How Cities Are Building Community Wealth through Opportunity Zones

WSP USA is identifying ways disadvantaged communities can capitalize on government incentives that encourage investments and boost their economic standing.

With traditionally overlooked or underserved states, cities and communities across the country seeking investment, local governments are leading the way to innovatively finance and support local investments.

One new investment tool capturing national attention is Opportunity Zones. It is an incentive that has galvanized conversation, and action, around investing in underinvested neighborhoods.

What Are Opportunity Zones?

The Federal Tax Cuts and Jobs Act of 2017 included a provision known as the Investing in Opportunity Act, which has encouraged investors to invest their capital gains into low income areas designated as Qualified Opportunity Zones (QOZs). Governors across the U.S. identified a total of 8,764 low-income census tracts as QOZs—encouraging property and small business investments in these areas by offering several possible tax advantages.

Capital gains investment into a real estate or operating business within a QOZ results in the following benefits:

  • Capital gains tax payment deferment until 2026;
  • Capital gain tax reduction of 10 percent after five years, and an additional five percent after seven years; and
  • Capital gain tax elimination on gains made within the fund, if held for 10 years.

This incentive has allowed municipalities to rethink their roles in economic development, uncover the wealth and assets already in their communities, and leverage the Opportunity Zone tax credit to encourage new ventures that can spark economic growth within struggling communities.



Opportunity Zones allow municipalities to uncover the wealth and assets in their struggling communities and encourage new ventures that can spark economic growth.

Accelerator Assistance

To help communities take advantage of this incentive at the local level, WSP USA has been working with Accelerator for America, a Los Angeles-based “do-tank” chaired by Los Angeles Mayor Eric Garcetti.

WSP recently collaborated with Accelerator for America to guide Waterloo, Iowa’s approach to Opportunity Zones. The firm led workshops with investors, project owners, entrepreneurs, Housing and Urban Development, Small Business Administration, city staff, foundations, and local engineering/architecture firms. This effort included informing stakeholders of the benefits of the Opportunity Zone tax incentive, defining priority projects for the community and determining what constituted success.

WSP also provided technical assistance by providing financial modeling for the community’s identified priority projects. This exercise connected project owners to potential investors by articulating the potential return on investments, as well as the added benefit of the tax incentive for projects located in Opportunity Zones.

The City of Waterloo sought local investors with the help of WSP, recognizing that these communities often have wealth locally, but are overlooking the benefits and future value of investing now in their own communities.

This presents an opportunity to rethink the paradigm of investing in communities across the country with benefits to both the investor and the people who live in those areas that are primed for economic growth. Opportunity Zones are making cities reconsider their role in economic development and best utilizing the assets they have.



Los Angeles Mayor Eric Garcetti, Accelerator for America CEO Rick Jacobs, WSP’s Andrew Petrisin and Waterloo Mayor Quentin Hart (from left to right) discuss Opportunity Zones at a recent forum held in Oklahoma City.

Community Wealth Building

Recently, at Accelerator for America’s advisory council meeting in Oklahoma City, I joined John Porcari, WSP’s president of Advisory Services, and Stuart Sunshine, director of state and local government affairs, to share first-hand case studies and strategies related to WSP’s approaches and successes in Opportunity Zone initiatives.

Those in attendance at the advisory council meeting included many of the country’s leading mayors and urban thinkers, including Los Angeles Mayor Garcetti, Waterloo Mayor Quentin Hart, Oklahoma City Mayor David Holt, Lansing Mayor Andy Schor, Chicago City Clerk Anna Valencia, Houston City Councilwoman Amanda Edwards, Philadelphia City Controller Rebecca Rhynhart, thought leader Bruce Katz, and venture capital investor Ross Baird.

The conversations at the advisory council meeting focused on the topic of “Community Wealth,” a reframing from what is traditionally entitled “Community Development.” This reframing focuses less on a top-down housing approach to community development, and more of a bottom-up approach focusing on community assets.

WSP contributed to this conversation by discussing ways in which communities are leveraging the Opportunity Zone tax benefit and otherwise supporting a new system of community wealth. The topics of conversation included:

  • Investment Prospectuses: Mapping out a community’s assets, anchor institutions, and projects for investment
  • Intentionality and Inclusivity: Building capacity and organization around managing and directing capital, and measuring its impacts
  • Financial and Technical Assistance: Supporting entrepreneurs with financial assistance to display their projects to potential investors
  • New Financing Vehicles: New mechanisms and structures for investment, including the neighborhood trust model
  • New Urban Institutions: Civic/private or public/private institutions that can manage and direct neighborhood investment such as Cincinnati Center City Development Corporation and Erie Downtown Development Corporation

These tools are the foundation for a new approach to community wealth building, and WSP is engaged and leading at the forefront of how communities will invest in themselves in the coming decades.



The City of Waterloo, Iowa recognized that communities often have wealth locally, but are overlooking the benefits and future value of investing now in their own communities.

Moving Ahead

WSP believes that cities are at a turning point for how economic development occurs at the local level. Opportunity Zone investments are part of this transition, but they do not encompass it in its totality. Intentional and inclusive wealth building that benefits residents as well as investors requires organization and capacity at the local level, in addition to connecting capital between and within these cities.

Our firm is excited to work with community leaders within these Opportunity Zones to discover ways to encourage investment and growth, and to help successfully build this future paradigm across the U.S.

Andrew Petrisin is an associate consultant for advisory services at WSP USA in Chicago. In addition to working with the City of Waterloo and other cities on their Opportunity Zone initiatives, Petrisin has collaborated with the San Francisco County Transportation Authority, Utah Transit Authority and the Maryland Transit Administration on transportation plans and evaluations.

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Andrew Petrisin
Associate Consultant for Advisory Services
United States