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EDA recommends city apply for Opportunity Zone designation, prioritizes downtown tract
Summary
Forest Lake EDA voted to recommend the city apply to the state to be considered for federal Opportunity Zone designation and ranked the census tract containing downtown (ending in 103) as the first priority, citing existing redevelopment activity and partnership strength.
The Forest Lake Economic Development Authority voted to recommend that the city apply to the state for potential Opportunity Zone designation and asked the city council to rank the downtown tract (census tract ending in 103) as the cityfirst priority.
Staff explained the federal Opportunity Zone program (established in the 2017 tax law) creates tax incentives for investors to channel unrealized capital gains into designated low-income census tracts, with the intent of spurring private real-estate and business investment. Abby (staff) told commissioners Forest Lake has two eligible Washington County census tracts and staff recommended prioritizing the tract that contains downtown, Broadway Avenue and 12th Avenue because redevelopment activity is already underway there and staff believes that makes the application stronger.
Commissioners discussed the mechanics and trade-offs. Staff emphasized there is no direct cost to the city for the designation but that preparing an application and coordinating with local financial institutions will take some staff time. One commissioner noted a common criticism of Opportunity Zones: while the program can attract investment to lower-income areas, it can also accelerate development that displaces existing residents if not managed carefully. Staff said they'd work with planning and council to mitigate negative impacts if the designation is secured.
The EDA moved, amended and approved a recommendation to the city council to pursue the Opportunity Zone application and to submit census tract 103 as the highest priority and the other eligible tract as second priority. The motion passed with recorded discussion; the transcript does not include a roll-call vote tally.
What happens next: staff will meet with council-designated representatives, local business and financial partners over the coming month to gather commitment from one or more financial institutions and will forward the EDA recommendation to the city council and Washington County as part of the application process (state submission deadlines and timelines were discussed).
