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Construction of a 25-story tower in Portland’s West End is due to begin in early 2020 after the development team received a substantial investment from a Chicago-based group.

Cresset Partners and the Goodman family will be equal partners in a large-scale opportunity zone fund to kick off Eleven West. The mixed-use building planned at Southwest 11th Avenue and Washington Street will hold 222 multifamily units, 116,000 square feet of office space and 7,900 square feet of retail space.

The building will be a sister structure to Twelve | West, which was completed in 2009 and fetched $206 million when it was sold to Greystar Real Estate Partners in July 2018. Both projects were designed by ZGF Architects, with Gerding Edlen serving as developer.

Eleven West was approved by the Portland Design Commission in October 2017, but construction was delayed while the Goodmans sought financing.

The Goodmans hired Newmark Knight Frank in San Francisco to attract an opportunity zone partner. The firm found Cresset.

Critics say opportunity zones haven’t met their intended purpose of sparking investment in impoverished areas. Instead, across the nation, opportunity zone funds have presented investment opportunities in areas much like Portland’s West End 鈥� one of the hottest and most expensive real estate submarkets in Oregon.

Greg Goodman, president of Downtown Development Group, said if not for opportunity zones, Eleven West would have been the receiving end of a 1031 exchange 鈥� a tax treatment that allows investors to defer paying capital gains on real estate sales. Instead, state, county and city governments will receive taxes from the Eleven West project, he said.

鈥淭he state will get a big tax check they wouldn’t have otherwise gotten,鈥� Goodman said.

Opportunity zone rules also encourage investors to hold onto properties for longer terms to fully realize tax advantages.

鈥淚t allows investors to take a longer-term approach and not be worried about building into an overbuilt market,鈥� Goodman said.

Another opportunity zone fund is being used to attract investors to the 35-story Block 216 project in downtown Portland. That fund is managed by Baker Tilly Capital of Philadelphia.

Also, Sturgeon Development Partners聽is using an opportunity zone fund for a hotel project in Salem and possible future development projects.

Construction of Eleven West is slated to begin in late January, with Turner Construction serving as general contractor, Goodman said.