whether distressed communities will benefit. It's also the rules and regulations. So someone who lives in a distressed community can't just receive subsidy by putting their equity into a property or business that falls into one of these zones. Rather to reap the benefits, you need to have capital gains and then you need to place those capital gains into something called a qualified opportunity fund. That's that's really just a federally approved corporation or partnership that looks like a real estate investment trust that invests in opportunity zones. And apart from the exclusion of a few sin businesses, the activities that these QoFs can finance are really quite broad. They can finance commercial real estate, industrial development, infrastructure, affordable housing. But at the same time, they can also finance luxury residential and hotel development. So here are just two quick examples of larger nationwide opportunity funds on the left is Skybridge Capital Opportunity Fund. This one's actually the brainchild of one time White House Communications Director Anthony Scaramucci. This fund originally planned to raise about $3 billion for zones across the country. I think they're quite far from that mark. And on the right is the Fundrise Opportunity Fund, which some of you may know from the tech startup known for real estate crowdfunding, Fundrise, and the minimum capital gains investment to invest in Fundrise, for example, is $25,000. Now I just want to give you a quick rundown of the benefits. The program basically lets investors avoid the typical tax on capital gains by putting these gains into funds, which then invest in buildings and properties in opportunity zones. And every year the investment is held in the fund. Capital gains taxes can be deferred. And if investors keep their investments in those funds for five years or longer, investors actually get a 10% reduction on the capital gains taxes at year seven, this becomes 15%. And the real kicker of the policy is that if investments are held for 10 years, that is they act as patient capital, investors also pay no capital gains investments that are made from the OZ. So, you know, maybe for those of you familiar with 1031 exchanges. This looks a lot like a place based 1031 on steroids, right. And if we all were just going to sit back and think about this for all the few seconds we we've noticed the tax benefits are pretty limited right they're limited to investors with pre existing capital gains, or investors who expect to face future capital gains taxes in the next 10 years, seven now. So in other words, you know, very few Americans qualify for such a tax reduction opportunity. In fact, according to the Federal Reserve Board only 18% of American households actually report unrealized taxable capital gains, and the median capital gains among those who do is just $5,000. Overall, at fun rise the floor investment is $25,000. So, so, you know, and there was, there was just no indication that regulations would prevent investors from receiving subsidy for investing in projects that would have gone forward, regardless of OZ. The Federal Press coverage of early OZ projects created quite a stir. It included a spa for pets in northern Miami, a virgin hotel in the warehouse district of New Orleans. And in the case of Baltimore when I was first beginning this research, the, the first project was an already planned shopping center next to Johns Hopkins Bayview campus which is a good neighborhood amenity project but also a far cry kind of development in truly distressed neighborhoods of East or West Baltimore. And we really only knew this because of secondary and voluntary reporting and analysis. The full extent of investments and opportunity zones over the past three years and perhaps going forward may never be fully known. There is no federal requirement for detailed reporting. There is no public record that accurately sums up the capital expended and the program requires no accounting of which communities have received OZ capital or documentation of the types of projects being funded. So, so on this note, I'm going to pivot a bit with that kind of introduction to OZ, you know, OZ is obviously a new policy. And this is one of the first studies on its effects. And indeed outside of these few studies, and in light of this kind of failure to implement robust reporting standards. Most of what we have is kind of anecdotal evidence in New York Times reporting and elsewhere that discuss concerns around program design that I've just described to you. However, we have actually been studying the idea of OZ, I'd say since at least the mid 1980s. And that idea of you trace the intellectual origins of tax preferences for place based development. Actually ironically stems from a member of the Fabian Society, a later Labor Party member, and one of the most influential promoters and advocates of planning, Sir Peter Hall. In 1977 hall made a pretty frustrated and radical proposal for free ports. And the idea of free ports was that a small set of inner city neighborhoods would be self selected for an experiment in free enterprise where exchange controls, custom duties, and taxes be removed. There would be free movement of labor and capital into these zones. And I should note that that hall was also it pains to point out that he was never recommending free ports as a panacea to urban problems but was offering it as an extreme model of a possible solution. And it's this proposal for free ports that actually resulted in 24 enterprise zones in the United Kingdom under the factor government, the most famous, you probably know is the London Doclins. And by the early 1980s as many of you probably know as well the US states also began implementing enterprise zones that were offering tax incentives and employment credits for investment and job creation in targeted and distressed areas. And the federal government actually followed suit and established the federal empowerment zones program. Both are often referred to as easy. And this was a combination of tax credits but also direct grants, bonding authority, and other benefits eligible in a stress urban and rural communities. And it's these programs and the new markets tax credit program that flowed from them that are really the direct predecessors of OZ. And I'm not suggesting that these are the same programs. As each other or as opportunity zones indeed as I mentioned the enterprise the empowerment zones program at federal level had direct grants for social services, and also direct tax credits for hiring people who reside in the neighborhood. But I am suggesting that opportunity zones are the most recent spin on what has now been 40 years of using the market as the framework which place based policies are made understood and implemented. And so, so with that kind of truncated history in mind and in thinking about how to conduct an evaluation of opportunity zones it's important to note that we've had no shortage of studies on enterprise zones and empowerment zones, both in the US and other countries. In fact, you know if you trace the literature there have been over 50 peer reviewed studies on easy type programs in the US, moving myself there a little. And, and, and the methodologies to evaluate the efficacy and the efficiency of easy have really evolved repeatedly over time they start with descriptive studies turned towards survey based progressions. And more recently we had, we've had complex quasi experimental designs that carefully select control groups and use econometric techniques that mitigate for issues around selection bias and ask that question you know what would have happened without the oz here. And to briefly summarize these, these studies in two sentences. I'd say that although some econometric modeling does find at least temporary benefits from easy programs, the more sophisticated studies and those with more convincing counterfactuals can to actually find easy has had a nominal effect on employment or business growth. Given 30 years of studies, given the sophistication and development of these studies and the methods employed, and given the inconclusive and underwhelming findings. It's at least safe to conclude that easy has been ineffective as a catch all policy to arrest or reverse urban decline. But I'd say the more important finding when you go back through that literature is that studies on easy have relied almost exclusively on quantitative designs. And over time the primary and often soul agenda of these studies has been to properly establish that counterfactual. And there's no doubt that, you know, a focus on refining account econometric methods to meet this goal has been critically important. In fact, it ended, you know, early positive findings in support of easy and future studies on tax preferences for economic development just like this one, have carefully incorporated counterfactual into their design. However, this kind of dog minded focus on quantitative technique has really left examinations of how and why these programs are, or possibly are not working by the wayside. So in terms of the growth of analysis on how to improve the programs studies have become irrelevant to economic development practice and, and, and as we see with OZ, this continues to be embraced and expanded for economic development, even in the face of lackluster results. In other words, easy studies have failed to directly document program design and implementation, and they have failed to inform policy. And this is the real impetus for the qualitative evaluation of the program in Baltimore. Perhaps nothing better emphasizes these points than this quote from Jared Bernstein in the very white paper that actually launched the OZ policy movement. And