Leveraging OZs For Urban Revitalization, With Sherri Franklin & Delores Brown

The Opportunity Zones tax policy can be utilized as a tool to help revitalize urban neighborhoods. But getting the local communities involved can often be a challenge.

Sherri Franklin, founder and CEO of Urban Design Center, and Delores Brown, CEO of Community Economic Development Corporation, join the show to discuss how they are working with investors and local residents to catalyze revitalization of urban communities in Los Angeles and Long Beach.

Watch On YouTube

Episode Highlights

  • Background on Sherri’s commitment to community economic development, and the importance of educating stakeholders on how to create revitalization in their own communities.
  • Why a P3 model (public-private partnerships) and looking for unlikely partners to participate in fulfilling the vision of resiliency in communities is so often the key to success with urban development projects.
  • How Opportunity Zones, New Markets Tax Credits, and other tax incentives invite investors into neighborhoods to help reimagine communities.
  • How Opportunity Zones specifically have helped unlocked additional private capital flow into underserved communities in need of revitalization, and why investors can use the OZ incentive to invest in thriving communities that can generate a good rate of return on investment.
  • The big OZ challenge of removing the myth of what is classified as an “underserved community.”
  • The importance of community engagement and participation in the ownership of OZ projects.
  • Visual walkthroughs of two Opportunity Zone projects in development — The Shedrick in Los Angeles, and The Village in Long Beach, both of which are transit-oriented developments with early community engagement.
  • Other Opportunity Zone projects in Fort Pierce, FL; Fresno, CA; Detroit, MI; and Los Angeles.
  • The biggest challenges to working within the Opportunity Zones framework, and the opportunities that arise from such challenges.
  • How the Opportunity Zone policy is delivering positive impact, countering some of the criticisms of the program.

Today’s Guests: Sherri Franklin & Delores Brown

Sherri Franklin and Delores Brown on the Opportunity Zones Podcast

About The Opportunity Zones Podcast

Hosted by OpportunityDb.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.

Listen Now

Show Transcript

Jimmy: Welcome to the “Opportunity Zones Podcast.” I’m Jimmy Atkinson. On today’s show, we’re gonna be discussing how we can leverage Opportunity Zones for urban revitalization. I’m joined today by Sherri Franklin and Delores Brown. Sherri Franklin is founder and CEO of Urban Design Center, and Delores is CEO of Community Economic Development Corporation. Both these women are deserving of some better intros than that, so lemme tell you a little bit more about them before I bring them in. Sherri’s firm, Urban Design Center, helps to manage affordable workforce and mixed-income housing, infrastructure improvement, economic development, and enterprise expansion product. Sherri has decades of community development experience in Los Angeles. She served as vice chair on the City of Los Angeles Board of Zoning Appeals under Mayor Tom Bradley in the early 1990s. She was subsequently appointed by Bradley’s successor, Mayor Richard Riordan, to the Department of Transportation Commission and later to the L.A. Housing Department Rent Stabilization Commission.

She’s been a licensed real estate professional since 1989 and a real estate broker since 1997. UDC and Delores’s Group, CEDC, have partnered to create the Affordable Housing Recapture Initiative to facilitate the acquisition and greenbuild renovation of residential properties in Opportunity Zones to accommodate community reinvestment by legacy investors, provide affordable housing for special needs populations, and to catalyze workforce housing ownership. Now, in addition to her role as CEO of CEDC, our other guest today, Delores, is also chairperson of the New Markets Tax Credits program for Clearinghouse CDFI and also serves as their Opportunity Zone partner. I’m very pleased to be joined by both of you today. You come fully credentialed with a lot of experience. Sherri’s joining us today from Los Angeles, California. Delores is normally based in Los Angeles, but today joins us from the road in Lewisville, North Carolina. Sherri, Delores, welcome to the show. Thank you for being here with me today.

Sherri: Thank you, Jimmy.

Delores: Thank you for having us.

Jimmy: Absolutely. So, let’s dive in. Sherri, let’s start us off with you. Sherri, can you tell us about Urban Design Center, who is Urban Design Center? What does your organization do exactly? And who are some of your clients?

