ST. PAUL – Gov. Mark Dayton has recommended to the U.S. Department of Treasury 128 low-income census tracts in Minnesota to be designated as Opportunity Zones.
Opportunity Zones are a new economic and community development program established by Congress in the Tax Cut and Jobs Act of 2017 to encourage long-term economic development and housing investments in low-income communities nationwide.
“Expanding access to good jobs and better opportunities has been a top priority for my Administration. These efforts have been especially important in communities that are experiencing continuing economic disparities,” said Governor Dayton. “The Opportunity Zones program provides Minnesota a great opportunity to work with local community leaders and our federal partners to build upon that important work and improve people’s lives.”
“Opportunity Zones have the potential to bring much needed investment to some of Minnesota’s lowest-income areas to spur economic development,” said DEED Commissioner Shawntera Hardy. “This program could lead to new strategies to bridge public-private partnerships.”
“We believe that some Opportunity Zones may be attractive for investments in workforce housing, which is in short supply in many communities around the state,” said Minnesota Housing Commissioner Mary Tingerthal.
Under the law, each Governor is authorized to designate 25% of eligible census tracts as Opportunity Zones in their state. In Minnesota, 509 census tracts are eligible for designation. See map at https://mn.gov/deed/business/financing-business/tax-credits/opp-zones/opp-zone-tracts.jsp.
The Department of Employment and Economic Development (DEED), together with Minnesota Housing, asked Minnesota’s 87 counties, 11tribal nations, and first-class cities, to prioritize and rank eligible census tracts for recommendation. The state does not have a role in Opportunity Zones beyond this initial step.
Once approved by the U.S. Department of Treasury, projects in Opportunity Zones will be eligible for funding through Opportunity Funds. Opportunity Funds are an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in an Opportunity Zone and that utilizes the investor’s gains from a prior investment for funding the Opportunity Fund. Guidance for opportunity funds are being developed by the Treasury Department and the Internal Revenue Service and should be available later this year.
DEED is the state’s principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website or follow us on Twitter.