A New Opportunity Zone Platform: Blueprint Local
Over a year ago, the government recently passed a law to incentivize private capital to invest in deeply distressed census tracts across the country. In response, Access Venture has piloted direct investments in local businesses, placed strategic capital in anchor community real estate, and backed national growing companies that they think have the potential to strengthen communities across America. Learn more about what they’re doing below!
We are excited to announce today the official launch of Blueprint Local, a platform built help entrepreneurs access capital in their own communities.
At Access Ventures, we have been pioneering “one-pocket investing” in communities for the last five years. For the past six months, we’ve been testing the water on interest, direction and potential partnerships working up to this announcement, and are excited to finally share in more detail the journey as a founding member of the collaboration that is launching this new platform.
An Opportunity to Rebuild Communities
A little over a year ago now, the Federal Government passed and signed into law, the Investing in Opportunities Act (IIOA), more commonly referred to as Opportunity Zones. This was designed to incentivize private capital to invest in deeply distressed census tracts across the country.
Around that time, a group of us, including Ross Baird, the founder of Village Capital, began to discuss this new potential and ways to deploy it in communities in ways that builds wealth in communities, without being extractive. We saw a small window in time to build a strategy that could help set a narrative for the country.
In the past, early movers have mattered. We’ve seen some disappointment in past federal programs such as New Market Tax Credits – well-intentioned and in some cases used appropriately, but at the end of the day, a bill was meant to invest in operating companies that lead to jobs and wealth creation, devolved into another real estate investment opportunity for investors not from those communities.
In order to do something different, in the summer of 2018, we announced our plan to explore the development of such a strategy and teamed up with Ross Baird to lead the way to build on work that we have done in communities such as Louisville, Tulsa, and Columbus, and explore opportunities in many more. We’ve piloted direct investments in local businesses, placed strategic capital in anchor community real estate, and backed national growing companies that we think have the potential to strengthen communities across America.
Over the past nine years, through his leadership at Village Capital, Ross has demonstrated proficiency in finding and investing in some of the best entrepreneurs solving real problems across the country in sectors that have a direct impact on economic opportunity and environmental sustainability in communities across the country. Ross is one of the most experienced startup investors in economically distressed areas in America, and has spent nearly a decade helping build the ecosystems that help entrepreneurs succeed.
We then got to work! Ross began to have conversations across the country with like-minded investors, philanthropic organizations, and metro governments to better understand the direction and potential for this plan as we awaited final regs from the IRS. We learned a lot in that process, chief of which was the need for a robust and experienced team to accomplish this effort. Which is why we are excited that collaborating partners such as Brown Advisory, Village Capital, and Admiral Capital Group have joined in the effort to establish such a strategy.
Communities are complex organisms that need every type of capital strategically and intentionally coordinated.
We also learned while investors are attracted to the return potential of these platforms, they are extremely excited to see these returns through partnerships that directly impact their local communities. As such, we shifted our planning to focus on a series of community-based strategies instead of a national fund in some key regions.
We learned as well that a critical component to the success of these platforms is coordinated and aligned capital. Even though Opportunity Funds invest only equity, communities need social services supported through grant programs and creative permanent finance to stabilize businesses and families. Communities are complex organisms that need every type of capital strategically and intentionally coordinated. The communities that are taking these steps, are leading the conversation nationally and will, over the life of this program, see the greatest investment and most promising results.
And finally, we learned that at the end of the day, investor relations is crucial. Having a great reputation and demonstrated an ability to achieve results is paramount to the success of even creating an Opportunity Zone platform. We know that many Americans don’t trust Wall Street, and in many cases rightly so. And we also know that we had to have the best and most thoughtful thinking from the asset management world to successfully implement Blueprint Local. In exploring the asset management world Brown Advisory stood out in values alignment, its thoughtful approach, and its alignment with both mission and financial success. Brown Advisory has really stepped up to really lead the way with the creation of Blueprint Local’s platform as a joint venture. We believe this collaboration will grow into a dynamite team and strategy with their leadership and experience.
As a part of this new partnership, we are excited to announce a blueprint platform in Texas. Joining this effort in Texas will be Admiral Capital Group, founded by NBA Hall-of-Famer David Robinson as well as Seavest Investment Group’s ReThink Community. This platform will concentrate its partnerships across Texas in areas that help foster economic growth, are inclusive and seek to address specific regional and community challenges.
This platform will employ a differentiated, holistic approach to improving community health through partnerships in the following:
1. Operating businesses: “Startup” capital for businesses positively impacting local economies and “growth” capital for established businesses seeking to create a meaningful presence in existing or new communities.
2. Real estate: Transformative partnerships in commercial infrastructure, as well as potential participation in housing strategies that support workforce development.
The platform will seek to partner with entrepreneurs for both attractive financial returns and meaningful, tangible impact. In addition to portfolio targets achieving market-oriented financial metrics, sustainable social criteria also must exist, including:
1. Increased community dynamism.
2. Diversity of the portfolio, both demographic and socioeconomic.
3. Local health indicators, such as physical (e.g., diabetes prevalence, hospital readmits), financial (debt, household wealth created), education and workforce (unemployment rate), and other factors
We have a once-in-a-generation opportunity to write the story of what it means to be a “one-pocket investor” in our communities. We are excited that Blueprint will be the next chapter of the story.