Sherri: Okay. Thank you, Jimmy, for having us today. So, Urban Design Center’s been activated in communities for over 30 years. I started in the institutional field back in the late ’80s, working to sell and identify projects for Japanese trust funds. And it’s a long story how I got here, but I committed my life to community academic development in the ’90s, working with Concerned Citizens of South Central Los Angeles. They courted me to come and help them put together their division of housing. They were a new organization that had fought a waste burn incinerator here in South Los Angeles and made the city lose over $500 million in bond money because they canceled it over a conditional use permit. And then they wanted to rebuild. They said, “Let’s build.” They had negative 5 cents in their account at the time.

So, I helped them capitalize by creating affordable housing through Low-Income Housing Tax Credit applications, going after money from the state, going after money from the city. And we were able to build several hundred units together in the early ’90s. I also served as a consultant for the Center for Community Change out of D.C. where I went from community to community, helping train people how to empower themselves and build their communities, build housing, access dollars, be able to make sure that your community is being built as you envision it to be built and to become the stakeholder in charge of that community planning and land use entitlement programs. And then we worked with other organizations across the city. We were a consultant for the City of Los Angeles Redevelopment Agency for many years.

We were able to, for instance, get the city $14.7 million to create a five-mile-long infrastructure program for Crenshaw Boulevard, which is now also furthering with a group called Destination Crenshaw, to make it an outdoor environment where we can build more quality housing and development. I am a consultant to several projects, such as the Stocker Street Creative, which is also in an OZ zone. It’s a brand new production studio being built in the foothills of Fallen Hills here in South Los Angeles. It’s 130,000 square feet acquisition and development project where we’re new construction, and we are building 50,000 square feet of production studios in an office space to create a new economy in our community for the creative industries that are here and the entrepreneurs that are here. So, they have a place where they can create.

And then as we’ll talk about, I’m developing my own projects. I have the Shedrick on Crenshaw right there at Destination Crenshaw, where we are building housing, a hotel, as well as commercial space to activate all the visitors who will visit both Destination Crenshaw and Leimert Park Village. And we are consultants to other clients like Innovative Housing Opportunities, helping them structure their opportunities to raise money for their housing developments. They’ve built large-scale housing developments. But also Delores and I are working with other entities like Blind Children’s Center, which is a center that has one of the original buildings built by Paul Williams. And we’re gonna historically renovate that project to make it a wonderful place for the children who attend the school. And there’s so many other projects, I won’t share them all, but we’re across all many different verticals, housing, economic development, special needs projects, facilities, economic development.

One of the projects we did with Concerned Citizens is helped them develop and envision the development of a shopping center, which is one of the most successful shopping centers now in South Los Angeles. It’s called the we need to take Marketplace after the founder of Concerned Citizens. So, we work to find the money, and that’s why we’re here today, just to make sure that we are educating people on all the sources they can pursue to build their own communities and to have them as legacy ownership within the communities.

Jimmy: No, it’s tremendous, Sherri. Thanks for joining us today. And yeah, you clearly have a lot going on in terms of economic revitalization, urban revitalization with Opportunity Zones specifically. We’ll talk more about that Shedrick project a little bit later in the show. But I wanna bring Delores in now. Delores, you’re collaborating with Sherri on a variety of projects. Question to you is, how do you think of economic development strategies in urban communities, and how does your group supplement what Sherri’s working on?

Delores: Okay. So, thank you so much for allowing me to participate. I think one of the glaring requirements is looking at these projects from, I call it a P20 model, and that that’s a private-public partnership relationships and looking for unlikely partners to participate in fulfilling the vision of resiliency of communities. And so, in looking at resiliency of communities, the Opportunity Zones, New Markets Tax Credits, all types of incentives that invite investors into neighborhoods who have a wealth of opportunity, when you were talking about economic development, when you’re talking about the ability to redesign and reimagine communities in reference to housing and housing development. And they are communities that have stakeholders who are committed to longevity. You know, you look at that, most of these communities have third, fourth, and fifth generations of families that have lived there, that have committed to that particular environment and want to be part of the growth and the reimagining of the communities that are happening around them.

So, that is one of the reasons and the rationales for the collaborations and the partnerships and, you know, the deeper dive of the work that Sherri and I have done, you know, for probably the last 38 years. I made the four-way into this area because I was a banker for many, many years, very concerned about redlining and having the opportunity for communities to look at the ability to thrive. And so, I made the leap. I always laugh and say that I think about that, you know, in the financial world, you know, I had to figure out what did that look like before I continued to think about giving away the store. That’s not what the financial industry is about. So, I moved over to, you know, the social impact side of, you know, bridging the relationships and really focused then on, one of the greatest challenges was that there was very little access to capital for communities. And so, I, you know, really brought my expertise to the table to bridge the gap between showing community organizations and community residents how to get their financials in order, to be the bridge builder in order for lending to take place in communities.