disconnect brings me to just briefly mention the third part of this project and then I'll hop us back over to Baltimore in the qualitative study. So, well, there's a, you know, a robust literature evaluating the efficacy of easy, which again Jared Bernstein reminds us is rather inconclusive. Obviously little has actually been written on why tax preferences for place based development like easy and OZ continue to expand and grow without robust empirical support of their effectiveness. Indeed, many of the evaluation studies actually acknowledge that findings have been ignored by policymakers and politicians. And so the last part of this project really traces the writings on economic development on tax incentives on urban governance, which together advanced several overlapping and competing theories to help explain why programs like easy initially proliferated between and amongst localities in a devolved governance context. I argue that these existing theories are pretty inadequate and explaining why tax preferences for economic development continue to be proposed and implemented. And why with the introduction of a policy like OZ, they've actually now become the modus operandi for not just local but for federal place based policy. And I suggest more promising theoretical lens to understand the proposal, the design and the implementation of easy and OZ programs, as well as this transition from local easy to federal easy. Now finally to federal OZ is better found in the intersection of kind of neoliberal and ideational arguments. Well, again, I'll stop at that part of the project and I'll move us back to Baltimore and the qualitative evaluation. So, so this qualitative evaluation takes place in Baltimore City. And for those of you who don't know Baltimore, Baltimore is a majority black port city that sits just north of Washington DC on the heavily populated and rather prosperous I-95 or a cellar corridor. In 1950, Baltimore had just short of a million residents. It was the sixth largest city in the United States. But it has suffered from deep population loss. As of today, it is not even in the top 30 most populated cities in the country. And the city is also plagued by poverty by local corruption and by violence. In fact, among big US cities, only St. Louis had a higher per capita murder rate in 2019. Baltimore is also a hyper segregated city. Because of hundreds of years of racist policies and practices, Baltimore's neighborhoods experience really radical different realities. So due to this dynamic, white neighborhoods are actually now referred to after their shape and L of predominantly white neighborhoods which have structured advantages, while majority black neighborhoods are defined by their disadvantages and are frequently seen locally as the black butterfly. And in 2015, some of you may remember the city drew attention nationwide. When riots broke out after Freddie Gray, a 25 year old black man died a week after suffering a spinal injury while he was being transported in a police van without a seatbelt. His hands and ankles shackled. So he was unable to protect himself. And Gray's death triggered protests that were a precursor to the current nationwide protests over racial injustice and people of color being killed or injured by the police. But in 2015, the response from basically all levels of government, including the Obama administration was basically to look away and move on. In fact, two months after the uprising in Baltimore, the governor of Maryland actually canceled a $3 billion, a $3 billion transit infrastructure project, which would have actually and had which had a billion dollars from the feds I should say, which would have actually connected some of the very same neighborhoods of Baltimore where Freddie Gray was murdered and the riots erupted to job centers both in the city and the region. And yet I should just mention that at the same time, Baltimore does not perfectly fit the typical kind of American rust belt town narrative. Unlike many of those towns it sits in a region that is booming and in Maryland, which is one of the wealthiest states in the country. It is less than an hour drive to the nation's capital. Baltimore has long positioned itself and been described as kind of the definitional entrepreneurial city was well known for homesteading. It was known for the adaptive reuse of its inner harbor, which was inspiration for projects like the aforementioned London Docklands, but also, you know, New York South Street Seaport was modeled after it. And, and the portable to more remains home to one of the busiest cargo ports in the nation and the city itself is home to a world class university and medical system, including perhaps the most well known institution in the global fight against COVID 19. Johns Hopkins University. So in many ways it is kind of exactly the type of place that opportunity zones we were told should help. So, so this qualitative evaluation area is the, is the West Baltimore Opportunity Zones cluster, the WBOZC. I may just refer to it as a case study for my, for my tongue sake. And I selected the case study for several reasons. And as you can see the study area represents highly distressed neighborhoods that can serve as a black swan for analysis and I can explain a little more by what I mean at the end of the time for that. Second is I had detailed knowledge of economic and community development experts and projects in West Baltimore. I did a real estate and construction practice in Baltimore, which Marine mentioned. And I was working as the director for West Baltimore for the Baltimore Development Corporation before I came back to pursue this research. I would say that Baltimore's proximity, just generally to DC offered this unique advantage that I could identify and interview participants knowledgeable of both Baltimore and National OZ activity. And finally, unlike most jurisdictions, Baltimore and Maryland actually both established staff positions to work specifically as OZ program coordinators. So these people were, you know, obviously strong points of contact and informants for this study. Okay, so, so I conducted roughly 75 interviews with community and government officials, program managers, developers, businesses, and fund managers, among others, as you can see, these were open ended and semi structured interviews. And I use them to document and analyze how much new capital OZ had attracted to West Baltimore to document specific real estate and small business projects being supported by OZ. You know, to ask that question, who is benefiting from OZ, but also to ask what types of tools and incentives are necessary to attract capital and economic development to distressed neighborhoods. And the takeaway of the findings is really in the title of the lecture here. OZ is a missed opportunity. You know, I found that OZ is supporting some very positive development, including investments in transit oriented development, expansion for a minority on business workforce housing, even the attraction of high paying tech jobs. And OZ is also stimulating investment conversations and local government capacity. However, the policy is failing at oversight and engagement. And I find it is actually not changing development outcomes. OZ is a weak incentive for capital gains investors who generally want market rate returns. And it's a missed opportunity because it does not sufficiently support developers, investors, institutions, and businesses that are already active in these distressed neighborhoods. And what and what the participant interviews really revealed is a locality doing its best with a tax policy that frankly was poorly designed to stimulate development in distressed neighborhoods. Okay, so there's a lot of data, perhaps too much data on this slide, but I'm going to walk through each of most of these projects individually. So as of the end of 2020, no OZ deals had had closed within the case study area, the WBOCC. However, I did document six completed OZ investments in Baltimore City, and another three projects that were likely to receive funding soon. And two of those three were actually in the case study area. And again, these projects show how OZ investments are supporting some really important economic development work. So they include a $10 million investment in the transit landed and major redevelopment of Baltimore's Penn Station. This investment is being made by a group called Blueprint Local. Blueprint is a national mission driven fund that the study participants described as uniquely dedicated to community impact and engagement. They include a roughly $1 million investment, this made by the Verkay Opportunity Fund, a fund focused on impact venture capital. This investment was made into a operating business, Galen Robotics, which specializes in computational sensing and robotics. And this investment was actually part of Galen's permanent relocation into 5,000 square feet of an industrial office space in Southwest Baltimore. They also include another roughly $1 million investment again by Verkay. This was made into a company called Outlook Company, which is a full service animation studio. Interestingly, this was a studio that was founded by Trevor Price, who was a former football player for Baltimore Ravens, Baltimore's football team. And as part of this investment, the Outlook Company is actually expanding in a move to the Hohen lithograph building in East Baltimore. This development, I should mention, the new Hohen building is not an OZ project, but it is a recent $30 million redevelopment in a truly distressed neighborhood that was made by Bill Struver's Cross Street partners. And the forthcoming investments include a gap equity investment for affordable housing