About Opportunity Zones
Opportunity Zones are economic development tools promoting investment in distressed communities through legislation enacted by the Federal Tax Cuts and Jobs Act of 2017. Communities have been designated as Opportunity Zones by the U.S. Department of Treasury, incentivizing investments in these distressed communities to better address local needs in areas such as business growth, real estate investment, and area improvements.
Indiana Opportunity Zones
Indiana has a total of 156 Opportunity zones in 83 different cities and towns. These zones cover over 1,000 square miles and have a combined population of more than 500,000 Hoosiers. While each Opportunity Zone offers investors the same federal capital gains tax advantages, all Zones are not created equal. It is estimated that there is over 6 trillion dollars in eligible capital gains.
All Opportunity Zones will compete for investment but some Zones will stand out immediately due to obvious pro-investment market conditions. However, most Zones may not be obviously distinguishable in terms of investment advantages meaning communities will have to strategically positon their zones to appeal to investors. Elkhart Indiana has one Opportunity Zone which falls into the latter category.
Elkhart Opportunity Zones
Elkhart’s three Opportunity Zones (OZ’s) have many pro-investment features including strong industrial and rail assets, TIF districts, and a recently planned and now being implemented mixed-use River District. These features suggest the Opportunity Zones have the ability to support and attract a diverse set of investments. However, Elkhart will likely have to compete for investment with large MSAs such as Chicago and Indianapolis. Investors looking at Zones in these cities may not consider or be aware of the advantages offered by Elkhart’s Zones.
Furthermore, potential local investors such as business owners may not know how to take advantage of Opportunity Zone incentives that could assist with local expansion or improvement projects. Elkhart’s OZ’s are in various states of planning and land use programming – all are in need of some level of redevelopment. For these reasons, Elkhart should develop an approach and plan to tell the City’s story with a narrative that demonstrates the community’s pro-investment opportunities, with the ultimate goal of attracting investors and new development.
The City of Elkhart will be creating a team that will be working with local organizations to develop and implement an Opportunity Zone Growth Plan by June 2019.
Are you located in an Elkhart Opportunity Zone and working on a development project?
Arrange an interview with our OZ consultants to learn the benefits of being featured in the City’s OZ Prospectus