One hundred fifty census tracts throughout Louisiana have been qualified as Opportunity Zones, or low-income and underdeveloped neighborhoods now eligible for investment with reduced capital gains. The areas throughout the state are part of a larger group of 8,700 Opportunity Zones in the country.
According to Louisiana Economic Development, the primary attraction for investing in Opportunity Zones is deferring and lowering federal taxes on capital gains.
“This federal certification means we have new tools at our disposal to bring much-needed investment and new jobs to the areas of Louisiana who most need them,” said Louisiana Governor John Bel Edwards. “Through a collaboration of private investors, state agencies and local communities, we can work hand-in-hand to ensure that new opportunities for growth are created in Louisiana through this program.”
With any influx of investment there is the potential that investors could hinder, not help, the Louisiana Opportunity Zones. Marlos Nichols, co-founder and managing partner of Cross Culture Ventures, shared the five critical mistakes that investors need to avoid in these areas:
- AVOID GENTRIFICATION & “THE BODEGA EFFECT”
The startup ‘Bodega’ was pilloried last year for admittedly seeking to displace local workers, who are often people of color and/or immigrants. Hire local or work with community organizations who live in and know the ecosystem. They will help you assess if your project is right or wrong for the community.
- BUILD & HIRE LOCAL
By building local offices in these communities and hiring local talent, you will be injecting capital into the local economy, and further revitalize the area.
- ACCELERATE ENTREPRENEURS
Help develop the local business and tech ecosystem by partnering with the local government or organizations to create startup accelerators for local entrepreneurs.
- BUILD LOCAL WEALTH BY ADDRESSING THE SKILLS GAP
New industries won’t flourish if there’s no one to hire. Teaching local workers new skills through technology and business bootcamps, will revitalize an entire generation of workers and will help fill your jobs.
- HAVE EYES AND EARS ON THE GROUND
Employ a dedicated team tasked with protecting the community — a queue of local employees on call to make sure the community is safe and happy.
For more information on Louisiana Opportunity Zones, click here.