Opportunity Zone Magazine Volume 1, Issue 3 | Page 26

26 OPPORTUNITY ZONE MAGAZINE | VOLUME 1 • ISSUE 3
SCALING OPPORTUNITY
ZONE INVESTMENTS
By Bo Kemp
How cities can position themselves to attract OZ capital by developing multifaceted strategies.
As cities consider how to engage private capital to
attract its share of the $6 trillion of potential capital
gains in the stock market for OZ investment, the
one refrain that should echo in their thoughts is that “scale
matters.” The scale of potential projects will influence the
type and nature of interested investors but also the impact
and support of the project from the community at large. Most
cities are focused almost exclusively on single asset projects
– private transactions sponsored by professional investors
where the city works to help attract additional capital to
complete funding. Smart cities need to develop a multifaceted
strategy that includes single asset projects but also includes
master planned, large scale projects down to community
development, neighborhood scale investments.
The OZ legislation allows for investments at any size – from
$5,000 to $50 million or more. Because the regulations took
some time to be clarified and they mimic, in many aspects,
that of New Market Tax Credits, much of the OZ investment
to date has been real estate oriented and focused on
multifamily and mixed-use projects in census tracks that have
already become investment targets of private capital. For cities
to encourage investments in census tracks that have suffered
long stretches of disinvestment, municipalities will need to
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