The Chicagoland Opportunity Zones Consortium has formed to ensure that a federal tax program created for rich investors to fund development in low-income communities goes well.
Opportunity Zones are part of President Donald Trump’s major tax cuts law from the end of 2017. They allow investors or for-profit companies to defer or reduce taxes on their capital gains. That money is made available for investments in economically distressed areas.
There are nearly 200 census tracts in Chicago and suburban Cook County that qualify as Opportunity Zones. But even before the pandemic there weren’t a lot of local projects. And there’s no oversight or tracking of projects on the local or federal levels.
The consortium is a partnership with lenders, foundations and government. Robin Schabes is the new executive director and sees the consortium’s function as more of a facilitator.
“Matchmaking,” Schabes said, “whether it’s a potential opportunity with a prospective investor, education is a big component of what we’re going to do.”
By actively looking at sites in the eligible census tracts, the consortium hopes it can spur investment, create jobs and bring equitable development. It can connect community partners and developers with wealthy investors. A website highlights opportunities.
Across the country, Opportunity Zones have come under criticism for not being an economic tool that helps disinvested Black communities, especially. While there are compelling examples of community benefit, the program is not living up to its economic and community development goals, according to an Urban Institute report released last week.
Public sector money has been stretched thin with the current economic challenges brought on by the pandemic, said Robert Tucker of the Chicago Community Loan Fund. Opportunity Zones provide an opening.
“These are private funds that we really believe will be critical to supporting the communities and the businesses that are ultimately the heart and soul of the region. So we want to see deals get done,” Tucker said.