The OZ Reporting Framework Here In Mesa > Let's Do It!

< OZones here in Mesa . . . there are 11 that qualify

"The Opportunity Zones policy was designed to benefit low-income communities, and the residents of those communities must have a voice in the process.

An impact framework must have clear and accessible avenues for communities to provide input."

- Federal Reserve Bank of New York, August 2018 

Let's be very clear why that citation from the New York Federal Reserve Bank is prominently featured here today.
Just two reasons:
1. John Williams is now the President of the NYFRB
2. John Williams knows Downtown Mesa
He was invited here by Terry Benelli, President/CEO of LISC Phoenix (Local Initiatives Support Corporation) for an on-site visit three years ago. Not much has changed on  ground-zero downtown since then, except for the TCAJA 2017 that created Opportunity Zones. OZONES for short or just OZ.
--------------------------------------------------------------------------------------------------------------------------

INPUT: Up on the rooftop at City Hall, we can see Mesa Mayor John Giles and ASU President Michael Crow making plans for new construction of one building and one renovation of an existing building - Price Tag: $100M, and all paid for by hikes in sales/use taxes.3rd person is unknown.
As the data make clear
Opportunity Zones are deeply distressed communities
Blogger Note: That's not the same as "vibrant and exciting"
Some investors - like John Giles and his closely-connected cohorts of friends-and-family in the Finance, Insurance, and Real Estate Industries are here for their own private wealth-creation: They snatched-up buying eight downtown commercial properties on Main Street before the end of December 2017 to gamble on rampant real estate speculation.
One is The Caliber Wealth Development Fund (scroll down to read more)

The Opportunity Zones Reporting Framework is a project of the U.S. Impact Investing Alliance and the Beeck Center for Social Impact + Innovation at Georgetown University.

http://www.impinvalliance.org
http://beeckcenter.georgetown.edu

Let's not skip down that Yellow Brick Road again off-to-see the wizard in that shining green city over the rainbow
The Economic Innovation Group (EIG) developed a Distressed Community Index to measure economic well-being across long-neglected low-income contiguous zip codes.
The data should demonstrate if Opportunity Zones are moving toward parity with better-off places
There is a huge need for more community engagement in understanding needs and ensuring that communities are poised to benefit from investment.

IN THE SPOTLIGHT HERE IN DOWNTOWN MESA

11 Feb 2019
Phoenix, Ariz. – CBRE announced today that the firm was awarded the exclusive leasing assignment for eight historic urban retail properties on Main Street in Mesa, Ariz., that consist of nearly 110,000 square feet. The properties were acquired in February 2018 by Caliber Wealth Development Fund, who plans to re-develop the buildings as part of the city of Mesa’s downtown revitalization plans. . .
This redevelopment is among several proposed and announced projects in downtown Mesa.
> In June 2018, the city of Mesa announced that ASU will add a new downtown Mesa campus to house its film, media and gaming programs, bringing an estimated 750 students to the area.
> Additionally, The Church of Jesus Christ of Latter-day Saints is undergoing a two-year renovation of its 75,000-square-foot Mesa temple and surrounding grounds. No financial deals, however, were ever disclosed from news reports in MormonLand. It was disclosed that For-Profit affiliates of The Church had been working with city official for years.

 _______________________________________________________________________________

What do we know?
Reference: https://medium.com/new-york-fed-framework
"One approach is to combine metrics that capture performance over time and across dimensions. Economic Innovation Group (EIG) developed a Distressed Community Index to measure economic well-being across zip codes. Kenan Fikri, Director of Research at EIG, noted that relative indices allow us to “control for what’s happening in the macro environment,” adding that the data should demonstrate if Opportunity Zones are moving toward parity with better-off places

Another approach is to create a detailed, data-driven profile for each low-income community.
This is the goal of Opportunity 360, a tool from Enterprise Community Partners that aggregates 200 data points to identify characteristics of opportunity by census tracts. Some states used this tool in deciding zone nominations. “What we’re exploring now is: how can we pivot and iterate on this data?

Participants also stressed that using data is only one lens of many for understanding needs.
Truly finding the opportunity in Opportunity Zones requires conversations with the community.
Kevin Boes, President and CEO of New Markets Support Corporation at the Local Initiatives Support Corporation (LISC), has toured designated zones to identify gaps and how investors can fill them.
Boes emphasized that “there is a huge need for more community engagement” in understanding needs and ensuring that communities are poised to benefit from investment.

The families living in these areas and community-based organizations serving them are in the best position to identify the needs, priorities, and opportunities to invest for strong community outcomes. But their engagement is not baked into the Opportunity Zones legislation, so it will fall to local leaders and private actors to create space for community voices in the market.

Establishing Evidence of Outcomes for Communities in Need

> Gathering baseline data on Opportunity Fund investments will allow policymakers, researchers, and community development practitioners to assess the short- and long-term impact of these flows of capital to underserved communities. Tracey Hsu, Director at Social Finance, pointed out the importance of having a shared understanding of what improvement looks like in a particular Opportunity Zone — not only to assess impact, but also to align this incentive with existing community development programs.

• > Nick Fritz, Senior Associate for Sorenson Impact, suggested that a best practice may be to establish “impact measurement” milestones at the five-, seven-, and 10-year marks
• tracking progress by reporting on specific yearly data points
• also recording and reporting on specific metrics each year.

These metrics could build off of transaction-level data (location of investments, investment size, type of project or enterprise, etc.) to determine alignment with community needs and with an Opportunity Fund’s investment thesis.

