Consultants urge Klamath County to map eligible tracts for OZ 2 nominations
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Summary
Consultants from Healthy Sustainable Communities briefed the Klamath County Board of Commissioners on Opportunity Zones 2.0, advising the county to inventory 12 eligible census tracts, coordinate nominations with Business Oregon and municipal partners, and plan projects that show a pathway to development.
John Langarza of Healthy Sustainable Communities and partner Andre Labarza told the Klamath County Board of Commissioners on Feb. 24 that the new Opportunity Zones program (OZ 2) changes how rural counties can compete for federal tax-incentive designations.
Langarza said OZ 2 introduces a nomination process every 10 years and stronger reporting requirements, and that Klamath County has about 12 census tracts that could be eligible. "Only about 25% of eligible tracts will be selected," he said, urging the county to prioritize tracts with buildable land and clear project opportunities.
The presenters emphasized that OZ 2 aims to drive investment into rural tracts and lowers the "substantial improvement" threshold for rural-qualified opportunity funds to 50 percent, reducing the barrier for rehabilitation projects. "If you rolled over capital gains into a qualified opportunity fund and held it 10 years, the gains can be tax-free," Labarza said, explaining the program mechanics.
Commissioners pressed staff on the nomination timeline and its relationship to Business Oregon. Labarza said Business Oregon will publish an application process and that counties will submit nominations that Business Oregon helps triage before the governor makes final recommendations to the U.S. Treasury. He encouraged the county to coordinate with municipal partners and to assemble potential project packages, such as industrial or aviation sites, that could make a nomination more competitive.
Why it matters: OZ 2 is one of the largest federal economic development tools available; county nominations that are well packaged with other incentives (enterprise zones, urban renewal, parcels with development-ready infrastructure) may be more likely to attract patient capital and long-term investment.
The presenters offered to share slides and third‑party maps and said Business Oregon’s webinar series and a forthcoming application will provide additional guidance. Commissioners asked staff to continue coordinating with the county RDO and local partners to develop nominations and a list of priority projects.
Next steps: Staff and the county’s economic-development partners will follow up with Business Oregon guidance, map eligible tracts, and return to the board with a recommended nomination approach.