and retail space for local businesses in a truly distressed track in the study area. And I should note the recipient of this investment is a developer that describes their company as racial and economic justice driven, and that has the stated goal of undoing redlining. And forthcoming investments also include an estimated $10 million investment in a long planned $100 million mixed use redevelopment project on the edge of the WBOZC. And this project, I should note, is being redeveloped by one of the region's most well known and most sophisticated developers, MCB real estate, and this was a firm that actually has deep and personal ties to West Baltimore. Now, far and away the largest OZ investment current or forthcoming in Baltimore city. This represents 65% of all OZ capital flowing in Baltimore city according to my estimates is being invested by Goldman Sachs into the into the 5.5 billion future investors of under armor. And this is most likely substitute capital for an already planned roughly 1 million square foot mixed use mega development at court coming to. So, outside of this $154 million at court coming to these projects combined represent about 78 million of OZ equity that's supporting real estate and business development projects that are benefiting residents across Baltimore city at large. However, it's important to note that investments in deeply distressed neighborhoods represent less than 5% of total OZ equity deployed or expected to be deployed in Baltimore city. And, you know, if we think about this in terms of neighborhood redevelopment, and in terms of the Baltimore economy even. This is just not actually that much capital. For example, if we again take port coming to now to the mix. OZ investment to date is about half the amount spent constructing 414 light street that's just a single 44 story luxury tower. That's the newest addition to Baltimore skyline. And it's certainly a far cry from the cost of full neighborhood redevelopment investment, like which is going on at Baltimore's Harbor Point at this moment. And yet, you know, I actually found that Baltimore was performing reasonably well with the tax preference. You know, if we if we then think about OZ in terms of the country's development economy. Three years of this policy has basically produced one Hudson Yards development spread across the country. And again, Baltimore's relative success is thanks to this locally funded and dedicated government staff, as well as a few sophisticated developers committed to community development and a few mission driven financiers that are really kind of all bending over backwards to leverage attacks preference that just wasn't well designed to spur development in distressed neighborhoods. So I want to give you a little more of the West Baltimore story in detail. So the greatest benefit of the OZ policy is its ability to stimulate new investments, new investment conversations rather and put Baltimore on the map for a new set of investors. So I documented over 50 funds that I connected with Baltimore City and or individual businesses and projects, and as many as 80 projects were exploring OZ as a potential investment source related to this new ecosystem. I found that OZ was creating a new organizing structure in which the local government engages in development in Baltimore development capacity included the creation of a development perspective. This is a marketing document that the OZ coordinator pitch to developers pitches to developers and investors. And at the state level, this capacity included an interactive website portal where OZ actors and other investors can locate projects information and contacts about the state's OZ activity. However, while I found Baltimore City had made good faith efforts to track OZ development and connect community communities to OZ through these coordinator positions. I also found that the policy was failing at oversight and engagement. And you know, study participants explained that OZ is a sufficiently complicated economic development tool that in addition to basic tracking, the policy requires federal funding for education for engagement and probably for technical assistance. And while OZ is stimulating these new conversations and interest about investing in Baltimore. It's actually not materializing into new outcomes for the stressed neighborhoods. And I found several reasons that this was the case. The first is that most OZ investors demand market rate returns. So about 10 to 16% IRRs and projects in the stress neighborhoods like those in West Baltimore are likely to generate IRRs no higher than three to 6%. The second is that OZ is just a weak incentive that has not changed development outcomes on its own. A particular note here is that year and five, that year five and your seven step up basis advantages of the program really were not enticing investors and OZ is really considered and used as a gap equity source. And that stimulate entirely new development. And I actually found government subsidy programs and federal new markets tax credits were more important sources of capital to spur development. Third, OZ fails to incentivize investors and institutions already investing or interested in investing in West Baltimore, who do not have access to capital gains dollars. They include small businesses. They include developers. They certainly include community development financial institutions, which are mainly debt driven, and we're not eligible for equity based tax preference. But they also include kind of large institutional sources of capital like university pension funds. And they also say OZ suffers from design failures. These include poor selection criteria which basically force localities to select places like Cork Covington. They don't require incentive failure to create or embrace a planning or market making process that can express neighborhoods for future investment, timing issuance around capital deployment. And I'd say really an inattention to the relationship, the relationship between appraisals and other development criteria that are, you know, connected to the racist and segregationist practices that devalue these neighborhoods in the first place. Okay, so so all that said, OZ requires some serious restructuring if it's going to stimulate meaningful investment in distressed neighborhoods. And I propose seven changes to the program or policy. This includes instituting reporting requirements and removing continuous tracks and tracks that should not have qualified for OZ eligibility. The recommendations that have been made by other, you know, the other a few other serious studies of OZ have made these recommendations as well. And Congress really needs to stop delaying action in order to prevent possible waste fraud or abuse, and certainly to stop the perception of it. The next recommendations I make require deeper analysis. They definitely demand the convening of development policy and legal experts. They include federal grant support for education and engagement. I also recommend evening the step up basis incentives and aligning infrastructure investments, as well as providing a federal guarantee pool to stimulate development in deeply distressed OZ tracks. I also recommend that Congress incentivize CDFI bank lending capacity and add CDFI oversight to OZ. And, importantly, you know, I recommend expanding or even substituting the OZ capital gains tax preference to include a refundable tax credit for community based actors that invest non capital gains equity into deeply targeted distressed OZ centers tracks. And in this note, you know, I'll say throughout this study I repeatedly identified doctor and dentist dollars individual businesses and small developers that were emotionally connected to West Baltimore. And I also identified larger capital sources again like university pension funds that operate in and around distressed neighborhoods, but that often invest in primary or foreign capital markets. And now these actors were given tax preference. They are much more likely to invest patient capital in distressed neighborhoods than these holders of capital gains dollars. And this is what I mean by the missed opportunity of OZ. Now that said, I think it would be silly to suggest those recommendations or a refined OZ policy offers the broader framework necessary for an equitable or a durable urban policy regime. So I thought it would be helpful to conclude this talk on that elusive question of what such an equitable urban policy regime would look like. And I think we're in a different moment than 2015 when again basically all levels of government shrugged their shoulders to the uprising in Baltimore. And certainly the continued organizing around the pandemic around racial equality have been critical to this window. And even setting aside the hostility of the Trump administration to urbanization to poverty to non whiteness. This is also a break from the Obama era reliance on markets to solve intractable urban problems. You know, in just the last two weeks, we've seen guaranteed support of income for children. We've gotten a lot of press, but we've also less discussed is a commitment in the stimulus to CDF eyes and minority deposit institutions. Now it may be the case of these policies are temporary, but they may be openings after basically decades of congressional and administration and administration non movement on these issues. And we certainly have some good theories, ideas and policies of what would make our cities more equitable. They include the just city analytics on how local planners can consider equity diversity and inclusion and local planning decisions. And they include, you know, challenges to liberal expansionism and the call for local public balance