Opportunity Zones Webinar Series Series 1 – Recap/Update/Resources

Today’s Presenters Michael Eggleston, Community Development Advisor – Finance Federal Reserve Bank of St. Louis Michael.C.Eggleston@stls.frb.org www.stlouisfed.org/communitydevelopment Sallie Hemenway, Division Director, Business and Community Services Missouri Department of Economic Development Sallie.Hemenway@ded.mo.gov www.ded.mo.gov

Today’s Content Webinar Series Opportunity Zone Recap Update Resources Next 3 Wednesday’s at 11:00 AM Guest speakers Opportunity Zone Recap Update Resources Q&A

Opportunity Zone Webinar Series Sept 26 - Updates, Resources and Actions-What We Can Do Now/What Others are Doing Speaker: Michael Eggleston, St. Louis Federal Reserve, Sallie Hemenway, DED) This session provides a refresher on Opportunity Zones in Missouri and nationwide, what resources have been made available in the months since the designation and what activities States and Local governments can undertake to maintain an edge. Oct 3 - Investors and Deal Flow - Marketing Your Zone Speaker: Director Walters, DOR, TBD This session focuses on the different types of strategies can communities deploy to attract investors.  

Opportunity Zone Webinar Series Oct 10 - Entrepreneurs and Opportunity Zones/Sparking Investment Speakers: Bill Anderson, TBD    This session describes the match of angel and early stage investors with opportunity zone funds to take advantage of benefits tied to those riskier equity investments. Oct 17 - Fund Management and Treasury Regs Speakers: Brian Bear, DED, UMB Bank representatives This session reviews the most recent information from Treasury and identifies funds and fund management in the works.

Opportunity Zones 8700 Zones designated by U.S. Department of the Treasury last spring

Opportunity Zones 11% of the US population and territories lives in an Opportunity Zone Evenly split between urban and rural zip codes Households in Zones have lower home values, lower homeownership rates and higher levels of cost burden States did not nominate “high end” – Chose higher need areas – Average poverty rate = 31% 3/4ths in zip codes with employment growth Sources: Zack Patton, Enterprise Community Partners/EIG

Missouri 161 Zones Designated Represents 47 different cities/counties Every applicant received at least first choice Complete list https://ded.mo.gov/sites/default/files/Opportunity %20Zone%20List_0.pdf Each has identified opportunities for investment, plus opportunity to improve Zone economics

State of Missouri Zones

Kansas City Zones

St. Louis Zones

New Tool = New Actions Designed to attract long term private investments in distressed communities U.S. investors hold $2.3 trillion in unrealized capital gains – untapped resource (Source LISC, NMSC) Not a typical economic development tool Requires new pro-active steps by communities and states to be successful No prescription – opportunity to shape market Requires creativity

Information & Timeline A few myths dispelled: Opportunity Funds can invest in any Zone, even across state lines Funds organizing now are not all privately held Funds accepting investments now still face some risk without final rule. IRS/Treasury New Q&A – September IRS/Treasury rules – November/December

What steps can we take now? Develop local strategies for building your market Engage the market place Recruit investment Identify investors and fund managers Identify entrepreneurs, property developers Steal ideas from other states/cities Make suggestions for what role DED can play Ex: Investor/project website Research on-line resources

Opportunity Zones Webinar Mike Eggleston September 26, 2018

The views expressed in this presentation are my own and do not necessarily reflect the views of the Federal Reserve Bank of St. Louis.

CDFI Fund – List of designated Opportunity Zones IRS – Frequently Asked Questions

Program Description/Formal Guidance News and Updates Analysis Maps FHFA went through full rulemaking process in 2009. Then went through a second rulemaking process in 2015. Finalized the end of 2016. GSE’s plans approved the end of 2017 and implementation began 1/1/18.

Program Description/Formal Guidance: IRS: Mention a couple of the FAQs on IRS’ website Possibly mention EIGs description of the investor benefit CDFI Fund:

News and Updates: Economic Innovation Group Novogradac: EIG – news aggregator for all things Opp Zone Novogradac:

Analysis Urban Institute: Council on Development Finance Agencies

Maps

Maps

cdfifund. gov/Pages/Opportunity-Zones. aspx https://eig irs.gov/newsroom/opportunity-zones-frequently-asked-questions novoco.com/resource-centers/opportunity-zones-resource-center enterprisecommunity.org/financing-and-development/opportunity-zones-program  cdfa.net/CDA/cdfaweb.nsf/resource centers/OZ.html urban.org/policy-centers/metropolitan-housing-and-communities-policy-center/projects/opportunity-zones  stlouisfed.org/community-development/data-tools/opportunity-zones-explorer

Mike Eggleston Federal Reserve Bank of St. Louis Michael. C Mike Eggleston Federal Reserve Bank of St. Louis Michael.C.Eggleston@stls.frb.org Reference table 1 and table 2 from DTS brief. Activities include: Loan product development, loan purchase, direct investment and outreach/research