The Chicago-area developers say they have launched a real estate and energy investment organization targeting Opportunity Zones (OZ) tax incentives created through 2017 tax reform legislation.
The Decennial Group joint venture says it is targeting $1 billion in development projects.
Scott Goodman, founding principal of Farpoint Development, Bob Clark, founder and CEO of Clayco, and Shawn Clark, president of CRG, Clayco’s real estate development and investment company, are behind the initiative.
Decennial’s vertically integrated developer-builder platform is positioned as an early leader in this new marketplace, which is generating interest around the country for its potential to positively transform economically distressed communities, the news release says.
Decennial Group derived its name from its 10-year approach to investment and development, which positions neighborhoods for transformative, long-term, and inclusive growth. The real estate investment and development platform focuses on commercial, industrial, multifamily, and energy projects located in Opportunity Zones, particularly throughout America’s Heartland, the statement said.
The team behind Decennial has unique real estate and energy investment, development and construction, and regulatory expertise. Goodman previously founded Sterling Bay, one of Chicago’s leading real estate investment and development firms that spearheaded the revitalization of the West Side of Chicago. He is the lead developer for Burnham Lakefront, located in a recently designated OZ that encompasses over 100 acres near Chicago’s Convention Center on the South Side.
“Revitalizing neighborhoods and generating strong returns for investors has been at the core of my work for decades, and those same principles are at the heart of the Opportunity Zones program and its incentives,” said Goodman. “Decennial will make smart, long-term investments throughout the country, but we will begin by capitalizing on deep relationships and an already strong pipeline of deals in the Heartland, where we have unparalleled investing experience.”
A vital component and differentiator from other OZ funds is Decennial’s renewable energy strategy. This strategy is led by David Pavlik, co-founder and principal of 11 Million Acres, which has structured over $2 billion in renewable energy and infrastructure projects. “Our capital structure enables us to take advantage of renewable energy financing and tax credits, ensuring our assets are designed for the next generation energy economy,” Pavlik said.
The partnership with Clayco and CRG adds a unique feature to Decennial’s investment and development capabilities, leveraging CRG’s experience in the development of more than 8,000 acres of land and over 187 million square feet of industrial warehouse, corporate headquarters, research and development facilities, and multi-family real estate projects valued at more than $11 billion. CRG has offices in Chicago, St. Louis, Columbus, Philadelphia, Atlanta, and Newport Beach.
“Few Opportunity Zone investment platforms have the ability to manage all aspects of the investment and development life cycle from deploying private equity capital to underwriting strong deals to developing and managing the projects in these communities,” Clark said in the statement.
“CRG provides both development and site selection expertise as well as a full-service design-build group able to act quickly on great OZ opportunities around the country,” he said. “We all have a deep commitment to enhancing and growing communities. Our partnership with the Decennial Group is a perfect opportunity to create jobs and deliver a great product.”
Steve Glickman, Founder and CEO of Develop LLC in Washington, DC, will serve as senior advisor to the management team. Glickman is also the co-founder and former CEO of the Economic Innovation Group, the architect of the Opportunity Zones program. Glickman’s expertise structuring OZ funds and transactions, as well as his relationships in the OZ marketplace, provide Decennial an important advantage in navigating the complicated rules and regulations to maximize the program’s tax incentives.
“Decennial is executing exactly the type of place-based impact strategy for long-term value investing envisioned by Congress when it created this bipartisan program, and we have the expertise to make profitable, inclusive investments that will have a transformative positive impact on communities all over the country,” said Glickman.
Decennial’s team also includes Dan Gilman in New York, a private equity veteran who heads investments for Decennial’s funds, as well as John Krappman in Los Angeles, a seasoned real estate investor who heads underwriting and acquisitions.