sheets. But what we haven't been able to do is kind of pull these together into a comprehensive framework to build out a set of policies for the state. In fact, we really continue to retreat on this front. So basically the most robust set of federal policies are actually found in the concluding chapter of Patrick Sharpies work in which he proposes modeling federal policy a federal policy agenda through successful policies that confront joblessness and invest in children's environments. I'm going to end that work thinking about the history of place based policies and through the conversations with community development experts during this study. I'm just going to end on some bullet points for a durable or equitable urban policy regime. So first tax policies like OZ are typically part of larger processes and programs that are cutting that are cutting federal redistribution. In this case, the tax cuts and jobs act of 2017, which had the primary purpose of reducing the corporate tax rate from 35 to 21%. So like public housing and the mortgage interest deduction process before it. We really continue to implement these programs in the face of larger federal policy that works against urban living against press, you know, against urban living and prosperity and against equality. And, you know, it goes without saying that immigration policy labor policies, education policies that list goes on labor policies, you know policies that are not explicitly tied to place, but shape how urbanization occurs need to be better aligned with place based policy. And that said, we also know that that those, you know, non place based policies, even when they get the economy booming alone do not solve our deepest urban problems. You know, you know, even in the mid 1990s when the entire American economy was growing at impressive rates, we know the joblessness for black men did not reverse. And we know repeated widespread unemployment remains a serious threat to the revitalization of urban neighborhoods. And at the same time from HUD's jobs plus program to Milwaukee's new hope initiative, we also have evidence that if we saturate places with services and incentives to incentivize employment. There can be substantial benefits to residents in areas of high distress. And while we have less inclusive evidence, you know, theory and our understanding of development also tells us that investing in children before they are six is when those investments are likely to be most effective. Third I'd say equitable urban policy must continue to build on cross departmental collaboration of the Obama administration's neighborhood revitalization programs, like choice neighborhoods and the promise neighborhoods. These programs have shown good if certainly underfunded examples of how we can make place based initiatives, less siloed, more inclusive and more efficient. Fourth, and this is a point that came up repeatedly in my interviews, economic development policy needs to be better tied to the wealth building process for the non capital gains holding class. Place based policies need to be better integrated into large scale initiatives for lower income people and build wealth through homeownership and business creation. And then fifth I'd say is, you know, finally, if we're going to create an equitable urban policy regime that only is going to exist if we can change the arguments. The first being we need to finally kind of issue the notion that moving large numbers of families out of disadvantaged neighborhoods can or should be the solution to concentrated poverty. People should certainly have the freedom to move out of violent segregated poor neighborhoods, but they should, they should also have the freedom to move up in place in these neighborhoods. Otherwise, I suppose a little convenient of me, I think we need to elevate findings that tax preferences like OZ to date, have largely benefited that capital holding class, and intellectual community here needs to better put forward the facts on these policies and programs and push back against kind of the think tank cheerleaders and DC that continue to implement them. And we need to further convey that the free market approach to redeveloping poor places that we have now tried for 40 years has now failed. And we need to, and we need to also convey how impervious the logic is to begin with that private finance capital is the solution to what is a complete another crisis in private finance capital in these neighborhoods. We need to also qualify the conclusion that direct investments like the war on poverty and the federal easy grants suggests that government investment direct government investment is definition, definitionally ineffective. One more accurate description is that in the grand scheme of the American economy, and in the grand scheme of the amount of capital that it will take to rebuild swaps of neighborhoods that have been redlined that have been denied capital that have been denied, we have never seriously tried direct place based investment. And moreover, where, you know, where our suburban communities have fared well, that is thanks to enormous support from the federal government. And I think with this framework, and by changing these arguments, we can then put forward place based policies that are much more likely to succeed, and much more likely aligned with goals of equity and justice. And because on policies like oz remain popular at the local level. I think if more carefully constructed to benefit local residents to bring business creation wealth and wealth building to the people in places that have been deeply disinvested and to be more clearly aligned with equity and justice goals. You know zone based investments can and should be part of this regime regime. So, modeled after some of the more creative federal housing proposals we saw last year. Let me just propose that our next round of zones be spaces for reparations. And here is just this is just an illustration of how they might work and again the details we need to be taken up by legal policy and economic development experts. And this is a scenario in which HUD would administer an RFP for a pilot reparation zones program. And cities would then submit at least two applications for a historically redlined or segregated set of census tracks that are deeply distressed, but also near institutional partners and with institutional commitments. You know as critical job anchors for development. And cities would submit zones that are in need, and deeply distressed but they would also submit those that are comparable to set up a counterfactual comparison. Once HUD then selected awards for a subset of proposals, we could have a selected set of pilot cities established or maybe they build off an existing land bank to acquire abandoned or vacant property in historically redlined or segregated and then Treasury in partnership with HUD to provide direct funds for restoring them as well as providing business seed capital to locate or launch investments. And these funds could be forgivable as long as entrepreneurs and homesteaders committed to say 10 years in the neighborhood at which time they would be allowed to remove that patient capital and sell their investments at full market value. You know, you can imagine these funds also provide low interest loans for business expansion to incorporate community development financial institutions. But here would be the kicker. Well, all the businesses and investors could be offered federal risk guarantee pools and refundable tax credits to invest in these zones. Only residents and businesses with a history living or working in segregated and redlined communities would be eligible for land bank properties or forgivable grant fund. So in summary, again, if we follow an equitable urban policy framework, if we change the arguments, there's no reason that the next round of zone based development can't be aligned with goals of equity and justice, and can't be part of this equitable urban policy regime. And so I think that final illustration and I stress it's just an illustration. I will conclude this West Baltimore story. Thanks. Thank you so much, Michael for your insightful and rich presentation and thank you for sharing your work with us and giving us an overview that stretch from enterprise zones to opportunity zones and walking us through the benefits that OZ can present to areas of high as well as highlighting their design feature, their design the flaws. I would like to open up the floor for questions from anyone in the audience. As a reminder, you may, you have two options either you could raise, use the raise your hand feature and zoom and we will call on you to unmute and ask your question directly, or you may also type your question in the chat. And if to get, you know, to get us to get us rolling I can, I can ask my question first. I really appreciate that you engaged us with your methodology and the value of introducing qualitative research and open ended interviews and and research that had mostly relied on quantitative efforts in the past. So one question I had when you were presenting the findings of your interviews and research is, could you speak more to why opportunity zones in general do not sufficiently support local businesses institutions and developers that are already active in these distressed areas. Yeah, yeah. And I think that's one of the key challenges with the policy as it is. So the primary reason is that again as I said the holders of capital games represent just a pretty small segment of American society. A lot of it is Silicon Valley dollars. A lot of it. Yeah, a lot of it's coastal market dollars. And yet at the same time, there's there's no shortage of people I found in the Baltimore