Jimmy: Excellent. Excellent. Well, we’ll dive into a lot of those talking points throughout our discussion today, but Sherri, back to you. How does the Opportunity Zone tax policy pair with UDC’s mission? How has it affected what you’re doing in positive ways?

Sherri: So, you know, whenever there is a new idea for how do we create reinvestment in our communities, I think Delores and I have been on the forefront of every single one of those concepts over the past 30 years, whether it was Low-Income Housing Tax Credit, New Markets Tax Credits, EB-5 and, you know, creating empowerment zones. We actually wrote the application for the City of Los Angeles for their empowerment zone back in the ’90s after the civil disturbance. And that was all about how do you figure out to bring capital to our communities, educate the investors that this is a great place to put your dollars, and to do it with the people who are here, who are educated and understand real estate and understand development. So, the OZ’s opportunities are just another layer of our efforts to do that.

We are wanting to make sure that something that seems very complex, you know, is made understandable to people who actually have the dollars for reinvestment. And this…the OZ is a little bit different than many of the other source funds that we’ve worked with because New Markets Tax Credits and Low-Income Housing Tax Credit are only for institutionals. Those are the people who can invest, but OZ is different. And we live here in Los Angeles and in many of the communities and some of the wealthiest African American communities in the country. And there are people who have assets that they sell, and what do they do with it? If you own a four-unit building and you wanna sell that building, you can either put it in 1031 or you can put it into one of those Delaware Trust type of entities.

But what if there’s nothing available? Many people lose their opportunity to save on their tax benefit because there’s nothing else to reinvest in, or they have to leave the community. And what we want to do is align our expertise to create projects that we’ve done and be able to pull those resources from legacy investors in our community so they can reinvest and be proud of what they own, can walk to what they own. And it totally aligns with what we’re doing, because that’s what our mission is, is to revitalize communities, to create legacy ownership, and to make sure that people are proud of where they live. Those are our basic missions.

Jimmy: And that’s a great mission to adhere to. Delores, anything to add there? I noted a moment ago that you mentioned that, you know, you’re working in communities where you’ve had trouble accessing capital. How has this Opportunity Zone Initiative helped unlock some additional private capital to flow into these underserved communities? I know it’s still early, but have you seen any success with Opportunity Zones in that regard?

Delores: Absolutely, because it allowed each jurisdiction to really rethink what it looked at as underserved communities. And as you look at the Opportunity Zone maps, most of the outlining areas are in thriving areas, but they are areas that have not necessarily been exposed to the investor environment. And so, being able to create the opportunity to share the richness of a community and not necessarily…I think that most scenarios that were originally developed around the Opportunity Zone coined it from looking from depressed communities, and that’s not necessarily so. So, really being able to help that investor really look at the richness of the communities and also look at that forward. You know, we know that everything is based upon rate of return on investment. And so, with that said, there are thriving communities that have already got a great rate of return, they were just undiscovered communities. And so, we make sure that we create the lens on that community, but we also make sure that our community benefits, you know, that’s that P3 relationship, right, that our community benefits from bringing in the capital that is so unnecessarily needed for those particular communities.

Jimmy: Absolutely. So, Delores, back to you again here now. Opportunity Zones, my listeners, my viewers of this podcast clearly are familiar with how much I love the program and how I think it’s a great program and I talk about it constantly over the last four years. It really is a terrific tax incentive for investors, and it’s also a terrific tool for community development. But that said, it’s still relatively new, there’s some hurdles. What are some challenges that you have seen particularly in terms of getting investors educated or maybe any other challenges that you’ve run into here over the last few years, Delores?

Delores: Again, the challenge is removing the myth of what is classified as an underserved community, right, and really bringing that educational component. You know, as Sherri shared that, you know, when we look at the OZ outlining areas for Los Angeles, you would think that this would be classified as underserved communities. A great example would be, you know, one of the projects that we’ll talk about later, but our project that is listed in the City of Long Beach. This project is in the middle of resiliency in downtown Long Beach, but it’s classified as an Opportunity Zone. So, it’s really being able to bring and add the educational component for everybody to have… You know, I think when new opportunities avail, we lose time because there’s no breaking down kind of the language barrier to really look at how does it apply to actually bringing a transaction to fruition. So, I think that that is one of the key barriers, is breaking it down in layman’s terms so that people, the investor can find the transaction and then the community can understand what would be, you know, the cost-benefit analysis for it to participate in the transaction.

