Operation | Cabana
By: Valley Greenhouses, LLC
1468+
Greenhouses Built
52+
Countries
88
Years of Experience
Executive Summary:
Qualified Opportunity Funds (QOFs) have attracted significant attention as a potential major source of untapped capital to revitalize under-served communities and as an outlet for investors to preserve capital gains by unlocking substantial tax incentives, while potentially generating additional investment yields. Enacted as part of the 2017 Tax Cuts and Jobs Act, the Opportunity Zones program was established to encourage social advancement and private investment in low-income communities to aid job creation and new business formation.
The program incentivizes investment by allowing for a deferral of capital gains, reducing tax obligation on a portion of those gains and, most notably, allowing QOZ investments to grow tax-free. Revive Qualified Opportunity Zone Fund is a new and radical investment opportunity with a nationwide focus.
The Revive Qualified Opportunity Zone Fund seeks to acquire and develop a diversified portfolio of impactful and game-changing projects focusing on real estate, agriculture, technology, energy and beyond.
Investment Thesis:
Revive’s first Opportunity Zone investment will be in Valley Greenhouses LLC, which will own a 50-acre hydroponic greenhouse facility in Lawton, Oklahoma located in a Qualified Opportunity Zone (QOZ).
The fund’s project will be built and operated by Dalsem Greenhouse Technology BV, a Netherlands company which has completed nearly 1500 greenhouses in 52 countries world-wide, with over 87 years of experience in the industry. The Project will meet demand for agricultural products from regional and local produce wholesalers.
Revive Qualified Opportunity Zone Fund (QOF) will use a balance of equity and debt to meet a $43.7M financing gap. The total upfront project cost is $80.9M, and the majority is financed through soft capital of $37.2M(45.98% of total). An additional $15.74M of soft capital inflows occur over the project term.
The flat 50-acre site is located adjacent to Interstate 44, just 172 miles from the growing North Texas area of Dallas-Ft. Worth(pop. 7 million) and has been certified as site ready, by the Oklahoma Department of Commerce.
Unique & Rewarding
- Blended capital stack: high ratio of soft capital to debt and equity. $52.94M in city, state and federal program commitments secured. $37.2M upfront and an additional $15.74M of inflows over the project term. This soft capital securitizes the equity gap and a debt portion.
- Mitigated execution risk due to experienced contract operator. Initial two-year contract secured with Dalsem Greenhouse Technology BV to build and operate the facility, including training all staff and managing to efficiency goals.
- Higher production rates and lower production risk through hydroponic greenhouse growing methods. Advantages include uniform appearance, increased yields per acre, year-round production, reduced reliance on water – 90% less than field-grown, and reduced pest, disease, and pesticides.
- High market demand for US-grown products. 70 to 80% of tomato products are imported from international markets. internationally and takes 13 days from picking to supermarket. Estimated 30% distributor savings in reduced shipping needs for domestic products.
- Management team with deep local ties and track record of investment management. Legendary Oklahoma sports backgrounds and 50 years of finance and development experience across public, private & non-profit sectors.
Value & Relations
The team has relationships with all the major distributors, including SYSCO, HEB and USDA, as well as many of the 90 regional distributors in Northern Oklahoma. Produce Purchase Agreements (PPAs) will be pursued with these distributors and chain grocers with a primary philosophy “local produce for local markets”.
Valley Greenhouses value proposition is as follows: fresh produce grown without pesticides, delivered, and distributed shorter distance to maintain freshness and taste, cutting down on spoilage, transportation costs and overall impact on the environment. This effective way of operating results in a high-quality product available to a distributor at a reasonable market cost.
VALLEY GREENHOUSES SYSTEMS
A cut above the rest with Hybrid LED grow-light system. Solar panels to offset energy use, 28-day grow cycle High-tech water, humidity, temperature management system. With durable construction and advanced energy efficiency system. Along with water preservation, reuse and cogeneration geothermal heat installations.
