Aurora’s Chief Innovation Officer Adrienne Holloway said the federal Opportunity Zones program could funnel "much-needed capital" to projects in the city. (City of Aurora)
Aurora will be able to participate in a new federal program designed to increase long-term private investment in low-income areas.
Opportunity Zones were established by Congress in the Tax Cuts and Jobs Act of 2017 to provide a tax incentive for investors to put capital gains to use in the zones.
Aurora officials found out this week that five census tracts – four of which comprise a chunk of the near East Side and the fifth of which is on the near West Side – are eligible for the program and were approved by the U.S. Treasury.
“This designation will enable the city to access a unique financing tool that, when leveraged, will drive much-needed capital to projects in Aurora’s low-income communities,” said Adrienne Holloway, Aurora’s chief innovation officer.
The announcement came from Gov. Bruce Rauner’s office. Aurora’s five census tracts join a total of 327 tracts accepted by the federal government in about 85 Illinois counties.
“This is a really exciting opportunity for communities throughout Illinois,” Rauner said in a press release. “These zones include some of the most underserved areas of the state that have the greatest potential for improvement. They represent a broad cross-section of Illinois that includes rural, urban and suburban in-need communities that are ripe for investment and job creation.”
The governor’s office in each state submitted census tracts to the Treasury Department for acceptance into the program. In Illinois, local jurisdictions submitted their suggestions to Rauner’s office.
Hollway said Aurora requested 19 census tracts be included, but only five were accepted. Still, she said “we feel that that the five chosen will greatly benefit from the economic development projects this designation will spur.”
John W. Lettieri, co-founder and president of the Economic Innovation Group, testified earlier this month before the Joint Economic Committee of Congress that “the fundamental purpose of Opportunity Zones is to encourage long-term equity investments in struggling communities.”
Lettieri said officials hope the program will unlock a new category of investors. He said the Opportunity Zones are designed “to complement existing community development programs while incorporating lessons learned from previous place-based efforts.”
There is no fixed cap on the amount of capital that can be channeled to target communities through the Opportunity Funds, nor is there a limit on the number of Opportunity Zones that can receive investments in any given year, officials said.
Each governor was allowed nominate up to 25 percent of a state’s low-income community census tracts to be designated as areas where the federal tax incentive would apply.
Low-income community census tracts are generally defined as places with poverty rates of at least 20 percent, or median family incomes no greater than 80 percent of the surrounding area.
Rauner’s office narrowed the 327 tracts in Illinois down from 1,305 statewide that qualified under the definition.
“Illinois is the epicenter of commerce in the Midwest and, as such, our people and our businesses are uniquely positioned to leverage the state’s assets into enterprise and job creation,” Rauner said.
The area included on Aurora’s East Side is bounded on the south by the Kane and Kendall county lines and on the east by the Kane and DuPage county lines.
The northern boundary runs along New York Street, then turns north at Ohio Street and runs to Lincoln Avenue. The western boundary runs along Lincoln to Benton Street, where it turns and runs two blocks to Fifth Street.
It then turns east on Seventh Avenue and runs to Union Street, where it turns north to Fifth Avenue. It runs east on Fifth to Hill Avenue, where it turns south and runs to Montgomery Road. At Montgomery, it turns back north a block to Melrose Avenue, then west to Douglas Street, where it turns north and runs to the border with Kendall County.
On the West Side, the one tract is bordered roughly by Illinois Avenue on the north, the Fox River on the east, Galena Boulevard on the south and Highland Avenue on the west.