Gov. Mark Dayton recently recommended to the U.S. Department of Treasury 128 low-income census tracts in Minnesota to be designated as Opportunity Zones.
Among them is a parcel of land located in Redwood County.
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,” said Dayton.
"These efforts have been especially important in communities that are experiencing continuing economic disparities,” added 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 Shawntera Hardy, DEED commissioner. “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 Mary Tingerthal, Minnesota housing commissioner.
Under the law, each governor is authorized to designate 25 percent of eligible census tracts as Opportunity Zones in their state. In Minnesota, 509 census tracts are eligible for designation.
The Department of Employment and Economic Development (DEED), together with Minnesota Housing, asked Minnesota’s 87 counties, 11 tribal 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.
According to Briana Mumme, Redwood County EDA coordinator, the county applied for the Opportunity Zones, adding based on the stipulations of the program there were four tracts that were eligible.
The piece that was selected is located west of Redwood Falls adjacent to the regional recycling center.
There were 14 tracts in southwest Minnesota, including the one in Redwood County that were selected. One of the tracts is in Renville County.
DEED is the state’s principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development.
For more about the agency and its services, visit www.mn.gov/deed.