New Partnership Will Pump $20M Into Economically Distressed Communities
The Richard King Mellon Foundation announced Wednesday that it will partner with a Boston-based investment firm to pump $20 million into economically distressed communities across Allegheny and Westmoreland counties.
The foundation is working with Arctaris Impact Investors to launch the Southwestern Pennsylvania Opportunity Zone program, targeting 68 eligible communities in the region. Opportunity zones are federal designated census tracts where developers can get tax breaks; the 2017 program is meant to spur private investment in low-income communities.
The Richard King Mellon Foundation is kicking in $4 million for the effort. Director Sam Reiman said the program benefits both investors and community members as investors.
“Our funding will help return some of that capital back to private investors as an incentive for them to participate,” Reiman said. “[We’re] interested in making sure that we’re improving the quality of life and having a meaningful impact in people's lives in these communities”
Reiman said the projects will be implemented over a 10-year period. Some community leaders are cautiously optimistic about the new funding.
Executive director of the Hazelwood Initiative, Sonya Tilghman, said she recognizes that her community needs investment. However, she wants to ensure that if Arctaris pursues projects in Hazelwood, the company’s values are truly aligned with the community’s.
“I am a bit of a skeptic about the opportunity [zone program] and whether it can be effective in a neighborhood like Hazelwood, and with backing from RKM I think we can figure that out,” she said. “We’re game to help, assuming it's a project that really benefits the community.”
While there are a number of opportunity zone projects underway in the region - in Wilkinsburg, Rankin, Braddock and McKees Rocks - there are not currently any in Hazelwood, where the massive development project at Hazelwood Green promises “a new model of economic development” in Pittsburgh.
Arctaris has made similar investments in other areas including Baltimore, Erie and Cleveland. Reiman said the firm will be working with communities to identify development projects. He said he is optimistic that the investments will positively impact the targeted neighborhoods.
“We truly want this to be catalytic in the way that it can get money to people that need it right now, help to build their businesses, to restore blighted property, and to have a meaningful impact on their neighbors,” he said.