This week we’ll be speaking with Erin Gillespie, Founder of Madison Street Strategies, an economic development consulting firm, during our next Opportunity Zones webinar on August 14. Erin is also a former Deputy Chief of Staff for the Florida Department of Economic Opportunity and worked closely with former Florida Governor Rick Scott in selecting the state’s 427 Opportunity Zones as well as working with local communities to develop strategies to attract Opportunity Fund investment.
We asked Erin a few questions about the OZ program in local communities and why it’s important to her.
- Why are Opportunity Zones important to you?
The Opportunity Zone legislation gave communities across the United States an incredible opportunity to drive investment to areas that have not seen investment in years, or even decades. Although Opportunity Zones will not be a magic cure for the challenges of investment and development in low-income communities across the country, the legislation does provide a new tool in the toolbox for communities to use to provide increased economic development, including capital investment and job creation, into distressed areas. Investors, developers and communities are excited about the potential Opportunity Zone funding can bring, and they should be! We see this as another way to provide opportunity (there’s that word again) to residents, businesses and others in our communities.
- What are communities looking for in Opportunity Zone developments?
I’ll start this answer by saying every single community is different. That’s good news and bad news. The bad news is it means each community needs to develop a unique strategy, a vision, for all of their Opportunity Zones. That has to happen without additional staff or additional funding coming from the federal legislation. The good news is that each community has the chance to tell its own story, to sell investors that the best place to make an investment is right here. Communities have many resources at their fingertips to drive this investment, if (and it’s a big if) they can dedicate someone to take the program on and be the community’s face and voice for investment. There are several communities across the nation that have taken this on and are way ahead in attracting investment while keeping a community-driven approach.
- How can Opportunity Zones help in creating affordable housing?
Affordable housing is by default a major need in Opportunity Zones, since Opportunity Zones are defined as low-income census tracts in each state. Affordable housing projects already have multiple sources of financing from state and federal funding, all of which can be overlaid with Opportunity Zone investment funding. This creates an opportunity for a return on investment that is attractive to an investor that maybe wouldn’t have created affordable or workforce housing previously. Communities can also make the investment more attractive by securing the correct zoning in advance, ensuring a smooth permitting process, or even donating land for affordable or workforce housing.
- What’s the one thing you would like to change or to see changed in the Opportunity Zone program?
I’m sure many people would answer this question by saying we need reporting requirements. And I think that is absolutely true. But I also think it would be helpful to have more federal and state leadership (not bureaucracy, but leadership) to help communities figure out just what the heck to do with these zones. I hope the federal task force will continue to push good ideas down to federal agencies, but it would also be helpful to have funding to allow communities to tap into experts who can help walk them through the process to be ready to attract this investment. We know that every one of the 8,700-plus Opportunity Zones across the country will probably not see investment, but communities who are ready and prepared with a vision to attract investors will have a better shot. We want to see communities be successful in attracting the right type of investment, both for the community and the investor, but there are still gaps in education and process improvements that need to be made to make this successful for as many communities as possible. And federal or state funding for technical assistance or staffing could go a long way to help many communities.
- What does the future of Opportunity Zones look like?
First of all, I think we will see tremendous growth. We know of many, many deals being locked in right now but so many other folks are skeptical, or at least cautious. And for good reason, without regs being finalized and final details known, it can certainly make sense to be cautious right now. But as we see successful investment in Opportunity Zones, the number of funds and amount of investment in funds will certainly increase dramatically. I also see the single-asset funds being most successful right now, but I think the idea of the large, multi-asset funds will continue to be appealing to investors who don’t want to risk one single project. So, I think the program will diversify and grow.
To find out more of what Erin has to say about Opportunity Zones, attend our webinar and register today.