Placement: New Business
Action Requested: Motion / Vote
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Amend the Federal Program to Incorporate Additional Eligible Opportunity Zones
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Submitted By: Kate Parmelee, Deputy City Manager/Chief Innovation Officer
Strategic Plan Link: The City's Goal of a diverse local economy and employment opportunities.
Executive Summary (General Business): The current federal program includes advocacy for an Opportunity Zone at the Walton & One site. In addition to advocate for its designation staff recommends nominating additional census tracts recently made eligible by the U.S. Treasury’s recently released eligibility maps.
Presentation Information: A 10-minute presentation will be provided by staff.
Staff Recommendation: Move that the Council nominate the following Census tracts, in order of priority: City of Port St. Lucie Opportunity Zone Priorities 1. Census Tract 381802 (includes Walton & One redevelopment site) 2. Census Tract 382010 (includes some of the Port District and US 1) 3. Census Tract 382015 (includes areas along Port St. Lucie Bouelvard to the Turnpike).
Alternate Recommendations:
1. Move that the Council amend the recommendation and nominate the following Census tracts, in order of priority: City of Port St. Lucie Opportunity Zone Priorities 1. Census Tract 381802 (includes Walton & One redevelopment site) 2. Census Tract 382010 (includes some of the Port District and US 1) 3. Census Tract 382015 (includes areas along Port St. Lucie Bouelvard to the Turnpike)
2. Move that the Council provide direction.
Background: According to the U.S. Treasury and Florida Department of Commerce, Opportunity Zones are economically distressed communities, defined by individual census tract, nominated by America’s Governors, and certified by the U.S. Secretary of the Treasury via their delegation of authority to the Internal Revenue Service. Under certain conditions, new investments in Opportunity Zones may be eligible for preferential tax incentives. The program is designed to encourage investors, businesses, developers, financial institutions, and other investors to reinvest capital gains into distressed census tracts to foster job creation. The benefit is deferral, reduction, and potential elimination of taxes on capital gains and not rebates or grants. The initial designation of Opportunity Zone census tracts and related tax benefits is known as “OZ 1.0” from the 2017 Tax Cuts and Jobs Act. The new, permanent Opportunity Zones tax incentive program is known as “OZ 2.0” providing more certainty for communities and investors. Opportunity Zones were created by the Tax Credit and Jobs Act of 2017 (OZ-1.0). The One Big Beautiful Bill of 2025 made the program a permanent part of the tax code and further refined the program (OZ-2.0). OZ-2.0 - (Starting January 1, 2027) New zones will be nominated by Governors starting July 1, 2026, and qualified by the U.S. Treasury by December 31, 2026, to take effect on January 1, 2027. Hereafter, Zones will be nominated and designated every 10 years. More restrictive eligibility criteria will be applied to qualify new census tracts, including a lower median family income threshold of less than 70% and elimination of contiguous tracts. OZ-2.0 established additional reporting for OZ funds and businesses, and a two- year overlap period (2027-2028) when both OZ-1.0 and OZ-2.0 maps will be in effect. The goal of the new legislation is to broaden investments to include more operating businesses and rural areas. Currently, Port St. Lucie is home to an opportunity zone near the Walton & One mixed use redevelopment project that is primarily residential and has been not utilized to date, located in Census tract 12111382009. The City of Port St. Lucie’s adopted Federal Program includes support for a new or Expanded Opportunity Zone that incorporates Walton & One, to provide further support to the economic development and redevelopment planned for the site. The City has been actively advocating for this designation with the Governor’s Office and U.S. Department of Housing and Urban Development. This month, the City will complete an application nominating different tracts as requested by the Florida Department of Commerce, which will be considered by the Governor. Recently the U.S. Treasury Department released updated maps based on the narrowed criteria. While the census tract that included the Walton & One site was eligible previously, it does not meet the current criteria outlined by the U.S. Treasury. However, the Florida Department of Commerce has advised that the Governor may nominate tracts outside of the criteria with justification, and the City team continues to advocate for the census tract that includes the Walton & One site as either a tract for Opportunity Zone 2.0 or to amend the Opportunity 1.0 designation for inclusion of the census tract. Two additional census tracts were also made eligible for Opportunity Zone 2.0, and City staff recommend also nominating the two tracts as they support areas that could benefit from economic development and also may advance other City priorities, including the continued growth of the Port District.
Issues/Analysis: N/A
Financial Information: N/A
Special Consideration: The Florida Department of Commerce is collecting recommendations from communities via a survey tool due May 1.
Location of Project: N/A
Business Impact Statement: N/A
Attachments: 1. Opportunity Zone Presentation
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: N/A
Legal Sufficiency Review:
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