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Zoning and the Commercial Landscape

EDOs play a significant role in zoning regulations, advocating for policies that support economic growth and community development. An effective EDO will streamline zoning processes to attract the right businesses in the right area, often called economic development districts. These districts target specific industries and often include tax incentives to attract the right business and residential development mix. 

In this section, we will discuss two significant zones that are shaping the commercial landscape. The first is an established opportunity zone, and the second is the recently announced Tech Hubs by the Department of Commerce. These Tech Hubs designations have gained considerable attention because they come with the opportunity to receive grants in the range of $40-70M out of a total of $500M budgeted from the Department of Commerce. This injection of resources will help attract technology companies to become established and grow in these markets. 

Opportunity Zones

Opportunity Zones offer investors a chance to defer and reduce taxes on capital gains. The investor can avoid all capital gains taxes if the investment is held for ten years. This tax benefit has led to increased interest in real estate development and has assisted in revitalizing communities in opportunity zones.

With the added tax benefit, opportunity zones often see a rise in real estate development and commercial projects. Investors will leverage the advantage of the tax incentive to overcome the risk of investing in these areas that typically carry higher vacancy rates due to economic challenges. 

Opportunities Zones can lead to an increase in property values, which may benefit property owners. However, this may also lead to concerns about gentrification and displacing current residents if community stakeholders are not adequately engaged. 

The Opportunity Zone incentives aim to stimulate economic growth in underserved communities, create job opportunities, and improve the quality of life for all residents. Commercial real estate developments often bring new jobs, which increases the tax base. 

This increase in the tax base can lead to infrastructure improvements, better neighborhood amenities, and an overall increase in the quality of life for everyone in the community. 

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Additional Resources

Qualified Opportunity Zones

The QOZ program was created in 2017 to encourage economic growth in underserved communities through tax incentives for investors.

Zoning

Zoning laws affect land use, lot size, building heights, density, and more.

Tech Hubs

Tech Hubs historically have had a positive impact on commercial real estate markets. The presence of new tech companies also spurs property development 
and redevelopment, creating a cluster effect that boosts demand for commercial real estate. Co-working spaces are in high demand near designated tech hubs. The influx of tech workers helps drive demand for nearby housing, amenities, and retail services, increasing property values and rents in the residential and retail sectors. 

In October of 2023, President Biden and Secretary of Commerce Gina Raimondo announced the designation of 31 communities across the country as Regional Innovation and Technology Hubs through the Department of Commerce Economic Development Administration. 

These 31 Tech Hubs focus on developing and growing innovative industries in regions across the country:

Enabling Safe and Effective Autonomous Systems

  • Tulsa Hub for Equitable & Trustworthy Autonomy (THETA) (OK), led by Tulsa Innovation Labs, aims to become a global leader in developing and commercializing autonomous systems for use cases ranging from agriculture and pipeline inspections to regional transportation.
  • Ocean Tech Hub (RI, MA), led by the Rhode Island Commerce Corporation, aims to develop, test, and commercialize emerging maritime artificial intelligence and machine learning-enabled robotics and sensors.
  • Headwaters Hub (MT), led by Accelerate Montana, aims to become a global leader in smart technologies for automating complex processes, such as industrial manufacturing.

Maintaining Our Quantum Edge

  • Elevate Quantum Colorado (CO), led by Elevate Quantum, aims to  solidify the region’s global leadership in quantum information  technology (QIT) to increase infrastructure resilience and strengthen  the quantum hardware supply chain.
  • The Bloch Tech Hub (IL, IN, WI), led by the Chicago Quantum Exchange (CQE), aims to lead quantum computing, communications, and related solutions.

Biotechnology in Drugs and Medical Devices

  • Advanced Pharmaceutical Manufacturing Tech Hub (VA), led by the Commonwealth Center for Advanced Manufacturing, aims to accelerate the growth, innovation, and sustainability of the U.S.-based Advanced Pharmaceutical Manufacturing industry to re-shore safe and affordable medicines via innovative hybrid and continuous flow manufacturing technologies. 
  • ReGen Valley Tech Hub (NH), led by the Advanced Regenerative Manufacturing Institute (ARMI), aims to make New Hampshire a global leader in biofabrication to produce cost-effective regenerative therapies that address chronic disease and organ failure.
  • iFAB Tech Hub (IL), led by the University of Illinois Urbana-Champaign, aim to scale precision fermentation to convert underutilized corn feedstocks into high-value, customized alternative proteins, food ingredients, materials, chemicals, and more.
  • Kansas City Inclusive Biologics and Biomanufacturing Tech Hub (MO, KS), led by BioNexus KC, aims to position eastern Kansas and western Missouri as a global leader in biologics and biomanufacturing, increasing domestic production of life-saving vaccines and other preventative technologies.
  • Heartland BioWorks (IN), led by the Applied Research Institute, aims to develop central Indiana into a global leader in biotechnology and biomanufacturing by increasing the region’s capacity to make and deploy lifesaving medicines.
  • PRBio Tech Hub (PR), led by the Puerto Rico Science, Technology and Research Trust, aims to advance the region as a global leader in biotechnology through fast-tracking the discovery, development, manufacturing, and supply of next generation biotechnology and medical device products to detect, treat, and cure diseases and ailments.

