🔒Research Bureau: Local leadership needed to maximize Opportunity Zone benefits
3 Eaton Place in Worcester, the last undeveloped parcel of the CitySquare project, is part of a federal Opportunity Zone. PHOTO COURTESY OF KELLEHER & SADOWSKY
State and local leaders must help identify strong candidates for Opportunity Zone redevelopment, in order for Central Massachusetts to take advantage of the federal program.
State and local leaders must help identify strong candidates for Opportunity Zone redevelopment, in order for Central Massachusetts to take advantage of the federal program designed to help economically distressed communities, the Worcester Regional Research Bureau said in a report released Thursday.Potential Opportunity Zones in Central Massachusetts. MAP COURTESY OF WORCESTER REGIONAL RESEARCH BUREAUCentral Massachusetts is home to 49 census tracts in 12 communities deemed eligible for Opportunity Zones, including Downtown Worcester. WRRB has designed an interactive map to showcase the opportunities to potential investors in those communities.Implemented as part of the Tax Cuts and Jobs Act of 2017, federal opportunities zones are an effort to spur economic growth in high-poverty, low-income communities. Developers who reinvest unrealized capital gains into high-impact, long-term projects in Opportunity Zones can defer taxes on capital gains, receive a basis step-up of previously earned capital gains invested, or get a permanent exclusion of taxable income on new gains.Real estate activity in Worcester’s zones since Opportunity Zones were first introduced in 2017 includes the $16.5-million purchase and ongoing $12-million renovation of the Glass Tower at 446 Main St. by Boston-based Synergy Investments, and the July purchase of one of the most prominent undeveloped properties in Worcester’s zone for $4.2 million by Ohio-based Industrial Commercial Properties. ICP has yet to announce its intentions for that site. Elsewhere in Central Massachusetts, a former Marlborough bank was converted into a pizza and ice cream restaurant in 2025 with the help of zone-related tax incentives. Of the 49 eligible census tracts, 26 of them are located in the city of Worcester, according to WRRB’s map. Fitchburg has six eligible tracts, while Gardner has four.Those zones expire at the end of 2028, with Gov. Maura Healey tasked with nominating 103 eligible census tracts from a pool of about 410 eligible tracts across the state by the end of September. These tracts will be in effect from January 2027 through the end of 2036.To qualify as a zone under new and stricter criteria set by the 2025 One Big Beautiful Bill Act, a census tract must have an individual poverty rate of at least 20% and median income below 125% of area median income, or a median family income no higher than 70% of the area median. The release of the interactive map was paired with a brief from WRRB outlining the history of Opportunity Zones in Worcester County since 2017 and examining their effectiveness. The brief from WRRB concluded limited data makes evaluating the economic effectiveness of zones difficult but suggests incentives may flow disproportionately toward housing projects in a select number of large metropolitan areas already experiencing measurable economic growth. “Still, an OZ designation could provide useful incentives for investors, developers, and municipal leaders considering future projects,” WRRB’s report said.WRRB found zones have the potential to attract private capital, but there is less evidence zones lead to broader economic growth felt by local residents. WRRB’s report followed its 2019 study of Worcester’s zones. Healey has created a webpage outlining the state’s process and encouraging developers and municipal officials to offer feedback. Eric Casey is the managing editor at Worcester Business Journal, who primarily covers the real estate and banking & finance industries.
