Established in 2017, opportunity zones were created to supply tax advantages for certain investments in lower income areas. To put in perspective the amount of opportunity zones in Chicago, there were roughly 500 census tracts eligible, but only 133 were approved (BisNow). In this particular article, the focus is placed on three areas in Chicago predicted to highly benefit as part of the opportunity zones, especially in the long term.
The first tract covered is located on the Near West Side between the United Center parking lots and Metra tracks and directly west of the new Fulton Market office hub. The second tract, is the former Michael Reese Hospital. The third tract is located in the Illinois Medical District south of Roosevelt Road and parts of Pilsen (BisNow). With these three opportunity zones being so close to downtown, it will definitely play a key role in attracting investments and help the areas prosper.
CBRE First Vice President, Mike Nardini, expressed his thoughts on this opportunity zone. Nardini does not believe these tax breaks are proving to be any incentive to bring investment into the area that would have been brought into the area eventually.
With development taking place south of Roosevelt like the $300 million Gateway project, which will bring offices, residences, and a hotel to the area, and the re-development of the former Cook County Hospital, this will attract more investment to the area to help this district thrive. Nardini believes the opportunity zone in this district will eventually help balance out the north and south halves (BisNow).
Origin Investments, a Chicago-based private equity real estate fund, launched a qualified opportunity zone fund which gained $105M in commitments from 425 investors in just 17 hours. With such high interest, this should be a positive sign for the opportunity zones, but there is still a long way to go.
Experts believe there will need to be some public-private partnerships to take full advantage of the opportunity zones, which means it will take more time. However, this will positively impact the people in the area by creating more jobs and economic opportunities.
It may not happen quickly, but the opportunity zones should help bring in investments to these areas of Chicago and create growth in jobs, businesses, and future endeavors.
To read BisNow's article, click here.