Kesha Ram Vermont Community Foundation November 2018 Vermont Opportunity Zones: An exploration of Rural Innovation & Place-Based Investment Kesha Ram Vermont Community Foundation November 2018

Who am I? Four-term state legislator Former Civic Engagement Director for City of Burlington Candidate for statewide office 2018 Master of Public Administration at the Harvard Kennedy School of Government

What am I doing here? National Context O-Zone Stakeholder Identification Investors, donors, regional banks, private equity groups, credit unions, community development financial institutions, municipalities, state actors, and other interested parties. Potential Investment Portfolio & Prospectus Themes, opportunities, partnerships, projects, and investment narratives. Capital Alignment How do we mitigate risk and enhance resource alignment to absorb capital? Principles & Metrics for Public Value How does mission lead for high impact investment? What is the unique role of the Vermont Community Foundation? Risk of Inaction

WHAT ARE OPPORTUNITY ZONES? Bipartisan component of Tax Cuts and Jobs Act of 2017 Incentive for private equity investment in low-income areas designated as Opportunity Zones Benefits include… Deferral of capital gains taxes Reduction of tax liability at 5/7/10 years Tax-free ROI after ten years

O-Zones: National landscape Approximately 8,000 Zones in US & Territories No designated federal or state intermediary, no ongoing reporting Investment through O-Fund or self certification Wide variety of uses - housing, workforce training, commercial real estate, patent acceleration Must support start-up or double business value No cap on the amount of the benefit in a Zone, distribution of capital gain Opportunity Funds can be project-specific, regional, national, thematic, seeking high ROI, etc. Means intermediaries with trust, relationships, statewide profile can use influence to attract right investors and bolster local leadership

This is both good and bad! Means intermediaries with trust, relationships, statewide profile can use influence to attract right investors and bolster local leadership

O-Zones: Vermont 25 Zones, 17 Towns Barre City (Southwest of Main) Bennington (Downtown & North) Brattleboro (Downtown) Burlington (Waterfront, Pine Street Corridor, Downtown) Johnson Lyndon (Downtown Lyndonville, West of Broad & Main) Newport City Randolph Rockingham (Bellows Falls) Royalton Rutland City (Downtown Core, West, South) South Burlington (City Center) St. Albans City (West of Main) St. Johnsbury Springfield Vergennes Winooski Bennington and Newport City

Advisors & Partners Chelsea Bardot Lewis, Vermont Community Foundation Jason Furman, Harvard Kennedy School, former Council of Economic Advisors Tiffany Bluemle, Change the Story Vermont Scott Giles, Vermont Student Assistance Corporation David Bradbury, Vermont Center for Emerging Technologies Joyce Judy, Community College of Vermont Ted Brady, Vermont Agency on Commerce & Community Development Bruce Katz, Accelerator for America & The New Localism Sol Carbonell, Federal Reserve Bank of Boston Shekar Narasimhan, Beekman Financial Advisors Evan Carlson, Lyndon Economic Development Council Don Sinex, Devonwood Investors Dan Smith, Vermont Community Foundation Tad Cooke, Study Hall

Stakeholder Meetings & Outreach Addison County Regional Economic Development Harvard Social Innovation & Change Initiative Stern Center for Language & Learning Three Squares Cafe Burlington Community & Economic Development Office Karma Birdhouse Town of Johnson Lamoille Economic Development Corporation Burlington School District Town of Randolph Champlain College Leonine Public Affairs University of Vermont Chittenden County Regional Development Corporation Main Street Alliance of Vermont Vermont Birth to Five Milk Money Vermont Vermont Council on Rural Development Dunkiel Saunders Elliott Raubvogel & Hand Morgan Stanley Financial Advisors Vermont Flex Capital Fund Freedom Foods Northeastern Vermont Development Association Vermont Northland Journal Fresh Tracks Capital Vermont Technical College Gifford Medical Center Northfield Savings Bank Vermont Works Glassberg Real Estate Consulting Propeller New Orleans Winooski Community & Economic Development Office Green Mountain Glove Spectrum Youth & Family Services

Lyndon Coworking Space Randolph

Findings States and cities most poised to act have governors and mayors that are playing a significant leadership and convening role. Cities and towns that appear poised to create and fund a project pipeline have: A developed vision and narrative for the future of their community Key stakeholders identified to build alignment A plan or existing framework for community engagement. Possibility of “cataclysmic money” rather than catalytic investment. Inaction on the part of regional and statewide intermediaries may result in Vermont’s most rural Zones being seen as too risky for investment. They would benefit most from: Pooling expertise and support Creation of a regional or statewide portfolio of projects where risks and returns are shared with larger population centers Expedited consideration in the state’s regulatory framework to meet the anticipated timeline of investment benefit.

Urgent projects & Abundant vision Workforce & Senior Housing Hotels Breweries & Beer Gardens Industrial Parks & Co-Working Space Job Creation Low Community Litmus Test for Investment in Business Growth, High ROI Competitive Geographic and/or Nationally Strategic Focus (i.e. CBD) ABUNDANT Mixed Commercial & Residential Projects Hospitality Training Center Local Product Showcases & Event Spaces Start-Up Incubation & Acceleration Workforce Development w/Social Mission Targeted Focus on Rural Populations, New Americans, Women Entrepreneurs Collaborative Thematic Focus (i.e. Alternative Energy, Outdoor Recreation)

Recommendations Statewide intermediaries can play a unique role as conveners and collaborators with the state’s Opportunity Zones. Investment matchmaking Strategic and thematic alignment of projects Pooled expertise and expedited regulatory consideration Tools and resources to deepen place-based investment for low- and moderate- income residents of Opportunity Zones. Helping communities craft an investment narrative and identify champions to build vision, alignment, and engagement, as well as identifying principles and metrics to enhance and measure community impact that can catalyze regional and national philanthropic investment.

Investment principles Keep Dollars in Vermont Clean Water Attract National Investment Food Systems Shared Impact Measurement Access to Arts & Education Community Engagement Diversity & Equity Rural Innovation & Resilience Transit Orientation & Walkability Regional Collaboration Health & Wellbeing Livable Wages Intergenerational Interdependence “If all that happens is communities are able to articulate what their investable narrative is, that's a huge victory.” – Bruce Katz, New Localism

Capital absorption What are the shared priorities that guide investment in our community? How do we currently build a pipeline of investments and projects that help to move us towards our shared goals? What are we already doing to foster the success of equitable community investment? What are the bright spots? What are our gaps? How can we foster a systematic approach to developing and implementing our community’s vision?

“The Opportunity Zones legislation should lead to the creation of a market where there really wasn’t one — investing in communities that have otherwise been overlooked. This will require transparency, authentic community engagement, and space to learn and grow over time. …This policy is in a state of becoming.” Let’s work together to help our families and communities imagine Vermont anew. THANK YOU! Questions?