Cleveland – March 21, 2019 – A collaboration of public and civic leaders are today launching an investment prospectus, digital portal and website aimed at attracting local and national investment into Greater Cleveland’s Opportunity Zones, a new federal designation designed to spur development in economically distressed areas.
Opportunity Zones (OZs) encourage long-term investments in low-income census tracts selected by the governors of each state. Of the 320 Opportunity Zone census tracts in Ohio, 64 (20%) are located in Cuyahoga County, with 48 in the City of Cleveland and 16 in the surrounding suburbs.
The partners in the collaborative, operating under the moniker Opportunity CLE, are the City of Cleveland, Cuyahoga County, Greater Cleveland Partnership, Cleveland Development Advisors, the Fund for Our Economic Future and the Cuyahoga Land Bank. The group enjoys the support of The Cleveland Foundation, The George Gund Foundation and many other entities and individuals.
Opportunity CLE is placing a significant emphasis on developing the county’s OZs in a socially responsible manner that provides opportunities for residents of the zones. Opportunity CLE encourages those interested in OZ projects to visit the web site (www.OpportunityCLE.com) and contact the team.
The federal government is expected to soon issue highly anticipated clarifications relating to investing in OZs, which were authorized in 2017. When those clarifications are issued, many believe it will trigger substantial activity among OZs investors.
The program allows individuals to defer any tax owed on capital gains by investing the realized gains in zones, with greater incentives the longer the investment is held. Developers and investors around the country have been waiting on federal rules for the program to be finalized.
“The floodgates are about to open regarding investment in Opportunity Zones,” said Joe Roman, president & CEO of Greater Cleveland Partnership, “and we are gearing up to aggressively compete for investments in Cuyahoga County projects. This program has the potential to raise hundreds of millions of dollars for catalytic urban development opportunities here, stimulating growth and job creation in Cleveland and surrounding communities.”
There’s an estimated $6 trillion in unrealized capital gains in the U.S. – a huge pot of equity that would benefit from the tax breaks offered to investors in OZs.
Cuyahoga County Executive Armond Budish said, “We have come together to help ensure that we are not only aggressively and effectively competing for these funds, but that we are also strategically promoting developments and investments targeted toward projects that are socially responsible – meaning they lead to jobs, housing, new businesses and other improvements for residents of our communities.”
Cleveland Mayor Frank Jackson added, “Opportunity Zones provide a new resource for investment in our neighborhoods that can fund businesses and real estate developments. The City of Cleveland worked with its partners to create tools to attract investments from across the country in an equitable and impactful way. We look forward to working with investors to help grow Cleveland’s economy and better the quality of life in our neighborhoods.”
“Do well by doing good”
At its core, the team’s intention is to bring attention to projects that are not only attractive financial investments, but also provide positive social impacts, including jobs, training, education, quality affordable housing, increased access to broadband, public transportation and healthy living environments.
“We believe there is a large segment of socially-committed investors who would be attracted to successful projects that yield significant social improvements,” said Yvette Ittu, president of Cleveland Development Advisors – the real estate financing affiliate of the Greater Cleveland Partnership. “Financial success and social responsibility are not mutually exclusive. It is our intent to do well by doing good.”
Brad Whitehead, president of the Fund for Our Economic Future, added, "This set of actions is a critical first step in ensuring our community fully capitalizes on the legislation. The partners also know that we must take additional steps so that a robust portfolio of deals that deliver high social impact has the support it needs to thrive."
There are thousands of designated Opportunity Zones across the country that were created as part of the federal Tax Cuts and Jobs Act of 2017. Opportunity Zones are census tracts that have poverty rates of at least 20 percent. Tracts adjacent to qualifying zones can also be designated Opportunity Zones.
In Cuyahoga County, 140,051 residents live within Opportunity Zones. Opportunity CLE has grouped Cuyahoga County’s 64 zones into 11 districts.
Gus Frangos, President and General Counsel for the Cuyahoga Land Bank, said Opportunity Zone investments “in these designated areas may provide crucial funding that could mean the difference between a project going forward or not. It’s private money that’s either going to be invested here or somewhere else in the U.S. We’d be negligent if we didn’t vie for the investments.”
Securing private investments for OZ projects in Cuyahoga County leverages yet another valuable economic development resource for the community, freeing up traditional development resources for use in other worthy projects. Adding OZs to our community’s economic development toolkit allows us to stretch our resources further and could trigger a very positive ripple effect, leaders said.
GCP’s Joe Roman added, “Greater Cleveland has long fought to reposition and reshape our economy. We have made great progress, but there is more work to be done. This will undoubtedly lead to a lot of good work being done in some places that can benefit from it the most.”
The Opportunity CLE portal is designed to match up developers and business owners in designated Cuyahoga County OZs seeking additional equity with prospective investors. The portal – created by the Opportunity Exchange, a Cleveland-area startup – allows developers and business owners the ability to promote their OZ projects on a global scale and provides investors access to the growing number of OZ projects in the county.
To submit an OZ project, find OZ investment opportunities, or for additional information, see the links below: