MN Opportunity Zones Submitted to US Treasury
Wednesday, May 02, 2018
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. In April, Governor Mark Dayton recommended 128 low-income census tracts in Minnesota to the U.S. Department of Treasury for inclusion in the program. Sixteen of these tracts are located within the APEX Region. “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, Department of Employment and Economic Development (DEED) Commissioner. “This program could lead to new strategies to bridge public-private partnerships.”
Opportunity Zones may be attractive for investments in workforce housing, which is in short supply in many communities within the APEX Region. As Neel Kashkari, President and CEO of the Federal Reserve Bank of Minneapolis, indicated at the Regional Economic Indicators Forum in April, one of the most critical elements of economic growth in the future will depend on the availability of adequate housing – including affordable, market rate, multi-family, and single-family options. DEED, together with Minnesota Housing, asked Minnesota’s 87 counties, eleven tribal nations, and first-class cities, to prioritize and rank eligible census tracts for recommendation. Tamara Lowney and Ian Vincent, APEX Senior Business Developers, played a part in providing recommendations to DEED by providing letters of support to various communities as requested. APEX is confident that this could be a great new program for economic and business development in our region.
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 set up as either a partnership or corporation for investing in eligible property located in an Opportunity Zone. The investor’s gains from a prior investment are used for funding the Opportunity Fund.
APEX will keep investor-members apprised of the status and outcome of the Opportunity Zone application process. In the meantime, please contact Tamara at 218-740-3667 if you have any questions.