The Richard King Mellon Foundation is teaming with a Boston firm to invest $20 million in job initiatives and economic development in distressed communities in Allegheny and Westmoreland counties.
The foundation’s partnership with Arctaris Impact Investors will commit the funds to Opportunity Zones — federally-designated census tracts in low-income neighborhoods that are eligible for investment tax credits.
There are 68 such zones across 23 municipalities in Allegheny County and four zones in Westmoreland County.
The partnership — the Southwestern Pennsylvania Opportunity Zone Program — includes a $4 million commitment from the foundation and $16 million from Arctaris.
Sam Reiman, director of the Downtown-based foundation which is Pittsburgh’s largest philanthropy, said, “No specific deals are ready to go” but the partners will focus on initiatives that advance the fund’s mission of new employment and boosting small- to medium-sized businesses in opportunity zone communities.
Opportunity zones were created as part of the 2017 federal Tax Cuts and Jobs Act, and have drawn criticism for benefiting wealthy investors that receive tax breaks for large real estate projects in the zones.
“We didn’t want [this fund] to be solely about real estate development,” said Mr. Reiman.
“We wanted it to impact job creation and equip entrepreneurs with the tools they need to provide skills to their employees and new hires.”
When Congress passed the tax legislation that created the program, Mr. Reiman said the foundation worked with Pittsburgh Mayor Bill Peduto to have city neighborhoods Hazelwood and Homewood designated as opportunity zones.
The foundation has invested heavily in economic development and social services in both communities and has an ownership stake in Hazelwood Green, a former steelmaking site along the Monongahela River that is being redeveloped for business and recreation.
Ideally, the new opportunity zone fund would establish its office at Hazelwood Green, Mr. Reiman said.
Arctaris will hire someone to run the fund and Hazelwood Green would be “a great place … to meet entrepreneurs, real estate developers and small businesses,” he said.
Click here to read the full article by Joyce Gannon at the Pittsburgh Post-Gazette.