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llinois - Chicago - Greater Auburn Gresham Opportunity Zones 2020

Updated May 11, 2018
 

The State of Illinois is participating in the Opportunity Zone program, offered through the Tax Cuts and Job Act signed into law on December 22, 2017.

This new federal program encourages private investment in low-income communities by offering tax incentives for qualified investors, and state governments are responsible for making Opportunity Zone tract selections.

The City of Chicago has recommended to the State a total of 133 census tracts within the City limits, which is the pro-rata share of the City’s low-income census tracts across the entire state, as well the Michael Reese Hospital site.

Click on the map to the right to view an interactive version of the chosen Census tracts.

Federal certification of the State’s recommendations is expected in the coming months.

Legislation governing the Opportunity Zone program is linked below.

Census tracts for opportunity zones

Click to enlarge

Frequently Asked Questions

What is an Opportunity Zone?

According to the IRS, an Opportunity Zone is an economically-distressed community area where new investments may be eligible for preferential tax treatment. Community areas qualify as Opportunity Zones if they have been nominated by the state and certified by the U.S. Treasury. Opportunity Zones must be created within low-income communities as defined by Section 45D(e) of the Internal Revenue Code—census tracts with a poverty rate of at least 20 percent or where the median family income does not exceed 80 percent of statewide median income. A maximum of 25 percent of a state’s low-income census tracts may be designated as Opportunity Zones.

How did Chicago decide which areas to recommend as Opportunity Zones?

The City of Chicago recommended 133 census tracts — out of more than 500 eligible tracts in the City — to the State of Illinois for designation as Opportunity Zones, as well as two additional tracts that make up the former Michael Reese Hospital site. The selection of the 133 census tracts focuses on areas of the city in greatest need, using data from the 2011-2015 U.S. Census Bureau’s American Community Survey (ACS).  The City used the following factors to select the tracts:

  • Unemployment rate of 20 percent or more
  • Median family income of less than $38,000, which is approximately 50 percent of Area Median Income
  • Poverty rate of 30 percent or more

The City consulted with aldermen to confirm that the identified tracts within communities with these three qualifying factors were also the tracts that had the most investment potential. In certain limited instances, eligible tracts from within the same community in which economic development activity is underway or which eligible tracts are adjacent to a tract in which development is underway were strategically exchanged.

Additional Resources

  • Economic Innovation Group Opportunity Zones Fact Sheet (PDF)
  • Community Development Financial Institutions Fund Opportunity Zones Resources
  • Council of Development Finance Agencies Opportunity Zones Resources


    Department of Commerce and Economic Development
    Illinois Opportunity Zones

    Executive Order Information

    • Executive Order: Executive Order on Establishing the White House Opportunity and Revitalization Council (click here)
    • Event Video: President Donald Trump Participates in Signing Event for an Executive Order (click here)
    • Event Remarks: Remarks by President Trump at Signing of an Executive Order Establishing the White House Opportunity and Revitalization Council (click here)
    • News Article: NYT: Trump To Steer More Money To Opportunity Zones (click here)

    On October 19, 2018, the United States Department of the Treasury released draft guidance for Opportunity Funds and Opportunity Zone businesses. The links below provide the necessary guidance and resources for all key stakeholders.

  • Economic Development and Commerce (EDC) Committes Opportunity Zones Memo October 2018
  • Special Rules for Capital Gains Invested in Opportunity Zones
  • Opportunity Zone Presentations

  • State, Local and Federal Economic Development Assistance Programs Overview
  • Find Zones Near You

    Download the full list of Illinois Opportunity Zones (PDF)

    City of Chicago Opportunity Zone Tracts

    Opportunity Zone News

    Opportunity Zones press release

    What are Opportunity Zones?

    The Opportunity Zones program encourages long-term investment and job creation in low-income areas of the state, by allowing investors to re-invest unrealized capital gains in designated census tracts. On April 20, 2018, Governor Bruce Rauner submitted the allowable 327 of the 1,305 qualifying census tracts to the federal government for inclusion in the Opportunity Zone program.

