February 18, 2020
A recent report showed that federal tax incentives, such as the Opportunity Zones program, can be used to develop mixed-use projects that would, in turn, help support life-sciences and business growth. Entitled “Cultivating Chicago’s Innovation Environment,” the report was issued by the Illinois Medical District (IMD), and focused on attracting private capital through the O-zone program and “catalyze mixed-use development.” Much of the 31-acre IMD has been designated as a Qualified Opportunity Zone, and eligible for Qualified Opportunity Funds (QOF) proceeds.
The Kaufman, Hall & Associates market study indicated that the IMD, situated two miles west of Chicago’s loop area, is an ideal location to “support a large and thriving health innovation” district, one that could support both lab space and residential and commercial developments. The report, taking a page from the Brookings Institution, defined an innovation district as a “geographic area where leading-edge anchor institutions and companies cluster and connect with startups, business incubators and accelerators . . .” Such districts also offer plenty of transit, as well as mixed-use amenities. The study noted that the IMD is a good location for a potential life sciences innovation district, due to existing infrastructure and potential opportunity for development of other facilities.
The study also pointed out reasons why Chicago lags behind smaller cities when it comes to life sciences activities. These include a “lack of coherent mission and holistic plan of action across institutions,” along with the lack of an anchor institution that could provide support to development and community engagement.
The report concluded that, while the IMD has the tools necessary to support a “large and thriving health innovation district,” the fragmented market could end up being a problem. However, use of the Opportunity Zone situated within the IMD, could attract private capital, which could lead to a “live-work-learn-play” environment.
Pictured: Illinois Medical District
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