experience both at the regional and the local level. They have access to capital, and they have access to capital that could be that could invest in some of these neighborhoods whether that be debt, or whether that just be non capital gains equity. But what I found again and again was that those folks just didn't happen to have capital gains dollars. And again that's kind of why I ended up at the refundable tax credits that if we want to spur capital, a much more targeted and efficient way to do this would be to just target regular sources of equity that exists and want to make investments in some of these neighborhoods. Does that answer. Yeah. Definitely, thank you. We do have an answer. We do have a question in the chat from Joe's client Rosenthal. And it goes great presentation and proposal. My question is about locating information on the local NYC investment through opportunity zones. There is no federal requirements for detailed reporting and reporting as voluntary. How can we learn about the New York City use of opportunity zone tax breaks, such as Goldman Sachs recent investment in Brooklyn, it appears to be OZ driven. How do we find out about that. Yeah, it's a great question and a great problem. I think the answer is Congress needs to do something about this. I mean, I would call this the original sin of opportunity zones policy. If you look at the white paper that informed this policy. They write several times the data collection was failed on our last round of place based economic development centers. And that would be the process of a Republican administration using reconciliation to jam a tax bill through the American system. But that said, that was three years ago now, and there's plenty of space in the aftermath of that reconciliation bill that reporting standards could and should have been put in place. I really think, you know, you know, could localities establish that that opportunity zones investments have to be declared, possibly, possibly that's an option, but from a federal standpoint right it puts them at a disadvantage from with other localities. I've seen some states, including the state of Maryland has basically tried the, the carrots approach, where they've said we're going to add state level incentives in these same zones, but to get our state level incentives. We have a local reporting collection process. But obviously then you're just, you know, subsidizing some of these same developments even more but it is one option at the local level to try to capture more data. Joe, I think you had a question. I have a question about I really, I thought it was really interesting you were saying about why does this policy keep getting replicated besides the sort of mixed results and, and pointing to this sort of whole think tank ecosystem that supports tax based policy, but I was wondering if also in your interviews if you identified is there like any sort of real growth coalition or like coalition on the ground that also is supporting these policies like other developers and CDC's that you're talking to do they also continue to support like kind of tax based policy like this or is everyone on the ground sort of like this isn't great we there's an opportunity cause and we would prefer a direct investment but this is what we have so we just work with it. What was your sense of, of what that's actually I think the answer is yes, and that's why these policies remain politically this is one reason these policies remain politically popular is a popular local level to mayoral administrations tend to like them, governors tend to like them at the community level it gets a little more complicated, but the general sentiment that says the federal government has been so disengaged from a direct standpoint for 40 years now that localities will take whatever they can get. So they're open to it I mean Baltimore established a OZ coordinator and this policy very seriously and as I said you know they've tried to make it work the best they can spaces and I think they've gotten a little equity in some projects that are good stories. And that said, if you, if you go down a level. I think there was broad excitement at first from local community coalitions. And then when we saw that basically community development financial institutions which have, you know, long been the drivers of debt and that driven development in these neighborhoods and one of the few drivers and actually getting capital into the neighborhoods will basically boxed out of the program, because that was not incentivized and the equity was. The OZs at the same point who are mainly engaged in affordable housing this this this be fair this policy wasn't really intended for affordable housing. But it certainly wasn't well aligned with like that projects for a host of reasons. So kind of both the set of CDCs and CDF eyes, pretty quickly kind of earned on the value of the policy, you know, saying it's worth people here we've been doing the work. And if you have other forms of capital in neighborhoods that are here, it'd be nice to pose the incentive. I have one more question on the reporting of.  Good question. So yeah, I think there is. So let me answer this first by saying, you know, I don't know if I think I documented all the activity in Baltimore City. That said, I know for a fact I missed hundreds of not thousands of OZ conversations that didn't develop into projects right with other missed opportunities perhaps that for some reason the investments didn't take place and there's no way to document them. I think you're right, it would probably be hard to hide some of the really large investments being made because these are large transactions.  But it's doing something that may not be community desirable and has the no reason to publicly report this and no requirement to do so. So, you know, again, even if that kind of corruption, fraud, waste, whatever we want to call it isn't taking place. And I think probably is taking place in some small spaces. But even if it's not, you know, these are a lot of these communities have been disinvested in them. They've been vulnerable to poorly designed federal policies in the past, and the idea that they're on these protections in place. Anything else. We have any more questions from our participants. Okay, so I think we can. Would you like to add anything, Michael? No, thanks so much for having me. This is a lot of fun and working through this research. I hope it was presentable and I hope folks got something out of it. I know I got a lot thinking about how to put it together. Definitely very rich and beyond presentable and we thank you so much for, you know, taking the time to join us here and on behalf of everybody at GSAP we're so happy to see one of our own so close to finishing and sharing their work. Yeah, so thank you again Michael for for joining us here and for all our other participants, please be sure to join us again next Tuesday for our next lecture at 115 with Francesca. Thank you and have a wonderful day.


After what feels like years of waiting, Tekken 8 is finally here, only one more day's wait until… wait, they're giving me the game early? They're sponsoring me to do it, I would've done it anyway. Yeah, okay, alright, I just gotta change up my intro a little bit. Tekken 8 aims to be the most accessible and fun fighting game of all time. And to accomplish that, they are taking everything you loved about the previous Tekken experience and just adding more onto it. I mean even just looking at the game modes, you have an entirely new story mode that I will not be spoiling in this video, the arcade quest which allows you to create your own custom avatar and take them through a Tekken arcade-like experience. And then when you look over at the more multiplayer-centric modes, you have some stuff that I'm really interested in trying out, like the Super Ghost Battle mode, which will analyze how you fight and allow you to send a ghost version of yourself to friends, or you can take on ghost versions of your friends and try to beat them. Then of course you have the Tekken Fight Lounge which acts as a lobby for you and your friends to meet up with and play, and then they even brought back Tekken Ball. Yes, Tekken Ball from Tekken 3, I think they did this just for me. Has anybody else even played Tekken Ball? And then of course you've got replays and tips that allow you to take your gameplay to the next level. But if you're not interested in getting too in-depth to Tekken, they also have a new special style control that allow you to get into the game really quickly and just have fun with friends. Which is exactly what I'm going to be doing in this video as they also gave Deanna a copy, so I decided why not just have two idiots sit down and play some Tekken 8 and see what happens. Bro, I bet you won't be random. Deanna, are you challenging me to a random character off right now? Bro, just like when it comes to fighting games, I'm just a little better, bro. That's crazy. That's crazy knowing that you're using the- Oh, they gave me one of the best characters from Tekken 7, by the way. You don't need to tell them. Ooh, look at all these stages. PS5, the graphics are just looking extra good. Bro, this is my first day out here. Did you know that Dotto actually competed in a few Tekken tournaments, so please judge his skills based off of what you're turning into? That is not true. Anyway, I was looking for a map with a floor break, or at least a stage transition. Lee Roy versus Panda, only in Tekken, baby. Hey. Oh, look at this view of that. That's my boy, that's my dog. I was telling you about them graphics. Why that dog more realistic than my dog in real life? That's just the graphics that work. You are tall, man. No way. Oh, hold on. Let me get those. I don't use the basic controls, bro. I don't got a hop kick. I'm screwed. Oh, let me hit you with the- I don't know much about Tekken, but I do know. Wall rising. Hold on. Stance. Wall rising. See, I know Lee Roy was good in Tekken 7, but the thing is I don't ever try to grab me again.  