    How were the Opportunity Zones chosen?

    Methodology and Data Used for Opportunity Zone Designations
    Based on the guidelines established in the Federal Tax Cuts and Jobs Act of 2017 - Section 1400Z-1, page 130, Goverrnor Rauner was eligible to nominate 25% (327) of the state’s 1,305 qualifying low-income census tracts as Opportunity Zones. Governor Rauner, with feedback from many stakeholders, including local units of government, Economic Development Organizations, Chambers of Commerce and community organizations, engaged in a 3-phase approach to identify and nominate the 327 Opportunity Zones that will have the greatest economic impact on the state’s most needy citizens.

    The Opportunity Zone 3-Phase Methodology:

    Phase 1: Need-Based Indexing

    One of the strongest predictors of an area’s potential for future growth is existing poverty. Areas with high rates of poverty and unemployment often have structural assets that are under-utilized. Governor Rauner’s need-based model incorporated criteria that aligns human capital under-utilization, social needs of low-income communities and economic growth opportunities.

    In order to most effectively utilize Opportunity Zone designations to activate Illinois’ under-leveraged resources, qualifying tracts were examined according to the following criteria:

    1. Poverty Rates
    2. Unemployment Rates
    3. Total Number of Children in Poverty
    4. Violent Crime Rate
    5. Population

    Phase 2: Equitable Distribution

    In order to ensure a statewide beneficial impact, Governor Rauner used a geographical distribution method:

    • Provided each of the 88 counties at least one zone that ranks highest on needs-based index
    • Limited each town/city to no more than 5 zones - outside the City of Chicago

    Phase 3: Local Consideration

    Governor Rauner’s administration received requests and suggestions from government and community entities throughout Illinois. Each was reviewed and helped informed the need-based criteria, statewide distribution and final tract selections.

    The following data sources and geographic attributes were considered in establishing the designated tracts:

    • Qualified Census Tract (QCT) designations: Qualifying Opportunity Zones were evaluated by existing and/or previous projects receiving incentives under Federal or State grant programs, tax credit programs, TIF districts and/or if they are in an Enterprise Zone.
    • Dunn and Bradstreet business listings: These are used to delineate different types of business activity, including manufacturing concentrations (automotive, agricultural, and other industrial activity, retail and commercial centers, and other such nodes).
    • Natural and/or man-made amenities (Port Districts/Lakes): Tracts with these attributes (which include lake/river frontage) are generally attractive for investments and entrepreneurial activity.
    • Existing Infrastructure: Tracts with existing infrastructure (i.e. empty buildings) can be used to build from rather than necessitating new construction. In more rural areas existing infrastructure is important as building materials for new construction can be difficult to procure.
    • Crime Rates: Tracts located in one or more of the higher crime statistics categories were evaluated in conjunction with the above criteria. Crime statistics included a total crime index, as well as the individual assault, burglary, larceny, motor vehicle theft, murder, persona crime, property crime, rape and robbery indexes.
    • Investment Longevity: Are the qualifying tracts going to spur long-term investment not just in the ten years for the program, but for the 20 and 30 years beyond?
    • Equity and Inclusion: Will economic development provide benefits to all economic levels in the qualifying census tract(s)?

     

    More Information and Resources

    The United States Department of Treasury and the Internal Revenue Service have not completed their rulemaking on the Opportunity Zone program at this time. The below information will provide more details on the program.

    For specific questions regarding the individual Opportunity Zones, please contact the local municipality in the census tract(s).

    Opportunity Zones Contact Information

    For more information about the Opportunity Zone program, please contact us at opportunityzones@illinois.g

Keywords: DECO, Illinois, Opportunity Zone

Posted in Local Businesses, Auburn Gresham in the News, Community Highlights

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