The Federal Tax Cuts and Jobs Act of 2017 included provisions for a new revitalization tool, the Opportunity Zone and Opportunity Fund. Broadly speaking, the Zones and Funds will allow investors to receive tax benefits on currently unrealized capital gains by investing those gains in qualified census tracts (Opportunity Zones). While the federal government is responsible for defining the investment process, the Governor of each state has until May to nominate 25 percent of qualified census tracts as “Opportunity Zones.”
According to criteria used in the tax code, the CDFI fund has produced information regarding eligible tracts for the Commonwealth of Virginia. There are currently 901 eligible census tracts in Virginia. 212 of those census tracts can be nominated by the Governor to be Opportunity Zones.
Congress issued non-binding guidance on criteria for consideration of Opportunity Zones. Guidance suggests that consideration should be given to census tracts that mutually reinforce state, local, or private economic development initiatives to attract investment and foster startup activity, have demonstrated success in geographically targeted development programs in the past (example: Enterprise Zones) and have recently experienced significant layoffs due to business closures or relocations.
Special consideration will be given to localities and tracts in the Commonwealth that reinforce state or local economic development initiatives. Following guidance from the US Department of Treasury, Virginia Department of Housing and Community Development (DHCD) and Virginia Economic Development Partnership (VEDP) have identified several criteria to assist the Governor in guiding the Opportunity Zone nominations. DHCD is soliciting input from localities and other interested parties.
The identified selection criteria are:
- Tract is a qualified Opportunity Zone tract.
- Tract has identifiable state and/or local incentive programs, such as Enterprise Zones.
- Tract is in a locality with above average or high Fiscal Stress Index ranking.
- Tract contains or is near an economic investment driver such as a research facility, port, university, hospital, and/or a facility designated by VEDP or other state agency as a strategic site.
- Tract has access to a major roadway.
- Tract was identified by the locality as a strategic economic development area. The information furnished by local governments and interested stakeholders will strongly influence the final nominations, but it will likely not be possible to accommodate the priorities identified by every locality.
- Our process will consider proportionality at the regional, sub-regional, and local levels. However, due to the small number of eligible tracts in many localities, it is not possible to be strictly proportional at the locality level.
- For initial mapping purposes, localities should expect no more than ~25% of their eligible census tracts placed in Opportunity Zones.
- Our goal is to have each GO Virginia region have 25% of their eligible tracts placed in Opportunity Zones and we will strive for proportional balance within sub-regions, using regional EDO boundaries and other proxies for sub-regional shared economic interests.
Local Input & Priorities
The Chief Administrative Officers of each locality (Counties, Cities, and Towns) that has an eligible census tract based on CDFI fund information have been notified directly of this nomination process and have received a survey form for making their priorities known.
For a hard copy of the survey questions sent to localities, please click here.
The Department of Housing and Community Development & Virginia Economic Development Partnership encourage additional interested stakeholders to submit their input through the form here: click here.
Please be aware that final selection of Opportunity Zones is subject to approval by the Governor, and final rules developed by the U.S. Treasury. The information furnished by local governments and interested stakeholders will strongly influence the final nominations, but it will likely not be possible to accommodate the priorities identified by every locality.
- Opportunity Zones PowerPoint Presentation
- February 16–March 2
- Locality Input Survey – Survey to chief appointed officials (County Administrators, City Managers and Town Managers) requesting priority ranking of their eligible zones based on existing or planned local tools and efforts at encouraging start up activities and revitalization in specific eligible census tracts. Localities will be asked to identify their eligible tracts that are a priority for designation and any special consideration that should be given to 1 or 2 contiguous tracts. (March 2, 2018 Deadline for input).
- General Input and Investor Input (March 2, 2018 Deadline for input).
- DHCD and VEDP coordinate recommended map and criteria through input from state agencies.
- DHCD and VEDP hold information sessions with General Assembly members.
- February 23-March 9 – DHCD and VEDP compile state and local input and compare it to identified criteria. Final mapping exercises.
- March 9 – FINAL DHCD/VEDP nomination recommendations complete.
- March 20 – Nominations Submitted
Earlier this week, the US Treasury released new information that expanded Virginia’s list of census tracts that are eligible to be nominated for Opportunity Zones. We have updated the map below to reflect these additions . Please check this map to see how it may have affected your community’s eligibility. Note that no tracts were removed from eligibility, so if your entire locality was previously eligible, this new guidance does not affect you.
Please note that all surveys must be submitted by 11:59 pm Friday, March 2, 2018. However, we will accept email updates through Tuesday, March 6, 2018.
If you have not yet submitted your survey, please include any tracts that are not preloaded (city and county surveys), but that you wish to recommend for nomination, in the narrative section.