Jimmy: And do you get pushback from the communities sometimes for certain projects, or are they welcoming, or what are some of the stories that you’ve heard from the communities?

Delores: Oh my goodness. So, one of the clear things that…and I think that’s our secret sauce that allows us to be able to go in, because we understand that you do have to go in and to do that community engagement in any aspect of being able to do any of your projects. You have to let the community participate in the ownership, even if they’re not participating in the ownership, because this is gonna be a project that they’re gonna live and breathe and see and pass daily, and you want them to be kind of the word of the mouth on the street level that says, “Oh my goodness, that’s an amazing project.” Because they can share that they were part of the ability to even kind of look at the initial design review process, right, of being able to talk about how does this impact traffic of me being able to get out of my driveway. You know, what is the real impact of this new building that’s going on? So, that community engagement piece is crucial in order to really make a project have the ability to not have what we call nimbyism, you know, within our particular communities.

Jimmy: Good. Well, I wanna turn back to Sherri now. We talked about community aspect of the Opportunity Zone Initiative. What about the investors themselves? I’m curious, who are the typical investors that you’re working with, and what are some of the challenges that you have to work through with them and some of the points you have to bring up with them when you are talking about making an investment into Opportunity Zone deals?

Sherri: Yes. So, as Delores was mentioning, our communities are very complex, and that’s why we have to help make sure people understand it. So, to describe what Delores was talking about, we have Opportunity Zones on Crenshaw Boulevard where we have a project, the Shedrick, and it’s a narrow strip. But on either side of that strip, we have the wealthiest African American communities in the country. And that’s why lenders can’t see the opportunity. They’ll see, you know, what the OZ zones say about them as depressed, but then that’s a strip. But who are the people who are gonna visit that strip? The people surrounding that property, and that’s the type of dynamic that we are helping investors understand. And also, the investors from our communities are many people who have units, 1, 10, 20-unit buildings. They sell those buildings.

They live right around the corner from us. What do they do with that capital once they sold it instead of just losing it because they don’t have a place to reinvest it at the moment and not be able to benefit from not paying capital gains? So, what we are doing is educating those legacy investors, that’s why we call them, people from the communities, on, what is an OZ zone? How do you reinvest? You’re gonna be part of a larger partnership, what does that mean? When do you get your money out? How does this thing work? Why does it benefit you? And giving building trust within the development, this is what we’ve done before, this is how long it’s gonna take, this is the kind of return you can expect. There is no one essentially on the ground talking to that legacy investor. All of the OZ zones are talking to institutionals, talking to people who are almost always considered accredited investors.

But there may be some people who are not. So, there are structures because of the Obama Jobs Act, for instance, you can do a reg 506(b) and be able to have some unaccredited investors, even though they have this property, they may not be listed as an accredited investor, once they sell, maybe they will be. But we are working to educate those investors to make sure that they don’t lose their wonderful opportunity and then they can retain that tax base like others have an opportunity to do, and we are creating projects to do that.

Jimmy: Fantastic. Well, I wanted to transition now and actually talk about two concrete examples to Opportunity Zone projects that the two of you are collaborating on. And I know you have many others in the works, and maybe we’ll touch on a couple of those as well. But the Shedrick in South Los Angeles on Crenshaw Boulevard, as you mentioned, and then we’ll also talk about a Long Beach project that the two of you are collaborating on. But let’s do the Shedrick first. And I’m gonna just gonna turn my attention to my other monitor here because I have this screen share that I’m gonna share with everybody if I can pull it up. And this is the Shedrick we’re doing here first, I believe.

And so, by the way, if you are listening to us on a podcast listening service, if you’re on iTunes or Apple Podcasts or listening to the audio-only version on Spotify, we do have a video version of this podcast as I’ve been talking about for the past few weeks. You head over to YouTube and find us there, and you’ll be able to actually see and follow along with what we’re showing you. This is gonna be more visual for the next few minutes. And I don’t know which one of you two wanted to walk us through the Shedrick, but I’ve got up on the screen now, so feel free and let me know when you need me to page over to the next few pages here.