> In the same way that community voices will help to determine need, Opportunity Zone residents will also help to contextualize data on outcomes and raise awareness of unintended consequences.
“The great thing about the Opportunity Zones is that we are talking about place, but more importantly we are talking about people in place.
A bottom-up approach is where we start to win”, said Frank DiGiammarino, a Senior Fellow at the Beeck Center.

> DiGiammarino also highlighted the importance of transparency, saying, “investment tends to be a black box,” but openly discussing what investments are being made in Opportunity Zones will help ensure that the benefit is effective. And as early movers will shape the market, he urged participants to act swiftly and cautioned that “perfect is the enemy of the good”. Endlessly discussing the “right” data to gather may dampen the interest of investors from contributing to the development of the market place.

Existing Frameworks for Evaluating Impact with a View Toward Investor Demand

Participants discussed key considerations when developing tools that help funds and investors to quantify impact and maximize opportunities. This will also require collection of impact data from recipients of Opportunity Fund investments, which may include start-ups and other local businesses.

First, the development of these market-facing tools has been driven by investor demand. Institutional and high-net worth investors have become increasingly aware of the ways that their financial decisions can align with their values. Greater market transparency enables investors to better understand risk and opportunity, ultimately helping them to make better decisions and improve returns. Amanda Kizer, Director of Impact Management at B Lab, spoke specifically about “a frame of maximizing stakeholder value rather than viewing impact through the lens of compliance.”

Second, business owners are seeing the benefit of collecting and reporting data. “Impact occurs at the point where an enterprise touches the people in the community,” said Brian Trelstad, Partner at Bridges Fund Management and representing the Impact Management Project. Understanding impact as a business owner is fundamentally a matter of understanding your customers and your market. Learning to glean and interpret these insights also develops skills and expertise in entrepreneurial ventures, preparing them to succeed and grow.

But powerful as these benefits can be, participants in the roundtable underscored the need for flexibility.
Impact reporting should focus on data that is both material to impact goals and responsive in nature, allowing businesses to adapt if they aren’t meeting community needs.
 It should also be practical from the standpoint of collection, according to Paige Chapel, President and CEO of Aeris, who noted that “impact accountability and transparency shouldn’t serve as an undue burden to those Opportunity Fund managers who are explicitly and intentionally centered on community impact.”

Building the necessary environment to ensure effective reporting about investments in Opportunity Zones will take sustained effort, and a collaborative approach will help shape the market in these critical early stages.

Next Steps

The day-long meeting ended with a clear call to action: develop a shared understanding of how to measure impact in Opportunity Zones and how to help shape the nascent market for Opportunity Funds. A growing number of investors now acknowledge that incorporating impact metrics into their strategy can serve as an important risk management tool and produce better results.
How do we build consensus and the necessary community to enable that action?

First, the Opportunity Zones legislation should lead to the creation of a market where there really wasn’t one — investing in communities that have otherwise been overlooked. The hallmark of a healthy marketplace is transparency. Investors and communities need access to baseline, transactional data about Opportunity Zones to enable targeted investment. Transparency will also produce data to observe the effectiveness of this new incentive and demonstrate accountability.

Second, a framework for impact will require authentic community engagement. The Opportunity Zones policy was designed to benefit low-income communities, and the residents of those communities must have a voice in the process. An impact framework must have clear and accessible avenues for communities to provide input.

Further, we must expand the conversation. This first roundtable was meant to articulate the potential for a shared impact framework, understand the existing tools at our disposal, and establish the impetus to act. Carrying the conversation forward will require input from actors across this new market, weaving together the diverse expertise of each stakeholder — policy makers, academics, researchers, investors, wealth advisors, fund managers, businesses, and, of course, the communities themselves.

Finally, we need to be prepared to learn and grow over time. “This policy is in a state of becoming,” was a common refrain, underscoring the need to move swiftly to shape it for the highest community benefit.
But with the market developing at a heady pace, a lack of consensus regarding a successful impact framework cannot stand in the way. Rather, we should look at this as an opportunity to enable the flow of capital to the places most in need and also those most ready to use it.
_______________________________________________________________

Beeck Center

The Beeck Center mobilizes talent to drive social impact at scale by taking a systematic approach to delivering exponential outcomes that leverages the tools of data, technology, policy, and finance to improve people’s lives. The Beeck Center incubates and spreads cutting edge ideas; creates unique and unconventional networks of government, private and social sector leaders who come together through to solve complex problems; and equips and trains students, practitioners, and executives with the mindset and tools necessary to take action.

U.S. Impact Investing Alliance

The U.S. Impact Investing Alliance is a field-building organization committed to raising awareness of impact investing in the United States, fostering deployment of impact capital across asset classes, and working with stakeholders, including government, to help build the impact investing ecosystem. Its vision is to catalyze a movement that will transform finance by putting measurable social and environmental impact, alongside risk and financial return, at the core of investment decisions.

CoDeFi at the New York Fed

The New York Fed works within the Federal Reserve System and with other public- and private-sector institutions to foster the safety, soundness, and vitality of our economic and financial systems. The New York Fed’s Community Development Finance initiative (CoDeFi) helps community organizations, banks, and investors work together to increase the effectiveness of the community development investments in low- and moderate-income communities.

The views expressed in this post are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.

New York Fed content is subject to our Terms of Use.

New York Fed

We welcome engagement and discussion on the New York Fed’s Medium pages. We reserve the right to remove any profane, repetitive, commercial or off-topic comments or posts that are inconsistent with Medium’s Rules or Terms of Service.

Impact.

We are committed to evaluating and amplifying the long-term outcomes benefiting those living and working in Opportunity Zones today.

kkk