After pulling together financing from a variety of sources, a Lancaster developer broke ground yesterday on a $15 million apartment project at the southern end of the city.

· The building, slated to rise at 800 S. Queen St., addresses what local officials see as a critical need: housing that is affordable for people who live and work in Lancaster.

· But it also marks one of the largest projects in the region to take advantage of a Trump-era tax incentive called Opportunity Zones.

What's the project:  A 52-unit apartment building conceived by Lancaster-based OZFund Inc., a firm led by entrepreneur Jeremy Feakins.

· The apartments will include studios, one-bedrooms and two-bedrooms affordable to people making less than 80% of the area median income. Affordable is typically defined as costing no more than 30% of income.

· The building also will include a roughly 7,000 square-foot grocery/convenience store with a focus on fresh and healthy items, said Feakins.

· In addition, it will feature a “green roof” -- essentially a rooftop garden for the use of residents -- that will help absorb rainwater.

· Construction is slated to wrap up in fall 2024, according to Paula Vitz, government affairs director at OZFund.

· The site itself was formerly home to a store called Rebmans, a name being revived for the apartment building (pictured below).

· The designer is York-based architecture firm Warehaus. The construction contractor is Wormleysburg-based Steel Works Construction.

· Chambersburg-based F&M Trust extended a senior construction loan of about $7.5 million.

· State programs also contributed.

· OZFund was awarded a $1 million grant from the Redevelopment Assistance Capital Fund, for example, and about $1.1 million from grant programs operated by the Pennsylvania Housing Finance Agency.

· The Pennsylvania Infrastructure Investment Authority, or PennVest, floated a low-interest, $1.8 million loan to help cover the costs of stormwater remediation and the green roof.

· Other money comes in the form of equity investments from OZFund, a qualified investment fund under the Opportunity Zone program.

How does that work: Investors who direct money into Opportunity Zones can defer or reduce taxes on capital gains for a set period of time.

· But they generally must invest through qualified funds like OZFund.

· There are more than 8,700 Opportunity Zones around the country, including 300 in Pennsylvania.

· The zones are mostly in urban and rural areas with low-income populations and few prospects for outside investment.

Are they making a difference: It depends on who you ask.

· When the program was rolled out in 2018, critics argued it was just a tax break for wealthy investors and that money would flow to projects that would have happened anyway.

· Five years later, research is painting a more complex picture.

· Studies have found that nearly half of the country’s opportunity zones have attracted investment, with most of it going to residential development.

· Whether the investments are benefiting communities that need help remains something of an open question.

· The program is “moving tens of billions of dollars into thousands of low-income and high-poverty communities and generating significant economic effects,” the Economic Innovation Group, a bipartisan public policy group, wrote in an overview of recent research. “But we know too little about the size and diversity of OZ investment activity in the targeted neighborhoods themselves, and we in the research community are not armed with the data necessary to closely examine the extent to which the policy will improve the welfare of local residents over time.”

· Federal lawmakers have proposed legislation that would increase transparency for the program while safeguarding taxpayer info, among other tweaks.

What's next: OZFund is considering additional projects in Columbia and in Hagerstown, Maryland.

· "Our business model is to design and build affordable rental properties for America's working families," Feakins said at yesterday's groundbreaking, which was attended by city, county and state officials. "Today marks a significant milestone in our commitment to uplifting neighborhoods and improving the lives of our working families."