Sherri: Okay. Thank you, Jimmy. So, we’re very excited about this project. It’s named the Shedrick in honor of a legacy family here in South Los Angeles. They’re selling their parcels of land to us, and we are building on this site on Crenshaw Boulevard and 49th, right in the Destination Crenshaw area. The zone where they’re building one of the largest African American outdoor art museums in the country are probably the largest. It’ll have commercial on the bottom, very active retail on the bottom cafe. It’ll have a production house cafe where people can come and be creative in partnership with the Stocker Street Creative project. I shared with you the over a hundred million dollar production studio that Delores and I are consultants for here right around the corner from the Shedrick. And that will be a place where people can create all kinds of wonderful movies for Netflix or any other streaming service.

It will also have commercial kitchens on the bottom floor so that we can feed into the potential hotel on the top floors as well as create a delivery service. There’s a great need here in South Los Angeles for direct-to-consumer delivery of prepared food. So, we have two floors of residential housing, which will be 40% affordable for transition-age youth. We’re partnering with Sanctuary of Hope. They work with emancipated youth and they will live in this housing development work. And all of the social enterprise businesses on the bottom floor will have a sidewalk cafe kind of Miami style. One of the other things that Delores and I did was work with the City of Los Angeles to garner $14.7 million from the State of California to build out the sidewalks because the train now is complete along the corridor.

So, the K Line is now open. And so, that widening of the sidewalks and planting trees allowed us to activate a beautiful cafe on the street there. And then we will have the second two floors, we’re building it out as either home ownership units or hotel. So, we are still doing the feasibility analysis of that to determine, but the units are designed so that they can be either or, but we are still working to see if we can attract and have a hotel. But if not, it’ll be a cooperative home ownership for people to buy into. We have lots of people who have large-scale homes here in South Los Angeles, and they need a beautiful place to go and there’s no place for them to go. So, we wanted to create that opportunity.

If you scale to the next page, you’ll see that the bottom floor is open. We’re actually…the pink space is gonna be created as a space for events. We can actually have a rolling drink there. The back garden area will be green space for growing vegetables and foods, and we’ll be able to do dinner parties there and so forth and also have the open cafe out to the street. The second level, we’ll have a multi-purpose room, which will also double as a screening room because our Stocker Street Creative project’s gonna need a lot of creative space that becomes part of the economy that we’re growing here with this studio. So, we’re very excited to be able to have really great, you know, maybe virtual reality kind of experiences in that space.

If you scroll to the next slide, it just shows that we’re gonna have residential and then we’ll also then have the homeownership or the hotel. And then the last slide shows you that on that fifth floor, we’re gonna have open space, which working really hard to design a pool on the fifth floor. And then there’s the rooftop deck, which is fabulous because it’ll have panoramic views of downtown Los Angeles all the way to Hollywood. And we’ll be able to activate really cool soirees and parties on that rooftop deck and have food service from the commercial kitchens at the bottom. We are working with CDC with Delores because she’s creating the affordable Housing Recapture Initiative which is a OZ fund. And that fund is going to be able to invest into this project to manage those affordable housing that we talked about for the transition-age youth and for families. It’s gonna be for people who are at or below 80% of area median income.

And so we’re very excited about this project and we’ll continue to share more details about it. This is just a yield study to let us know the maximum capacity of what we can build on the site. So, now we’re working with the community. As Delores mentioned, we don’t do anything without talking to the community, the neighborhood council, other organizations let’s say, so we can ask them, “What do you envision? What would you like to see?” Our deco is very much a dominant design here in South Los Angeles, so we’re looking at something along the lines of a streamlined our deco design.

Jimmy: Very good. Very good. Well, that was great. That was the Shedrick. Is that all you had on that? Should we move over to the Long Beach project now?

Sherri: Yeah, there’s more, but I don’t wanna… Yes.

Jimmy: Okay. So, let me pull up the Long Beach design now and then I think it’s just that one rendering, and you can kind of walk us through that one here.

Sherri: Jimmy, I should mention that our architect for the Shedrick is FSY, and FSY is a wonderful company. I work with them on their project for the Vision Theater, which is in Leimert Park. They did the design there, and they do a lot of housing in our community for what we call Transit-Oriented Communities. And the Shedrick is a TLC project where you get greater density and bonuses for building next to a rail line, and that’s one of the public policies that we’ve advocated for here in Los Angeles.

