IT TAKES A DECADE TO SUCCEED - GET TO KNOW YOUR OZ PARTNER
61 needs to remember that investment begets investment . Cities don ’ t stagnate , it ’ s either investment , or disinvestment . With this in mind , it might be a good idea to take a look at the typical project approval process and see where project entitlements and approvals can be accelerated . Where local leaders have the ability to approve certain projects by-right ( reducing entitlement risk ), they should look for and communicate those strategic advantages clearly to the investment community .
WHAT ARE THE SHARED GOALS THAT PUBLIC AND PRIVATE SECTOR PARTICIPANTS SHOULD BE FOCUSED ON ?
Every OZ provides the possibility to build new businesses and real estate projects that can provide significant return to investors , and create immense value for residents , workers , and stakeholders in communities that for decades have struggled to attract new investment . City leaders and the investment community share a goal of seeing the OZ neighborhood become more prosperous over time . In Evansville , Indiana , the city worked closely with a developer to create a shared set of project goals . The city came to the table with their own internal goals for housing and other community priorities . In doing so , the city and the developer were able to discuss how they could help each other achieve their respective goals , and this made for a great partnership .
When you consider that an OZ project may be held for ten years or longer , it behooves the city and developer to coordinate their strategies and their investments for maximum success . Consider how public investments in infrastructure , education , workforce training , transportation , and the public realm can be aligned with investor preferences for project delivery and appreciation . surrounding neighborhood , its residents , and stakeholders . What can a community reasonably ask for in terms of affordable housing and other benefits ? What should an investor reasonably expect in terms of public contributions , incentives , or other support from the community ? This is where the opportunity for real partnership arises as successful investment is good for the investor and the community .
Long term partnerships are key to the OZ investment success , so when evaluating a new community , aim to understand their overall goals for growth , the specific investments they intend to make , and the efforts they will make to support project success .
The shared goal is value creation . How each side defines success , and the metrics they use to measure it should be clearly defined as part of any initial conversation and central to discussions going forwards . At the end of the day , investments in OZs is about creating long lasting relationships .
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Special thanks to Josh Mann of IronOre Investments , Kurt Overmeyer of Seaside California , Gil Keinana of Local Equity , Matt Gadus of House Investments , Kunal Merchant of CalOZ , Michael Episcope of Origin Investments , and Payton Chung of WestOverGreen for their contributions .
In low-income communities , city leaders need to be focused on community assets like housing , jobs , reducing blight , environmental improvements , and improving access to education and healthcare . A good OZ project can support many of these priorities , which is why coordinating public and private sector investment is key to creating financially successful projects that also improve lives . There ’ s nothing more valuable than getting a proof point , especially in underserved communities . The first investment can be a catalyst for new projects , and the velocity of capital keeps people at work .
WHAT ARE THE COMPETING PRIORITIES AMONG THE PUBLIC AND PRIVATE SECTOR ?
Public agencies are responsible to their local constituents and driven to enable a better quality of life for residents and business owners . As such , they have expectations for what a project should contribute to their community . On the other hand , private sector OZ investors are not philanthropic , they need to be able to make a profit , and they have choices as to where to invest their dollars . This raises the issue of value creation , and the tension of how value is shared between the investment community and local residents and stakeholders .
The unique nature of the ten-year hold for OZ investments creates a remarkable opportunity for the two parties to get aligned , in that the overall success of a single project is tied to the prosperity of the
Ian Wolfe Ross is the founder and cheif executive officer of OppSites , a marketplace and network platform that connects people with project opportunities . OppSites hosts the opportunity zone marketplace and network for the states of California and New Jersey , and has dedicated business and real-estate networks in every city and every state .
Ross is a principal with OppSites Advisory Services , providing strategic consulting and capacity to local leaders , economic development organizations , public and private sector professionals , thereby , leveraging opportunity zones to drive economic prosperity .
Sources :
1 According to fatherly . com
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