Fifth Third Bank is committing $20 million for Chicago neighborhoods as part of the Opportunity Zones federal tax program that encourages investment in economically distressed communities.
The money will align with the city’s new INVEST South/West initiative to marshal resources to 10 under-resourced neighborhoods.
“Those are areas in the city where community stakeholders have really been plans to make their communities thrive for years if not decades. The purpose of these investments is to give life to that work that’s already been done,” Mayor Lori Lightfoot said Monday morning during the announcement at the Stony Island Arts Bank in the Greater Grand Crossing neighborhood.
Opportunity Zones stem from President Donald Trump’s major tax cuts law from 2017, which allow investors or for-profit companies to defer or reduce taxes on their capital gains. The state of Illinois determined the 133 Chicago census tracts that qualify for Opportunity Zone money. An industrial building in Pullman and retail space in a mixed-use Chicago Housing Authority development in North Lawndale are notable Opportunity Zone projects.
A criticism of Opportunity Zones is that there’s no official record keeping of projects.
Fifth Third Bank won’t announce where its projects are going just yet. Decennial Group said they will be revealed in the “coming months.” The Chicago-based firm is partnering with the bank to identify and invest in projects. Funding priorities are affordable housing, mixed-use real estate and multifamily development.
“Opportunity Zones — they’re going to be so impactful for our city,” said Decennial co-founder Scott Goodman. “They’re going to bring just an amount of investment that really creates jobs, that betters living conditions for residents.”
The bank said the Kresge Foundation will track and measure the impact of Opportunity Zones.
“We want our Opportunity Zones investments to make a deep and lasting and positive impact,” said Mitchell Feiger, regional chairman and CEO of Fifth Third Bank, Chicago.
Illinois Gov. J.B. Pritzker also announced a $12 million capital program to encourage private investment in Opportunity Zones statewide. Communities, nonprofits and developers can compete for those dollars to support capital projects.