Jimmy: No, that’s terrific. That’s terrific. I love Transit-Oriented design, Transit-Oriented Communities. So, let’s move along now to the Long Beach Project. This is on…what was the corner it was on? It was on Pine and…

Delores: So, this is between 7th and 8th and Pine and Pacific in the middle of downtown Long Beach. We are so excited about this project. This project is almost, what we call The Village that is connected to the legacy of the preexisting building which is 17 stories, which is a senior housing project that was done by a legacy family that had envisioned, futuristically, if they were ever making a decision to sell to anyone, someone had to have the vision to incorporate two new towers that kind of fit the vision of community development next to it. And so, this site was not for sale. This was a project that we created a collaborative relationship with. It took us about a year before I was able to be taken to the top of the 17th floor and given the view and actually saying that the family was comfortable that we could be the actual recipients of being able to acquire the site.

So, very, very excited about this. This is going to be a mixed-use project that will focus its transit-oriented development. It is focused along the transit-oriented line that leads from Long Beach to downtown Los Angeles. The project is…because it is in an Opportunity Zone, we looked again as we started doing our community’s needs assessment for this project, looked at what were the gaps. So, it is going to be, 106 units of it will be economic development workforce housing, specifically with an aligned partnership with Cal State Long Beach to look at the opportunities of being able to create housing opportunities for the employees and professors of Cal State Long Beach. That project will focus on the affordability index between 80% and 120% of median income. And then our second tower, which is our nine stories, will be 86 units of market-rate housing.

And that is the component that we’ll be utilizing for our Opportunity Zone perspective. The project total costs for development is $158 million. We are in the entitlement process of the project as we speak, and again, in the process now as we have created our renderings and our preliminary footprint and schematics, we are now engaging the neighborhood. Because this is in the middle of downtown Long Beach, the emphasis would be for the business improvement district in that that Long Beach wants to focus in on live-work-play space along transit-oriented development. So, we wanna make sure that as we move forward in the design process, that we are complementary to our neighbors and also make sure that because we are sitting in the middle of downtown Long Beach, that we incorporate a tax base at the end incentive for the city as we move forward. So, we’re very, very excited about this project. We are looking that we will have the ability on the affordable housing side of the ledger. Our goal is to be able to turn dirt in October of 2023, so we are moving along very aggressively. And we are in the process of looking to continue to secure our Opportunity Zone investor on the 86 units.

Jimmy: Fantastic. Well, terrific. That was the Long Beach project, and we heard about the Shedrick in the Crenshaw corridor of South L.A. just a moment ago as well. So, both of those projects are doing a couple of things. One, they’re adding more housing to these communities where housing is desperately needed. We’re in a huge housing shortage all across our nation, and particularly in these markets. Two, it’s incorporating some affordable housing, below-market-rate housing, workforce housing, some combination of those. And three, it’s bringing in the community and the community’s involvement, which I think is tremendous. It’s the epitome of a well-done Opportunity Zone project as far as I can tell right off the bat here. So, I think it’s great both those projects, and congrats to both you on pursuing both of them and getting the community involved as well. Now, Delores, I think you also have some other projects that you wanted to touch on briefly, some Opportunity Zone projects that you’re working on in Florida and in Fresno, California. What can you tell us about those briefly?

Delores: Yes. So, in Florida, we are working in Fort Pierce focusing on, again, I think our traditional model is bringing unlikely partners to the table to think outside the box, right? And so, with that said, we have incorporated bringing together the faith-based community, the college district, and also performing arts to rethink land that is available that is owned by the faith-based community. And so, we’re going to be developing 54 units of housing, a wellness center that will incorporate the local community college, and also focusing in on being able…because it is in the middle of Florida, thinking about an adaptable reuse of one of the wellness center as a shelter in place. So, we’re actually partnering with FEMA to actually think outside the box of that project. It will have all kinds of economic development drivers within that project. And so, we are in the actual design phase of that project as well.