Lee Roy's POV, man.  I was going to say he's a braver man than me. I would have been ran away. I'm blocking. Unless I hit slow. Low? Got to watch your legs. Watch. Was that not your ultimate? You're doing a lot of talking, bro.  Yes, that is the disclaimer I'm saying. Give it up. Oh, I spun him over my shoulder. Lee Roy. Hey, bro, but you don't even got a cute backpack like me so likely, whatever. You get that from Sephora, man? Or like- This is Louis B. Stand still, bro. I got him. Look at stay. He was in the court and just- Oh, I was, bro. Damn. All right. Well, you got me back. I don't know anything about my stances, but I look cool doing it, don't I? But I look cool doing it, don't I? Come here. You're not allowed to play when I'm playing, bro. Oh, yeah. You're just- Oh, yeah. What if I turn on simple controls real quick for the one time? Oh, get his leg. Llama, move out of the way. I can't- Oh, back my strength. Wait, dude, would you call him? Would you call him? Is that not a Llama? Is that not- Oh, what do you call it? Llama. Llama.  I was like, wait, you really feeling that- I know I didn't just see that. Hold on. Did I just see a UFO in the background? Am I making that up? Am I tripping? I swear I saw it. Not the sound of the court. What the heck are you- Oh, not the sound of the court. Not the sound of the court. I swear I saw you, bro. What was that? I got him up against the wall. The pressure is on. Bro got me up against the wall. Bro got me directly in the corner. But can you stop me though? Now you're against the corner, bro. I don't know, massage. Why are you down there? You can gently poke me, bro. Ah, come here. We're in my hood. We're in my hood. Let me get a bite of that. Somebody stop me, bro. This isn't even a- Give me that grab. Oh my God. Massage, massage, massage. I know we're doing first to do it everything, but at least making it a dating Diyan. Yeah, if they want entertainment, watch my video on Tekken 8 also sponsored. Ain't no way my dog got a hoodie on, bro. That is crazy. He has dripped out of his mind. Bro, I gotta give it up. The dreads are kind of nice, bro. Thanks. Ruin myself. Thanks. Thanks. Oh, look at that. Is that draining it? This is what I'm gonna do to you. Deep renews? Yuck. Yuck. Yuck. Yuck. Okay. Okay. Five. Okay. I feel like you and Panda would be friends in real life. You can take that however you want to take that, but- Yeah, I don't know how I'm gonna take that, but thanks, man. I think you two would get along. Charging two. God. See, the thing is get him llama. Get him llama. Actually, yeah, get a body here a lot. I can wait. So can I. I'm done waiting. You got me bored. Wait, turn off my- Get off of me, man. Am I blocking? I'm not blocking. Oh. Oh. I know what you want to do. Oh, yeah? Ketchup. You don't know what I want to do. I do know what you want to do. You mess up. Stay down. Which is why you ain't ready for this. I wasn't ready. I should have low parried that, man. I know what you want to do, but I know you also know that. I know that you what you want to do. So I decided to go for the option that you weren't expecting. Can I not take a throw? Also, I'm- Also, I'm constantly looking in the background because I swear I saw a UFO. I might be cr- Damn! How long you been practicing, bro? How long they gave you the game? Bro, is that taking me for all of his life? Natural habitat, Florida, man. Oh, that was sick. I swear, I just saw a UFO, dude. I did. I do swear, though. Anyway, bro. All right, all right. I have a strategy. That was first 3-0. I'm crazy! I kind of get down with it. Watch it. Watch it, bro. Wait, wait. Oh, no, no, no, no, no, no, no, no, no, no, no, no, no, no. Because I'm trying to do a strategy, bro. Let me do it.  You ain't going to let me down. Not you good?  Tag down for once in my life. Is it because I just- Oh, don't add it to my favorites. Oh, bro. It's only 1-1, man. Oh, no, no, no, no, no, no, no, no, no. Let me get jiggy with it. I'm still on the whole- But I saw an unidentified flying object in the background this time. Ha ha ha ha! You going to carry that through the whole video, aren't you? Hey, look at that good boy. No, look at his cuffs. Did you see his embroidered cuffs? I said it was a- Wait, what? My dog, bro. Get this weak. Oh, I'm a zero, Dan. Okay. Are you pretty good at the game, huh? You know you- That doesn't feel to lose to somebody with a Tekken prowess of zero. How does it feel getting massaged?  Damn, why'd I keep losing? Hop! Oh, duck that! Punish? No, I ain't punishing that.  Out of the way, Lama! Out of the way! You're glowing! You're glowing red, bro. I am, bro. That's the thing about me is you never know what I'll do to t- Living! Yes! Nah. Oh. Oh, but I'm still alive. See the UFO, Dion? You're seeing things. No! I literally s- I can't believe this part of the video, bro. They literally put one in the background. I knew it! Bro, please, bro. Nah, you're seeing things. Unless it's actually by Florida Blood running through my veins. Unless I see some bad video footage of that, it's not real, bro. Everyone knows every UFO has bad, poorly recorded footage of it. There it is! There it is! Nah, you're seeing things. I know you lot. Nah, I gotta beat you up for that. Do your super. Wow, shocker. The shocking t- Shocking technique, bro. Now go ahead, try to grab me.  Try to grab me. Yup. Shocking. Yup. Shocking stuff. Real shocking. I was simply trying to react to one thing you did with it. There was my dog! There was my dog! Crouch. Damn, I slurred him. Oh, you're going over the edge. How does it feel? How does it feel? You're going over the edge of the valve. You're going over the edge. Oh, wait, let me get- Wait, I'm sorry. That's really not going to happen. I just- I need to- I don't want to go over the edge myself. It's looking pretty bad now. Damn! I'm starting to kick in. You're not talking.  You're going over the edge. No. Anyway. Hit you with the Minecraft Steve. Hit you with- I gave you a migraine, bro. I gave me a migraine. I can't even lie. I'll take the damage. Oh. Like, I haven't seen a panda be aggressive. Like, if a panda was actually aggressive, like, it'd be pretty branding or what. I don't think they have the energy to be aggressive. Like, in real life, like, I know they don't have the extra calories to expend on energy. Oh, I thought you were referring to fake life. Don't get this reverse sweep, bro. I don't need to remind me about no reverse sweep. Oh, you clicked that button. Nah, nah, nah, nah. Are you good? I did not block the full thing. Anyway. I blocked half of it. Anyway, a little reverse sweep on them. I only gave you those magics. I really do want to see you go over the edge, bro. I should not have clicked so many buttons. Give me that.  Oh, stop grabbing, bro. Stop, bro. I know you didn't just ARF it. Oh. Oh, what's that foot do? Go over the edge. Go over the edge and never play this game again. Except for with me. I don't even know what that is.  I may have been mashing. We are so far from the place I want to be. I just want to do my heap first. No. No. I blocked. It's just because I had to do it. Don't kill. If this doesn't kill, you are so dead. Anyway, I'm about to beat this guy to death, mom.  You were tough. Oh, my gosh, bro. Let me get my main, bro. Let me get my main. I'm done. I feel like you could have voiced that character.  Dude, you had me on random. I'm not playing my main. Oh, we need two more matches. I'm playing Leo and then I got one more for you. Who are you playing? My main. I'm playing Leo. Well, let me go to... Well, welcome to the team, buddy. You're my main now. Oh, man, the stages all look so good in this game. Our rivalry between these characters is fresh. But it started over on my channel. You could check that out as well. Oh, wait, hold on. Never mind. I thought you were wrong. Oh, no, that's Paul, bro. That's Paul. Hey, hold on. I was trying to... I know. I know. It was something new for us. Leo was my main in Tekken 7. I knew some stuff, but, you know, even then... Even then, it's been a long time. I'm putting in some make-believe stuff. Bro, look at me in the water. Hold on, bro. Hold on. I'm over here. I'll come to you. I can't block that low Yoshi Mitsu. You're crazy. Okay, okay, okay. Haste. I'm getting haste. Hold on. If they got this little training wheel for you... Give me that. I swear we both grabbed. That's just me, though. Wall rising? Wall rising? Give me a puttice off that, man. I know I'm bad at the game, but I just want one. Oh, that was supposed to be... Oh, what the... I don't even know what you did. I kicked you. All right. I need to start getting this stomp option in, bro. I remember it was good in... Stomp? I'll do it. I'll do it. No! Stop! You ain't going to get the chance to do it. I told you, my Tekken prowess is 100. I literally have the most Tekken prowess you will ever see on the... I can't block that low. Every time, man. Yeah? Every time I try to block that low, and I... Don't ever in your life. So I need to know, you going to block low? You going to block low? Oh, look at you. You block low once. Can you do it twice? That is not as hard to block as you think. What that might be? Oh, no! Dude, I'm looking for anything I can duck from Yoshi Mitsu, so I can... Get this punish! Oh, damn. Don't ever run up to me like that. So you got some armor out there for what, though? Oh, so you noticed. Dude! So you noticed! Low? Oh, my God. But you got to watch out for the low. Every time I take that stance, because I'm going to go low, by the way. So you should always block low, right? Rock! What? So you still didn't block?  