The process outlined below requires significant time and may conflict somewhat with the Opportunity Zone structure, which incentivizes early investment. It's crucial to be mindful of the fact that OZ investments can and will be made beyond 2019. Nevertheless, for communities without a a plan in place, this process is critical for defining a vision of what OZ investments should look like and creating conditions for investment that benefits residents.
After identifying information about the Opportunity Zone tracts themselves, and while still in the beginning stages of the community planning process, paartners need to assemble general socioeconomic information about the communities where tracts are located. This should include area median income (AMI), education levels, population health, available services, etc., to layer into OZ tract maps.
You should also include local zoning regulations and rules that may impact the types of projects that can be developed within the tracts, and where.
It is also useful to gather any land-use maps that might already exist about the community of focus. Local CDCs and community organizations, as well as municipal, regional, or state agencies, are good sources of such data.
Planners should also collect information on potential projects in the development pipeline of community organizations that have been deemed consistent with the demands of local community members. LISC’s Phoenix office, for example, developed a survey to share with local nonprofits to determine whether they have any projects that may qualify for an OZ investment.
The survey requests information on the geography, type, estimated cost and specs for any of their potential projects, as well as for their current stage of completion.
To establish whether housing projects would fill the needs of the community, the survey also requested information about what types of housing are being developed and the intended AMI bands to be served. These projects could be included on an initial Opportunity Zone map.
One of the potential benefits of the OZ incentive is the potential of attracting new players to the community planning process—in particular, impact investors. Investors in Opportunity Zone projects will need to have capital gains to invest in projects, so you will identify them and determine the right conduits to pull them into the planning process. These entities may include community foundations, banks and insurance companies.
When identifying new equity investors for OZ projects, it’s imperative to understand the rules and regulations associated with the tax incentive, which include specifications about the timeline for projects to achieve the full benefit as well as the type of financing permitted as noted earlier in this section.
After identifying and engaging some of the key players in the community, including new partners related to the OZ incentive specifically, it is important to identify one or more of these players to take the helm of the overall planning effort (as mentioned in Step One). The organization/s chosen must be able to devote considerable time to the planning process and be highly respected by other community stakeholders. LISC, for example, is playing this role for communities in Indianapolis, Duluth, Phoenix and other locations.
The lead organization/s, usually in tandem with a consultant, will draft a project scope, define the boundaries of the planning process, set a timetable and schedule the task force meetings and establish a deadline for the process. It will manage the task force. Based on interviews with key players, the lead organization/s will determine who from this group should join the task force to develop strategy. At a minimum, the group should include community residents and business owners.
Once the groundwork has been laid to establish tracts, gather information on local policies and regulations, and identify potential projects in the pipeline, this information can be used to develop a comprehensive plan that ensures the community’s goals are achieved. To develop the plan, convene a task force made up of local residents, leaders in the community, policymakers, and potential developers and investors.
Chicago LISC, in its planning handbook, notes that these task forces should be comprised of approximately 20 to 30 people who will meet five or six meetings for the full group throughout the year, or whatever timeline the group decides on. Subcommittees can also be formed to focus on specific elements of the planning, and may meet in between the meetings of the larger group.
The task force will discuss the elements of a vibrant community, and should be prepared to discuss questions about how to make improvements to existing infrastructure with this in mind. The task force is responsible for developing a vision for the community plan and the strategies needed to realize that vision.
In some cases, especially in a community without an existing plan, the Opportunity Zones incentive could be a catalyst to create this type of task force. For example, in Pine Bluff, Arkansas, the city council recently adopted a resolution to create a task force that will provide guidance for the creation of an OZ website, provide information to potential investors, recommend new state, local and federal policies and incentives to boost funds returns and increase development in the zones.2
After mapping assets and needs and thinking through potential strategies, the task force should consider which of these strategies and projects take priority. The criteria for making these determinations varies, but the task force should consider the feasibility of each strategy, and whether a given strategy or initiative has a clear champion who can be responsible for driving the work forward. For example, during the planning stages, residents may raise the issue of education options in the community, and discuss what improvements could be made to local schools. A local school board could then be engaged as a champion, if it supports the project, regardless of whether the board was involved in the planning stage.
Ideally, community outreach takes place throughout the planning process to ensure the work meets the demands of local community members and that the plan doesn’t include projects that lack local support or undermine community wishes. The plan also will need to be workshopped with community members before publication. While the community perspective will be represented on the task force, it may not reflect all community members’ perspectives, which is why gathering feedback before publishing the plans is critical.
One effective way to do this is by hosting a community charrette. This process of garnering community feedback on any proposed strategies is particularly important in the context of a plan conducted around OZ, as the community might not be aware which tracts were selected and will need to provide their own perspective on what investments would be most impactful. The charrettes will also serve as an opportunity to fine-tune plans to ensure that they will have the greatest positive impact on the community, and will meet needs.3
After receiving feedback through charrettes and other mechanisms, the task force can make any adjustments to the plan to reflect these points of view before publication.
Many community planning processes culminate with an event to publicize the results of the effort. Hosting such an event can ensure that everyone is aware of the community’s recommendations. It also bolsters accountability for following through with the plan. It is imperative to publish the plan online and via any media that are easily accessible to new partners who might not be as familiar with the traditional methods of accessing community information. Creating more visibility for the plan will also be a mechanism for holding investors and other partners accountable as they layer OZ investments into projects.
LISC Indianapolis, for example, has developed an online portal to connect potential investors and developers with projects. The portal is a good example of how to effectively and efficiently share information on the pipeline of eligible projects, as well as about the needs of the community. (Step Four describes the portal in depth.) On the “About” page of the portal, the team has included information on the intended outcomes of these investments: to support jobs, transform places, support businesses and drive system innovation.