By Louisville Mayor Greg Fischer
Our job at Metro Government is to make it possible for everyone in Louisville to have an opportunity to realize their full human potential – and a strong economy is critical to creating those opportunities.
There is much to celebrate on that front: Louisville’s recent economic boom has lifted more than 20,000 people out of poverty and opened the door for 17,000 families to join the middle class since 2014. Since 2011, we’ve worked together to create more than 80,000 new jobs and more than 2,700 new businesses. And in the last four years, our community has attracted over $13 billion of new capital investment for projects announced, underway or recently completed.
Our focus now is to build on that momentum to make sure everyone is along for the ride and the prosperity we’re experiencing reaches every home in every neighborhood.
As a former entrepreneur, I know one of the biggest challenges start-up businesses face is equitable access to capital. How do you get the investment you need to start or expand your business, renovate your building, and in the process revitalize your community?
As mayor, I’ve seen the challenges that we and cities across the country face, including: How do we attract private capital to boost the economy in historically underinvested neighborhoods, like those in West Louisville, and help the people who live in those neighborhoods reap the benefits?
I’m proud to say my team is already working on this challenge, and almost $1 billion of recent investment has been announced or is underway in West Louisville. That’s a great down payment on the overall need, and now, thanks to a law recently passed by Congress, we have a new tool to help attract further investment into areas in our city that need it most.
The Opportunity Zone tax incentive program allows anyone to take their capital gains (profit from investments) and reinvest them in a Qualified Opportunity Fund.
These Opportunity Funds can attract local and national investors and put their dollars to work, investing in businesses and real estate in specified census tracts that are ready to break out, after years of historic disinvestment. Louisville has 19 Opportunity Zone tracts, including downtown and edge neighborhoods like Russell, Portland, California, Park DuValle, Parkland, Shelby Park, Smoketown, SoBro, Nulu and Butchertown.
By investing in projects and opportunities in these designated areas, the investor can receive tax breaks, the business or development gets much-needed capital funding, and the city gets a boost in our revitalization efforts.
In addition, the law incentivizes patience with these investments – the tax break opportunities only begin at five years and are greatest for investments that remain with the fund for 10 years or more. This is not a program designed for flip-and-flee investment. This is for investors who can stick with it and see projects through to completion.
These Opportunity Funds could help neighborhood-focused small businesses, new housing developments throughout the city, and the Track on Ali multisports complex being developed by the Louisville Urban League in the Russell neighborhood.
These funds could help worthy projects that have struggled to gain traction finally get the boost they need to succeed.
We want responsible development and projects that benefit our citizens by providing investment without displacement. If we use any local incentives, we will look for Opportunity Funds projects that would make a social impact by hiring and partnering with local residents who can also benefit from any income and wealth that is created.
Metro Government has worked closely with community stakeholders and our state and federal government partners to ensure we are out front and best positioned to put these private dollars to work.
While the city doesn’t have its own Opportunity Fund, we are meeting with national and local investors to connect them to projects, and we’re communicating with local groups on how to take advantage of this opportunity. And we’re distributing our new Opportunity Zone Prospectus to investors to promote Louisville as a great place for their dollars.
We’re embracing the potential that Opportunity Zones offer our city, and we will use this tool and every resource we have to create more paths to prosperity for all our citizens.
You can review Metro Government’s Opportunity Zone Prospectus and learn more at the city’s website: louisvilleky.gov/government/louisville-forward/opportunity-zones-louisville.