I'm not doing any of this rage art nonsense. Oh, no. It's crazy! Yeah, I want to cut your life into pieces! This is crazy! Yeah!  That kills? Pandas didn't kill? You are dry. But you know what?  At least this shows how inviting Tekken 8 is with this whole system. No, no, no. I got something to tell you. Yeah, go ahead. Even a zero-tekken prowess can defeat a 100-tekken prowess if he trains hard enough. Yeah, man. If you put on that little gameplay mode, man. Yeah. I know your play doesn't... I don't even turn it off. I don't even know the button for it. Block it high! Thank God! Okay. Okay. I'm going to play it pretty slow. Are you? All right. Come here. Oh, I can't take that. Oh, I can't take that. I'm getting panicked, bro. I'm getting panicked. Low, by the way. Oh, I'm getting the reeds now. Uh-oh.  I'm in his head. You might be. You might be low. Low. Oh, you don't know. You don't ever want to block that. Come here.  Go to sleep, bro. Go to sleep, bro. Ah, the damage on Yoshi, man. You must have like damage turned on, man. Hey, no God. If only there was more time. If only I could have learned the system mechanics, bro. How to do the heat. Oh, this sweep. I made that one up on the fly. Oh, wait. You can mix it up. Of course, bro. That's why I was trying to set you up with learning the low for so long. You were trying that for a long time. I know, bro. But you just, there it goes. And now you're blocking the low. I wonder what the follow-up is going to be. Oh, I need that. Uh-huh. Uh-huh. Uh-huh. Uh-huh. No problem. Okay, you got me. You got me. You got me. Oh, I'm good enough. What's that? Three wins in my corner right under my buttons. Okay. Okay. Let's go. I did that. I armored. Stop. You're making this up for you and never do it. Nah, this was all lab. Come here. See, that's the difference between you and me, bro. You didn't spend that time in the lab like me. Make it stuff up. Come here. Yeah, I found my armor button too now. Did you? I found a tune. Come here. Where are you going? Don't run from this.  Are you super now? I know you will. I know you will. I'm just going for 10 frame punishes from now on. Holy, we have to stop this. 10 frame punish, baby. Okay, take your one. There's a couple of jabs to the face. Take your one. My one. That's the start of my three. This is the start of my three. Ouch. Okay. Let's go. You're kind of grabbing through that. You're doing a little too much. Come on now. No. Why does that hit me? Give me that. It ain't me. It must have been your imagination. Come here. No. That's going to kill me. You've been making stuff up. Good night, buddy. You've been making the most stuff up, bro. I might look like Yoshi Mitsu. Except I can't say that because my character only looks like my character. Yeah. See, Deon, it's a sponsored video. I ain't going to let you say the other IP stuff. Okay. Yeah, I didn't say nothing. I don't know what you're talking about. All right. Honestly, Deon, you've been using this scrub mode, bro. So I'm going to turn it on and I'm going to see how the scrub mode fits a king. Hey, welcome to heaven. And by scrub mode, I mean innovative way to allow new players access to the game bars. That's right, baby. I'm using the new innovative control scheme on King. I'd rather not fight you if possible. Look at that. I'm turning it on. But I have no other option. Oh. The keeper seems pretty good, bro. Is this what you new players use? Let me try that out. Oh, yeah. Oh, it's pretty good. Oh, yeah. It is all right. I don't even know what I'm doing. Oh, yeah. It feels good. Yeah. I can feel my tech and prowess coursing through my veins. Oh, the knee. Let me turn simple controls off so I look like I did something for real. Nope. Wrong. You know what? Maybe I do got to leave them off. God, look at King, bro. PS5 HD graphics. He has HD as... Okay. Oh, that would have been sick. Was it just always your turn or what? Oh, yeah. I'm King. Oh, I can't block that low. Ironically, that has nothing to do with control scheme. Do you think you can just block King forever, though? Grab him out of the sky, King. Oh, he's the coolest character in any fighting game ever. He's just King. My goodness. I got a cape on. I got the... I got the pants. Oh. Whoa. You almost had me there, though. That grab was looking good. That grab was looking good. Oh, like that one. In the air. Oh, don't let me get you in the air, though, because you know where you're landing. You know where you're landing. You know where you're landing. Give me that. Give me that. Oh, don't slip off. Don't slip off, because when I get into it... Oh, I tech that. That felt really good.  Oh, car wheel. Oh, body spot. I'm coming in hot, bro. They got me on camera. All right, bro. Congrats. That was your first time ever beating my Yoshi Mitsu, bro. Now I'm mad. Thanks, bro. He should be, honestly.  Can't you tell I'm particularly pissed off now? I can see the expression change. Do I use the special styles of controls or do I trust my innate king knowledge to find my way out of this? Why don't you come over here? Ooh. Oh, yeah. Struck a nerve, huh?   Hey, where's my... Yeah, hold on. Hold on. Who's falling off that? Because it ain't gonna be me. It ain't gonna be me. Hey, but look, now we spawn down here. Now we spawn down... Oh, do we? Wait, I don't know. I think we do. Yes, we did. Oh, big mistake. Big mistake, bro. Let me get those controls off. Give me that! Don't let me break the ground on you. Is that something I can do? I didn't check the stage preview. Don't let me do it, bro. Up against the wall, buddy. Oh, get reversed! That was kind of crazy. Damn. Damn. You gonna learn to block one of these things? I ain't never gonna block. That's not my... That's not my way.  What? Okay, that combo's okay. I was gonna say, I'm blocked. Damn. Why are you turning it off? Okay. Are you looking at it? Oh, oh. Oh, my God. Damn. He's going crazy. He's going up. Don't you ever train me. I got a trophy for that. I struck a nerve, huh? I'll add this to the collection. Hit him with something else. Break this. Get off me. One plus two. I know. It's just one too many for you. Give me that. You're like, I don't know the OTG grab.  So you had combos. Yeah, you had combos all along. I didn't tell anyone. Let me find out I'm gonna have a king in the full release of this game, bro. Let me find out I'm one day... Dangerous guy! Hold on. I thought I set up Oki, man. Oh, the danger. No. Take him. No. On rising. Oh, wow. That's too much damage. Take that. What? Hey, that's one one, isn't it? Yeah, yeah, yeah. Something like that. Something like that.  I wish I knew some combos, man. We have a very limited window to be playing against each other right now. Otherwise, I would go... I would go back to the lab, bro. I'd go back to lab. I would come back without vengeance. But this is this is the end all be all. Hey, yeah.  Good because it's going to be me. It's going to be me, bro. Oh, over the floor. Oh, my. Run and grab. Okay. Break. Oh, no way. Give me that. What? You just be making stuff up on a cage. Just be making stuff up. What's though? Do it. You should have done it. Do it. I don't got anything. I don't got anything. I don't got anything to prove against you, bro. Do it now. No. Get up. No, no. Yes. Yes. No. No, no, no.  I didn't even win. Fine. I'm saying it right now. If the server shut down that. That's just the time. I'm right here right now. No, I got the lead right now, partner. This is bad. I have to... Are you good? Yeah, I'm good. This is bad. I just... Oh, let's go. Good jump. Don't run into me. You know better. I will.  That was kind of crazy. No, not like this. Not like this. Oh, got him. Oh, no. Turn around. I'm blocking. That was just your heat gauge. Did you just hit that poor little lava? Why I ought to... No way. It's going to let you combo? No. Get back from the back. You know what? I knew you would run. I knew you would be afraid, man. I don't get to save this. I don't get to save it. I knew you would be afraid, bro. I don't get to save it, bro. That was my only chance. Got him. Got him? No. Got him. Come here. No, take that. Got him. High kick. Hit him in the corner. Low. High kick. Off the wall. Point at him. Let him know. I just have to. You just have to get embarrassed. Low kick. Oh, come on. He's nuts. I don't even know what I'm doing. Oh. Oh, now we're attacking players, huh? Oh, my gosh. Oh, nice armor. I'll give it up. We both grabbed them. I'm king. Oh, no. Let me hit my... Let me do my heat burst. Well, let me do my rage arc. Oh, no. No. I need this. I need this. I need this. How much damage does this do? Very honest amount. You're going low. No, I'm blocking that. Please don't block. Please don't block. I'm blocking that. Come here. No, take that. Take that. So it all comes down to this. You're recovering, partner. You're recovering. So it all comes down to this, huh? I had to be me.  