In Fresno, oh my goodness, we are so excited about this project. This project is on 121-acre aspect of a master plan community where, again, thinking about our private-public partnership relationships. It has…going to have 126 units of single-family homes, 297 units of multi-family, a partnership with the city to create a park within it, a partnership with the local college, which that local college is 90% complete of creating a community college. And also in the position of bringing elementary school in the middle of Fresno, and it’s also located along transit-oriented development that really looks at the repurposing of what would’ve been classified as agricultural land to now being in a position to actually develop this thriving community that will also have a regional shopping center and a community shopping center attached to it. So, very excited and that is in the middle of an Opportunity Zone project.

Jimmy: Tremendous. So, a lot you’ve got working on. Sherri, back to you now. I understand you may have some other OZ project in your pipeline as well, particularly some multifamily in Detroit. Did you wanna touch on that briefly for us and tell us what you’re working on there and why you like Detroit?

Sherri: Yes. Well, mentioned Detroit and then also the Affordable Housing Recapture Initiative that Delores and I have put together. We’re putting together that fund because many of our zones here in Los Angeles are in residential communities. We have to have a conversation with our politicals about that, but they are covering a large scale of residential. And we also have a housing shortage, as you probably hear in the news. So, we are working to acquire properties that have an ability to build added units, ADUs, or one to four more units in the back of the homes, renovate those homes, and make them sustainable and available for these legacy investors to reinvest in. They wouldn’t normally do it because much of our housing stock is old, it could be as much as a hundred years old. And because it’s older housing stock, it’s hard to renovate it. Some of them are in historic overlay zones, and so they’re going, you know, underutilized because of that.

Well, we can bring our development expertise and our understanding of historic properties, our understanding of renovation and rehab and merging other supportive resources to the table, bringing other resources to the table to be able to save these properties, prevent them from being demolished and created as larger scale residential and maintaining the fabric of these workforce communities. So, that’s one of the exciting things that we’re doing. We’ve identified a two-pilot projects that we’re gonna pursue, and we’ll be glad to share those with everybody. Detroit is very interesting. I’m in Detroit with my partner Mark Major. He has house tour and I met Mark and he’s like, “Sherri, Detroit needs help.”

And then just to give a sample, and I don’t know if people may be familiar, but I was not. Detroit was the wealthiest city in America at some point, but now it has lost more than half of its population for many reasons. And not only that, if you just imagine the city, 90,000 parcels of the land in the City of Detroit are owned by the City of Detroit. So, they’ve taken those properties, they’ve demolished properties, they’ve demolished schools, and so you’ll have blocks with just one house on it, blocks with two houses that are dilapidated. And Mark and I have two part properties in Detroit that we’re working to renovate and we want to work with the City of Detroit to acquire land and then rebuild. And what we discovered when we went door-to-door to talk to the residents, because we always start with community about, what do they want to see happen?

They all said the same thing, “We wanna build, we’re not leaving.” “But you’re the only person on this block, you know.” “I don’t care, I’m gonna stay here. I need help, I need tools, I need resources. You know, I want my son or daughter to come back and live with me and my community, but there’s no place for them to live because everything’s been torn down.” And that was one of the most touching experiences I’ve ever had, to be hugged by someone you don’t know. They just walk out of their house and they say, “Thank you.” And it’s a lack of information that’s available. The city is getting back on its feet. It’s lenders have just completely left the community, but if we bring that knowledge, we bring the level of design concept, maybe modular housing for these vacant lots, we bring the level of expertise to the table, and then also work with entities like Delores in the Community Economic Development Initiative to create funds for Opportunity Zones, then we can revitalize entire neighborhoods if there’s no place else like it in the city, and also do it in a way that we can create legacy ownership. There are many expats from Detroit here in Los Angeles, they left the community many years ago. They love to go back, but they don’t know how and what to do. They’re all ready to be a part of an OZ zone investment strategy or a rebuild strategy and we’re very excited about it.

Jimmy: No, that’s fantastic. Well, I wanted to get some final thoughts from each of you before we wind down this episode today. You know, one thing that you just said in your last response, Sherri, was that anecdote of that woman in Detroit who came to you, and she said she needed more help, she needed more tools, she needed more resources. Opportunity Zones can be that tool, they can be that resource to revitalize communities. But there have also been a lot of critics of the program criticizing Opportunity Zones as merely a tax break for the rich, gentrifying communities, driving out current residents in the communities. Turn to both of you right now, I suppose, Sherri, we can start with you first, and then Delores, you can go second. What do you say in response to those critics? How is the Opportunity Zone program doing the good that it was promised to America to do? And what have you seen in your experience with Opportunity Zones that can be a response to those critics?

