By: AIF Staff
Last week, former Speaker of the House and American Idea Foundation President Paul Ryan moderated a conversation with elected officials, on-the-ground community leaders, and researchers about the development of Opportunity Zones. Opportunity Zones, which were part of the Tax Cuts and Jobs Act of 2017, are a poverty-fighting tool designed to stimulate investment and development in economically disadvantaged areas across the country through the use of tax incentives.
The virtual discussion provided an update on the progress being made and the challenges being faced by policymakers and community leaders as Opportunity Zones have started to germinate. Consistent with the American Idea Foundation’s mission, the panel showcased how Speaker Ryan is serving as a connector between policy makers, policy and analytical experts, and on-the-ground leaders. Joining Speaker Ryan in conversation were:
- Congresswoman Terri Sewell of Alabama, who is working to improve Opportunity Zones on Capitol Hill, ensuring they meet their mission of revitalizing communities.
- John Persinger, CEO of the Erie Downtown Development Corporation who is currently spearheading the development of a promising Opportunity Zone in Erie, Pennsylvania.
- John Lettieri, President and CEO of the Economic Innovation Group (EIG), who is adding intellectual analysis and key perspectives on the best practices for those involved with Opportunity Zones.
- Patrick McKenna of Catalyst Opportunity Funds, who provides analyses for investors so they can maximize the benefit for both businesses and communities in Opportunity Zones.
The Foundation has included excerpts of all of the panelist’s contributions (Lettieri and McKenna, and Sewell), and included below are some highlights from John Persigner, who is helping rejuvenate Erie, Pennsylvania.
In summarizing the challenges and the progress being made in Erie, PA, John Persinger detailed how this policy is spurring development and making a real impact:
“At the Erie Downtown Development Corporation, we are working in one of the poorest zip codes in America. The median income in our area right here is $10,631 so as you can imagine, there are individuals who have live a different lifestyle than every experience that you and I and probably everyone else participating in this webinar has experienced. I don’t think they’re understanding that [change] is coming from Opportunity Zones. For their perspective, they want [to be] optimistic about the changes that are to come.
“To give you two concrete examples: As one part of our plan, we acquired and tore down a McDonald’s. I know you were a former McDonald’s employee but the McDonald’s in Downtown Erie, you would walk in there and there are people who were overdosing. It was a problem, right around people who are trying to live down here and so that was a problem we had to get rid of. Second, the individuals who are living down here don’t have a stable supply of fresh, healthy food. We are in a USDA-designated food desert. Your options are to go to the Dollar General that is a few blocks away or to go to a corner store and get some boxed items. They don’t have a fresh-food grocery store down here so, that is one of the things that we are going to bring to downtown thanks to Opportunity Zones.
“We have five historic properties on a block that overlooks our main parking downtown. These properties are about a total of 100,000 square feet and have been vacant for decades, and they’re blighted. One used to house a former biker bar and what we are doing is turning that into a culinary arts district. There’s going to be a fully operating grocery store. There’s going to be a Food Hall with nine new businesses and there’s going to be a culinary incubator so the individuals who live in this community are not only going to have access to a fresh supply of healthy food but they’re also going to be able to tap into the jobs that are going to be created down here.”
Speaker Ryan asked Persigner about how Erie partnered with the community and the private sector to launch its rejuvenation campaign:
“What’s great about Opportunity Zones is that it leaves it up to the local actors on the ground to fund the projects that need the capital. There’s no government timeline. There’s no funding cycle. There’s no application cycle. It is really up to the investors and the shovel-ready projects, so this is what we needed to turbo-charge our revitalization of downtown. There are a lot of people that have been a part of this process: The city [of Erie] for getting the comprehensive plan done; the private sector and raising the initial capital so we could get our work done; we work very closely with our Congressman, Mike Kelly, and our two Senators and our state elected officials. We work closely with a lot of outside groups like EIG and the Sorenson Impact Center who have helped us learn from other communities. There’s been a lot of teamwork. It has been four years in the making to get to this point of where we’re deploying capital, [and it was] a big, bipartisan, community effort to get to this point.”
In closing, Speaker Ryan summarized why this conversation matters in his concluding thoughts:
“The great promise of America is that the next generation is better off than the previous generation. For too many people in too many communities that promise seems to be breaking.
“Opportunity Zones have the potential to restore that promise by providing private sector capital to neighborhoods and communities that have been underserved for too long. We’re seeing that success already, and our panelists today are doing the hard work to ensure that the promise of Opportunity Zones is fulfilled.”
The hard work is ongoing to ensure Opportunity Zones mind their mission and are utilized as tools for revitalization and rejuvenation, not gentrification or displacement. By providing unprecedented amounts of investment and resources to help communities build themselves back from the ground-up, Opportunity Zones have tremendous potential. However, that potential will only be realized if lawmakers work collaboratively across party lines and strategically with local leaders and investors. Opportunity Zones cannot and should not primarily be a passive parking space for investors’ capital, rather these tax incentives should actively support the communities and the residents in them to improve outcomes and the overall quality of life in areas that have long been distressed.
The American Idea Foundation, led by Speaker Ryan, will continue to do its part so this public policy increases opportunities for residents to fulfill their potential and realize their version of the American Dream.