5 Steps to Building a Successful Qualified Opportunity Zone
The federal Qualified Opportunity Zone (QOZ) program spurs economic development and job creation in low-income communities by offering tax incentives for investment into designated distressed census tracts. In 2018, Pennsylvania nominated 300 census tracts for QOZ designation based on their distressed economic status, recommendations from local partners, and the likelihood of private-sector investment in those specific areas.
To learn more about how Pennsylvania communities are using QOZs to drive investment we spoke with Brett Wiler at the Flagship Opportunity Zone Development Company in Erie, PA. Learn about Erie’s experience and advice for how to drive community revitalization and attract business investment.
1. Have a vision for your community’s future.
When seeking business investment, it’s important for the community to have a shared vision for the future. Revitalizing a city can be challenging, and to get there it is vitally important to have all stakeholders working towards common goals. When a community comes together with a shared vision it creates a positive environment. In Erie, we knew we needed a community vision, so we worked with professional planners, community leaders, and our economic development team to create a master plan to transform Erie. We found success by focusing on our community’s strengths, rather than competing with neighboring communities. This set the stage for us to be ready to add social, physical, and economic value our community.
2. Lay the groundwork for attracting investors.
To attract investment into a community (and QOZs), Erie started with establishing local commitment and investment. We deliberately took time to quantify the availability of local capital and identify supportive investments that were needed to help build the foundation for future growth. In doing so, we discovered the need for – and made – local investments in transportation, infrastructure, and private real estate development.
3. Build your prospectus and find specific projects ready for investment.
Once we had our supportive investments underway, we identified specific projects ready for investment and development in our QOZs. We found it helpful to build a database to track information about projects and opportunities. Having clarity about where your community wants to see growth – and knowing which projects are ready for the next step – is critical when seeking commitments from prospective investors. To help information and investment flow more easily, the Erie Regional Chamber and Growth Partnership created a new subsidiary (the Flagship Opportunity Zone Development Company) to build out the city’s portfolio and act as a central organizer for attracting investment to all eight of Erie’s QOZs.
4. Identify potential local investors, funds, and partners.
With our projects in hand, we found ourselves well-positioned to begin approaching potential local investors and funds interested in growing their portfolios. In our experience, it has been beneficial to develop and nurture strong relationships with local partners, including venture capital firms, and local community and economic development organizations. These kinds of partnerships in Erie resulted in significant capital investment from anchor institutions in our city and region. Local engagement is often the strongest driver of investment.
5. Tell others your story.
As we have worked through our process, Erie hasn’t been shy about sharing the story of our transformation and successes – including our small wins to major investments. They all play a role in contributing to the future we want to see. We have learned that sharing the story of our community is a significant cornerstone of our investment prospectus for our QOZs. Being prepared to talk about our community’s revitalization, cite specific achievements, and paint the picture of our expanding future opportunities has been vital for continuing to attract ongoing attention and investment.
At the end of the day, there is no cookie-cutter approach to community transformation. Each city, town, and municipality is different, offering unique challenges and opportunities. But we believe that by sharing our experiences with our colleagues across Pennsylvania – and the nation – our approach may help to serve as one possible model for community redevelopment, reinvestment, and revitalization.
To learn more about Pennsylvania’s Qualified Opportunity Zone (QOZ) program and to view an interactive map of our more than 300 QOZ sites, visit the DCED website.
For information regarding Erie’s opportunity zones efforts and/or their concierge services, visit the Flagship Opportunity Zone Development Company.
Brett Wiler has been practicing economic development for nearly 10 years with a focus on business retention and expansion, new business development, workforce development, and entrepreneurial ecosystem building. Brett was the City of Erie, Pennsylvania’s first-ever Business Development Officer where he was the primary architect of the City’s first-ever City-wide Investment Prospectus. This work led naturally to his new role as the VP of Capital Formation for the Flagship Opportunity Development Company.