The Role of Universities and University Research Parks in Spurring Investment Capital in Underserved Communities: Opportunity Zones in the US: A Model To Emulate Globally?

Brian Darmody
University of Maryland


 
Kevin Byrne
The University Financing Foundation


 
Abstract
The Role of Universities and University Research Parks in Spurring Investment Capital in Underserved Communities: Opportunity Zones in the US: A Model To Emulate Globally?

Opportunity Zones (OZ) are a new community development program established by U.S. Congress in the 2017 Tax Cut and Jobs Act to encourage long-term investments in low-income urban and rural communities nationwide. Many of these zones are anchored by universities and university research park, from urban areas to rural areas where land grant universities are located. The Opportunity Zones program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing into Opportunity Zones designated by the chief executives of every U.S. state and territory. Investment in university start ups, new real estate including accelerators and co-working space and related investments is expected to be incentivized. US Treasury estimates over $100 Billion U.S. will be invested in these zones through this program. The Economic Innovation Group in the US estimates on $6 trillion in unrealized capital gains are sitting on the sidelines with non productive use.

The OZ funds will be managed largely independently and decide which investments to make, but states, jurisdictions and universities in the US are beginning to develop plans to attract OZ fund managers and many private equity funds, family offices and other investors to their communities, both from real estate perspective and equity investing in startup firms.

We will explore the implications of this new investment vehicle from a university-industry interaction perspective and compare and contrast with approaches in the EU and elsewhere using tax incentives How will OZ funds spur more university-industry collaboration? What can be done to avoid gentrification in these communities and insure inclusive investment? What are approaches in other countries? How are the incentives for building new infrastructure compared to incentives to invest in new companies? Since investments must be at least for 10 years to achieve the greatest benefit from tax standpoint, how will this affect investment in types of start ups, such as biotech companies?
Most of the attention in the US up to now has been focused on real estate investment that might be spurred, but attention is now moving towards how this program will help investment in start up firms and existing companies and additional regulatory advice from the US Treasury will be issued by the time of the workshop to help develop addition clarity for the program.

This workshop will be led by seasoned practitioners from US university and university research park organizations that are working on Opportunity Zones and we hope to include a representative from a EU research park to include commentary to EU approaches to spur investment in university related communities and university-industry interaction. We would ensure there was active participation by participants in the workshop.