Sherri: I think that’s what Delores and I are doing, we’re turning the table on that criticism by creating opportunities for local community investors, and that’s all that the community is asking for. You know, it’s amazing how much we’re overlooked in terms of the capacity to be able to build or to invest. We don’t get any marketing material. There’s nobody from any of the bigger funds, you know, calling any of our friends that are accredited investors, do have properties, they sell them all the time. I get a call from people every single month, “Sherri, I’m selling this. What do I do with the money?” If I’m not at the ready, I can’t help them, you know, and they don’t want to put it in a fund that they don’t know about. So, we’re turning the tables on that. We’re saying, we want to work with local developers to create the OZ opportunities, keep money invested from people in the communities, and make sure that they are held and owned by people who look like them, who want to be around them, and who can employ people from the communities, keep the jobs in the communities.

We want to create a fund for business investment. There are lots of opportunities for business investment in our own developments even, and particularly the production studio that we’re creating. We’re gonna create a fund to invest in those production studios themselves so that we can keep those dollars. People buy homes in the community shop, they visit, you know, other families, they walk in the community. That’s what people want. They want a solution to being able to get to the opportunity and for it to be able to benefit them. And that’s what we’re all about and that’s what we plan to do. As long as this opportunity, a concept is available here, you know, from the federal government, we’re gonna be here educating people and making sure that the table has turned.

Jimmy: Tremendous. And Delores, how about you? What do you say in response to any criticisms of the Opportunity Zone initiative? How are you driving impactful social community-oriented impact?

Delores: Well, I think that our major emphasis is demystifying what this looks like. And having the ability, when we’re looking at bringing unlikely people to the table, of being able to create inclusionary environment around a conversation. It’s being able to bridge the mystification of what an investor looks like. When we began our process, when we looked at our Long Beach project, we actually do bus tours, where we engage and we bring people to the table. You wanna invest in this community, come, touch, feel, see it, let the community see you. Let’s begin a dialogue so that we know that we’re in this together, that the end result is that we wanna have true impact and resiliency of the community. And so, if I can look you in your eye and see that you are coming to the table from the place of truth and help, I am committed to being a part of that process. So, it’s, again, aligning relationships, aligning the ability to say that I am a part of the process because my thought process matters. And then we have the ability, I’m gonna champion you, I’m going to be your advocate, I’m going to be your salesperson. I’m going to actually be your defender for you if I know who you are. But, you know, most communities don’t like to know that there’s this mysterious ex-person that has walked into the community, because then you allow for people to make assumptions, you know, of stereotypic thought process of what they think that investor is.

Jimmy: Terrific. Well, Sherri and Delores, it’s been a pleasure speaking with you both today, very insightful talking to both of you. Thanks for joining the show. Before we go, where can our listeners go to learn more about you and your organizations? And Sherri, can go first, where can our listeners go to learn more about you and Urban Design Center?

Sherri: Well, we’re easy to find, we’re at urbandesigncenter.com. You go there, you’ll see our projects, our information. We have other alignments that we create in our community, like our Opportunity Center where we make sure that local people have access to jobs. So you’ll see that as well. But all of our projects and information are on urbandesigncenter.com. You can also find us on LinkedIn, @Sherri Franklin, and also at Urban Design Center on LinkedIn and Facebook, we’re there as well. And then myself, Sherri Franklin on Twitter. So, we try to stay posted in social media, but we are available and all of our contact information is there as well.

Jimmy: Perfect. And Delores, where can our viewers go to learn more about you and your group?

Delores: Thank you. You can go to cedc.usa.com. And you can also look for Delores Brown on LinkedIn.

Jimmy: Perfect. And for our listeners and viewers out there today, I will, of course, have show notes available for today’s episode at opportunitydb.com/podcast, and there we’ll have links to all of the resources that Sherri, Delores, and I discussed on today’s episode. And please be sure to subscribe to us on YouTube or your favorite podcast listing platform to always get the latest episodes from OpportunityDb. Sherri, Delores, again, thank you so much for joining us today. Thank you for your time.

Delores: You’re welcome.

Sherri: Thank you for having us.

Delores: Have a great day. Thank you so much for having us.

Days
Hrs
Mins
Secs

Discover Your Next Opportunity Zone Investment...

OZ Pitch Day

June 13, 2024

Learn More