I just got to be me for this one. I just got to be me. I just got to be me. I just... That was the only thing. I was missing. I had to be me the whole time. Take that. I will literally punch your lights out, bro. No, I took that. Please don't kill me. I'm literally going to fly out of here. The lies on this app are crazy. Dion, welcome back to my video, bro. What the f***? I know you don't consent, bro, but I queue up for a ranked match. The servers are on for a few more seconds. Bro, welcome back. For those that don't know, I actually ended up recording. You may even hear me. I'm not even recording, bro. I got you on my OBS, bro. This is my promo match. I got to win, Dion. Here, I'll stream it to you. Actually, I ain't streaming it to you, bro. Just assume that I'm telling you the truth. He said I don't know how. I don't know how, bro. I didn't have time. This guy's already a brawler ranked, bro. And I don't... I got my day one lay-o out here. I need to know, is this a game journalist or a Tekken pro? Oh, my God. My hop kick strategy is not going to work. Oh, back kick to the back of the head. I'm doing it, Dion. I'm doing it. No, I'm not. Treat yourself, bro. You got this. I've never played against Victor. This is one of the new characters, I assume. You're not fighting against me, bro, so you're good.  I would have punished that. That would have been... I would have been crazy. No, get the simple control. Oh, God. Oh, God. Here, let me stream it to you, Dion. Let me stream it to you. Did you already lose? No, I didn't. I lost round one. That ain't nothing. That ain't nothing. No, he's trash, bro. Oh, he's kind of killing me. Bro, his Tekken prowess is $36,000. He's got a Tekken prowess of $36,000. There's no way that could be right. Give me that. Let's say please just hit him at least once, bro. Bro, he's not a 22 win streak. Oh, no. He's a Tekken player. He's not a game journalist. Dion, I knew this was going to happen to me. Bro, I just cannot see any of these visual indications. I didn't, bro, because I'm wondering if it's a Tekken prowess or the wins. Bro, just ran into the fight without checking the power level. I got my eyes on the prize, but you know why they sent me after him, right, Dion? Because the game journalist couldn't beat him. It had to be me. It had to be me. Beat him one time, bro. It had to be me, Dion. It had to be me, Dion. No, I didn't have time. I didn't have time. He shot me. Relax. Relax. Oh, my, look at my jacket. Blowing a win. No, that actually looks sick, though. Do you see that? I've come to stop you. That does look amazing. I've come to stop. Whoa. Bro, Victor, who do you work for, man? Is this guy like seeing? Hold on. I know what we got to do. I know what we got to do. We're going to have to take care of watching each other in range, bro. Because I'm about to queue up right after your fight's done. Oh, he's going crazy on me.  No.  No, let it be a best out of three, though. This is still my promo chance. Oh, man. Who's paying for my dry clean? Let me get this best of three. Oh, it's it is. It is. I'm not over yet. Go ahead. Cook, bro. Let me cook, bro. Just relax. You really want to beat him and he really could just go for the extra points. This is his last game of Tekken 8.2 for a while, so I know he wants to make it a good one. Bro, he's mad. Give me that graph. Go for it. Go ahead, Dotto. There's a whole tornado back there, so you guys got to be aware of that tornado. That tornado is the visual like representation of Tekken 8. Just the server's closing soon for us in the beta. Look at him move. I can tell he's a Tekken player, bro. I'll play in a little Tekken.  He don't know. He don't know how to play. Look, I blocked that low like my first day on the goddamn job. He might do it. He might do it. Just be careful. He might do it. I know I would, but he might. Come on. I'm breaking that 27 win streak, bro. Oh, he got a low. He got a low. He got a low on me. He got a low on me. Oh, he got some combos, too. I think he's mad, bro. Oh, my goodness. He's a little bit different now. Oh, and it's like a movie, bro. I know. I know that the others is just a movie thanks to the HD graphics on PS5. Heck that. That's only round one for him. Oh, my God. That was a date around for me. That's a date around. He might have figured you out. I think that person might have been a date around for him, bro. You know, I'm rooting for you, bro. Let's go. Let's go. Oh, hold on. He was kind of cooking. Just don't let him get that momentum. Oh, no.  Told you 23 win streak. You don't want to match up with me, bro. I ain't from IGN. I've been to the Tekken 7 streets. I know what it's like out here. Please play very safe, though. Wait, yeah, bro. He's looking at that win streak. Look at the respect of two competitors. Give me that grab. Oh, you got a tag. You got a tag. Oh, he backed us now. He got to play a little defensive. He knows that I might. Oh, no. Don't be acknowledged in the background. Every night in my dreams, he gets a combo off that. I love right to inform me. He knew I was going to repeat for that. God, oh, this is it. Just tap in. You just need one. It's fine. Oh, that's where they don't come in quick. Oh, no. Oh, no, he got you up against the wall. Oh, hold on. Don't tap in. I can tap in then. I had to. I was implied. I'm going to stop you. You're finished. That's going for your win streak, too. Let's go. Wait, hold on. Oh, here we go. Here you go. He's nervous. He's nervous. Oh, you dropped it. You dropped it. Okay, go into your right bed. It's not fair. I'll see you. I'll see you in the game drops. Hey, Spooky, I'll see you in the game drops.  It's crazy.  So we were just hunting that guy again, huh? This is weird. We was hunting the same guy, but then where did that lead us back? This is how you both of our video. This is weird. This is going to be on both videos, bro. Look at this. This is wow. This feels like cinematic. This is where the universe is collide. Wait, where else collide? Oh, but the thing is the unknown. I practice, bro. Get away from me. I need you up against the wall, buddy. I need you up against the wall. Up against the wall, pal. See, I ain't getting perfected though. Come on now. That's just what's not going to happen. That's just what's not going to happen. Give me that. No. Oh, no. Oh, you got me. You got me. You got me. You got me. You got me. You got me. You got me. You got me. You got me. You got me. You got me. You got me. The servers are shutting down. No. No. No. No servers.  I need to be. I need at least one win. Look at it. Get that low. Give me that. Oh my God. I'm going to take it. I'll play a second.  What did you pay us for? You're sponsoring this video, aren't you? Let us play your game. Let's play your game. We have a Tekken prowess of 4,902 now. And you're only a 4,108 Tekken prowess. Wait, wait. What did the baby controls get on? When you turned them off? Oh my God. Can I play the game? I'm sorry, Neon, but I can't let you play the game. You're too dangerous to be kept alive. I was mashing. Oh my God. You can't stop this, Deon. I need to go on and defeat Spooky. He has a power level of 36,000. I can't defeat him as I am now.  I'm blocking. If I take your prowess... If I could just take what you...  Oh no. That's one, Deon. That's one. All right, all right.  I'm the first Dan. Oh, I can see you on my front face today. Bro, it's called a first Don, bro. But anyway, run it back, bro. Bro, I'm Dan. I'm the first Dan. Oh my God. Oh, find my inner peace. God, the game looks so good. Can we agree on that? I can. I can. This is a promo match for you, huh? Oh my gosh. How are we... Back in the quarterback. You tagged? Oh, you saw that backflip. Oh. You cheesed me, Deon. I can't take a throw. I know you want to. I know you want to. I know you want to. Let me get on the board real quick. I can't take a throw. You ain't getting on the board.  Play patient. Get a couple easy punishes in. Block the low. See, the thing is, I know you learned from your defeat, bro. I know you. I saw you in the lab getting the faster lows. You still got hit by it. You still got hit by it again.  Oh, you want that reverse 3-0, huh? You want that reverse 3-0. Is that what you want? You took a lot of damage though. That was the trade. No.  You didn't go low. Okay. Okay. Oh, no, no, no, no. No, bro. Maybe a better man wouldn't, but I will. You don't know how to punch it. No, bro. Give me that. It's not over yet. It's not over yet. We only got one frame of delay, one rollback frame, bro. This is perfect connection. The servers are staying online. Two years of Tekken 8. Leave the servers online, bro. Give me that. No. What? What? All right.  You're good. You're good.   You know what? I wanted to see you up here in the first dawn, bro.  You're giving me my white belt. Let's go. Welcome back. Welcome back. See, the thing is, I'm not boosting you anywhere, bro. We're trading. The winner gets to fight Spooky again, bro. I'm not training you anymore, Dion. Oh, yeah. That's it, bro. This is like... It's not your little good DS. This is becoming an hour-long Tekken 8 video, bro. And I like it that way, okay? But it ends now. I blocked low at the last second. I'm actually so sad.  Right back at you. All right, cute. Oh, very, very cute. No. Got him. Got him. My boy in health. Oh, my God. You're childish. Don't run up to me. I'll do it again. No, no, no, no, no, no, no, no, no. Yeah, you better move, bro. You better move. This game. Oh, give me that. Never talk to me again. Okay. Okay.  All right. No armor. Why does it feel like Oh, you're right. Yeah.  Don't you ever talk to me. Now I'm tapped in. Now I'm tapped in. Dotto. Me too. I was just trying to get in my own head, you know, just like. I feel it. You know. Hey, here's the thing though. Never talk to me. Back at you. Change. Hey, you don't either. You choose to come here.  No, no, no, no, no. I'm going to. That's start. Cheating as. Not server that you're crazy. Yeah. You are crazy for saying that. That's true. Yeah, I'm one step closer to second done and you can't make fun of my tech and prowess anymore. Oh my God. I'm pissed. Only one of us is ready for spooky and I'm sorry. Donowitz, I'm pissed. I'm pissed. Anyway, I hope you enjoyed Tech and a thank you for Thank you for sponsoring, great game, check it out, and I'll be waiting for my rematch in Tekken Ball.