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 OPPORTUNITYZONE.COM