Biotechnology Precision and Prediction

  • Wisconsin Biohealth Tech Hub (WI), led by BioForward Wisconsin, aims to position Wisconsin as a global leader in personalized medicine, an emerging healthcare approach that tailors tests, treatments, and therapies informed by a patient’s unique genetic code, medical record, and environment.
  • Baltimore Tech Hub (MD), led by the Greater Baltimore Committee, aims to develop innovative predictive healthcare technologies by applying artificial intelligence to biotechnologies.
  • Birmingham Biotechnology Hub (AL), led by Southern Research Institute, aims to become a global leader in drug, vaccine, and diagnostics development by applying artificial intelligence-driven biotechnology to increase representation in clinical genomic data and clinical trials.
  • Greater Philadelphia Region Precision Medicine Tech Hub (PA, DE, MD, NJ), led by the Ben Franklin Technology Partners of Southeastern PA, aims to become a global leader in end-to-end precision medicine.
  • Minnesota MedTech Hub 3.0 (MMT3.0) (MN, WI), led by the Minneapolis Saint Paul Economic Development Partnership, aims to position Minnesota as a global center for “Smart MedTech” by integrating artificial intelligence, machine learning, and data science into medical technology.

Clean Energy

  • Gulf Louisiana Offshore Wind Propeller (LA), led by Louisiana State University, aims to transition Louisiana’s energy economy from its legacy of oil and gas to offshore wind and renewable energy.
  • Intermountain-West Nuclear Energy Tech Hub (ID, WY), led by the Idaho Advanced Energy Consortium, aims to position Idaho and Wyoming as a global leader in small modular reactors (SMR) and advanced nuclear energy to contribute to a clean energy future.
  • SC Nexus for Advanced Resilient Energy (SC, GA) led by the South Carolina Department of Commerce, aims to be a global leader in advanced energy by developing, testing, and deploying exportable electricity technologies.
  • South Florida Climate Resilience Tech Hub (FL), led by the Miami Dade County Innovation and Economic Development Office, aims to advance its global leadership in Sustainable and Resilient Infrastructure (SRI) solutions for the global climate crisis.
  • New Energy New York (NENY) Battery Tech Hub (NY), led by the State University of New York (SUNY) Binghamton, aims to bolster battery technology development and manufacturing across the entire value chain.

Critical Minerals Supply Chain

Semiconductor Manufacturing

  • Texoma Semiconductor Tech Hub (TX, OK), led by Southern Methodist University, aims to unify existing and planned semiconductor supply chain infrastructure by enhancing regional collaboration and uplifting underserved communities through workforce expansion.
  • Corvallis Microfluidics Tech Hub (OR), led by Oregon State University, aims to establish global leadership in the development, scaling, and commercialization of microfluidics technology for use in semiconductors and electronic cooling.
  • NY SMART I-Corridor Tech Hub (NY), led by CenterState Corporation for Economic Opportunity, aims to enhance regional semiconductor manufacturing capabilities while ensuring economic opportunity for underserved communities.
  • Advancing Gallium Nitride (GaN) Tech Hub (VT), led by the University of Vermont, aims to innovate in GaN manufacturing, a critical material technology for wireless communication.

Materials Manufacturing

  • Sustainable Polymers Tech Hub (OH), led by the Greater Akron Chamber, aims to tackle the severe climate and environmental impacts resulting from the use of fossil fuel-derived polymers (rubbers and plastics) through accelerating sustainable polymer manufacturing and commercialization in the United States.
  • Forest Bioproducts Advanced Manufacturing Tech Hub (ME), led by the Maine Technology Institute, aims to become a global leader in forest-based biomaterial production and manufacturing by innovating the process of extracting biological building blocks to manufacture environmentally sustainable products.
  • American Aerospace Materials Manufacturing Tech Hub (WA, ID), led by Gonzaga University, aims to develop new domestic supply chains to meet the immediate demand for high-rate production of advanced composite aerostructures in defense and commercial markets.
  • Pacific Northwest Mass Timber Tech Hub (OR, WA), led by Oregon State University, aims to be a global leader in mass timber design and manufacturing to lower the construction industry’s carbon footprint and improve housing affordability.