By Anayat Durrani
To educate and strengthen rural communities nationwide and bring investment into local communities, The Sorenson Impact Center has created the “Rural Opportunity Zone and Recovery Playbook: A new blueprint to attract private investment for community priorities.”
The guide was funded by the federal Economic Development Association (EDA), with match funding by the Governor’s Office of Economic Opportunity (Go Utah).
“When the Opportunity Zone legislature came out, our team spent a lot of time around Utah educating local communities on how they could use the incentive to fund projects for community benefit,” says Megan Brewster, senior manager, Sorenson Impact Center. “We found that there wasn't a clear resource on how communities can prepare before they even speak with investors, and so we created the playbook in partnership with the Utah Association of Counties to codify that process and capture our learnings.”
When developing the playbook, she says they recognized that rural leaders are often under resourced and overburdened with demands, “so the playbook exists to help short cut their learning on how to attract private capital.”
Playbook offers Opportunity Zone tools
The playbook aids economic development experts and community champions, she says, by giving them the tools they need to create a pipeline of projects, build community consensus, and target mission-aligned investors for public and private sector capital. She says the playbook provides a six-step process that economic leaders in rural communities can follow to recruit capital and develop investor confidence. These include: 1) plan for social impact, 2) build your team, 3) understand investors, 4) leverage incentives, 5) create a community vision and project menu, and 6) connect with investors.
“Beyond this process, we've also found communities who are successful in making these deals happen often have a local investor who aligns with the community values, and they focus on a regional approach that connects with other communities around them,” says Brewster.
Opportunity Zone guide aims to help communities attract investments
The guide highlights successful case studies and examples of community-led investment projects nationwide, such as from Utah, where the Sorenson Impact Center is based at the University of Utah David Eccles School of Business. Featured case studies include The St. James Hotel in Selma, Alabama through Opportunity Alabama to The Thrive Multigenerational Wellness Campus in Kentland, Indiana through the Indiana Rural Opportunity Zone Initiative.
The Playbook also identifies additional sources for community investment funding, such as federal and state grants and for-profit investment capital.
In the first year of the OZ policy, the top 5% of OZ tracts received 87% of total investment, while 84% of tracts received no investment at all, per research from the University of California Berkeley. The concentration of OZ activity, experts argue, has resulted in many communities being left out from reaping the benefits of a program designed to overcome historical disinvestment, such as rural communities.
“One of the things that is so striking about this playbook is that it provides an investment roadmap for communities beyond just the OZ incentive, offering a framework community leaders can draw on to help drive private capital investment at the local level, now and in the future,” Patrick Mullen, Opportunity Zone Consultant with the Utah Association of Counties, a nonprofit supported by the state in providing technical assistance to rural OZ communities, said in a statement.
For the playbook, the Sorenson Impact Center conducted more than a dozen expert interviews and worked two years on the ground with local leaders as a part of Opportunity Utah, Utah’s central OZ task force, which includes UAC, the Sorenson Impact Center, the Gardner Center, and Go Utah.
“The OZ program was created with the intent to drive capital into underserved communities. Rural communities remain overlooked, but have many assets and innovations to offer,” says Brewster. “This playbook can help leaders develop deals with OZ investors, but also can broaden the conversation on how to attract private capital of other types to create a capital stack that really puts a deal over the signature line.”
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